News Column

Proposed twin home development seeks tax increment financing

February 18, 2014

By ELISA SAND, American News, Aberdeen, S.D.

Feb. 18--If a tax increment financing request isn't approved for a proposed twin home development, construction on that lot will likely not occur at this time.

The Aberdeen Planning Commission will hear a TIF request today at 8 a.m. for a proposed housing development in the Ashwood Heights Subdivision west of Moccasin Creek.

A TIF gives developers the ability to borrow ahead on anticipated increases in property taxes that will be generated by development of the property. Often the financing is used for the development of roads, curb and gutter. Bonds are paid back in 20 years or less.

According to the TIF proposal submitted to the city, D&H Development Corporation plans to develop a 6.5-acre parcel of land. A portion of the property is considered part of the 100-year flood plain and part of the property is in the floodway. Developers received FEMA approval to place fill on the property and removed some from the floodplain for housing. Lonnie Anderson, secretary/treasurer for D&H, said additional fill is needed because the elevation of this particular lot is substantially lower.

"Any house or twin home would have to be as high as any house already there," said Anderson, explaining that a TIF is the only feasible way to develop the lot because of the extra work that's needed.

Anderson said the TIF is also one of two major hurdles needed to allow the project to move forward. The next hurdle, he said, is getting favorable bids on the project.

The proposed development will include 10 duplexes and an extension of Birchwood Circle. The TIF proposal seeks approval to finance $430,000 for on-site and off-site grading, drainage, riprap and street surfacing.

If approved, the request will go before the Aberdeen City Council for approval of a resolution outlining the plan and establishing the boundaries of the TIF district. According to the city finance office, no date has been set for the council hearing.

"Without a TIF, it will stay the way it is," Anderson said.

Anderson said the area included in the TIF will be the final development on property purchased by D&H Development Corp. in 1994.

"It's way more difficult to develop property on the east side (of the creek)," said Anderson, adding that property owned by D&H on the east side will likely not be developed.

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Source: Aberdeen American News (SD)

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