by Gordon Wolf
More steps to follow before it’s finalized
The City of Denison has been working on a seven-unit, single-unit project with Jim Johnson of Healthy Efficient Homes for several months.
On Tuesday, the city council agreed to the commercial terms of a development agreement, allowing the process to move on to a public hearing on an urban renewal amendment and later final approval of the plan.
Johnson’s proposal is to build houses on vacant land on North 16th Street east of Denison Middle School. The property is currently owned by the Bohlmanns.
Following the previous City Council meeting (March 15), at which the development agreement was discussed, City Manager/City Engineer Terry Crawford contacted Dorsey & Whitney bond attorney John Danos, who recommended that the board is reviewing all business terms and repayment of the development incentive made to Johnson from the tax increment financing (TIF).
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Danos will begin the process of a public hearing for an amendment to the urban renewal plan which will be taken up by the city council on April 19.
Crawford said a new issue that has arisen is sanitary sewer connection fees for lots. He said it was something he and Johnson didn’t know until Blaine Bohlmann spoke about it recently. Crawford said Denison Municipal Utilities (DMU) installed the sewer line to the lots using its own funds and set a connection fee to recoup those costs.
Crawford said information received Tuesday from DMU’s general manager, Rory Weis, indicated the connection fee was about $18,250 per acre. He explained that each of the seven lots is about two-tenths of an acre, so the connection fee will range from $3,908 on Lot 1 to $4,200 on another lot. The total amount of the seven connection fees would be $28,190.
Crawford said he plans to speak with DMU to see if the utilities can fund some of the connection fees through its economic development program.
He added that if DMU could fund some but not all of the connection fees, he raised the idea that the city could use some of its American Rescue Plan Act funds to make up any shortfalls that may subsist.
Councilor Greg Miller pointed out that a benefit to DMU participating in the cost is that utilities will receive revenue from the housing development for electricity, water and sewage.
Crawford detailed the proposed construction schedule and repayment of the $25,000 TIF incentive for each of the seven single-family homes. The list below assumes that the project will begin this year.
2022: First house built and occupied
2023: Houses n°2 and 3 built and occupied
2024: Houses n°4 and 5 built and occupied
2025: Houses n°6 and 7 built and occupied
In each of the years a home is built and occupied, the city will certify TIF in the amount of $25,000 per home with the county by December 1.
The city would begin collecting property taxes on the additional property value (TIF) beginning July 1 of the year after the home was built and would continue for a 10-year period.
Crawford said that at the end of the 10 years, the total TIF property taxes collected would be $25,930 per home.
Johnson said at Tuesday’s meeting that due to the rising cost of homes, he thinks payback for the city would be faster than 10 years, with the assessed assessment bringing in more than $2,500 in property taxes. per year.
Another housing issue was tabled at Tuesday’s city council meeting. This was a discussion and possible motion on a development deal with Steve Gilbert with Hometown Housing regarding the Fineran addition on South Main Street.