WILLMAR — Suite Liv'n received the approval it was seeking from the Willmar City Council Monday night, when the tax increment financing district and agreement for a new apartment complex passed by a wide margin.
"TIF is a great incentive to get the development we seek," said David Ramstad, city planning and development director.
In a tax increment financing district, the full amount of taxes on a new development are collected but then an agreed-upon portion is returned to the developer for development costs. In the Suite Liv'n TIF, the business will receive approximately $1.49 million total over 15 years.
"This doesn't impact existing taxes whatsoever," Ramstad said.
The new Suite Liv'n development will be four buildings with 72 units total on 24th Street Northwest, next to Ridgewater College. The total development will cost about $9.27 million. The buildings will be constructed on vacant land amongst other Suite Liv'n apartment buildings.
"This is the perfect example of an in-fill project; that is a benefit for the community," said Aaron Backman, executive director of the Kandiyohi County and City of Willmar Economic Development Commission.
There will be 40% of the units set aside for those making at or less than 60% of median income, a TIF requirement.
"These are affordable units. The housing shortage has not subsided," Backman said. "It is a tight market."
The council approved the tax increment financing district unanimously, while the agreement between the city and Suite Liv'n passed on a 7 to 1 vote, with Councilor Michael O'Brien voting no. O'Brien gave no reason at the meeting for why he voted in favor of the first resolution but not the second.
Included in the approved agreement is a maintenance plan which Suite Liv'n has to follow for all of its nearly 700 units in Willmar. If an issue is not addressed, such as garbage pickup or snow removal, the city will withhold the tax increment financing payment until Suite Liv'n is in compliance. A similar maintenance plan will be part of all such agreements going forward.
"We are working on a multi-pronged effort to address blight in Willmar," Ramstad said, and the maintenance plan is just one of those prongs. The Suite Liv'n agreement alone covers about 23% of the apartment units in Willmar.
A resident of Willmar, who lives in a building that is allegedly having serious maintenance problems, spoke during the public hearing portion of the meeting Monday to share her support for the new buildings. Jamie Anderson said the building where she currently lives is not maintained and has roaches, bedbugs and mold issues. She hopes the new buildings will offer an affordable safe haven for people living in bad situations.
"If we build these new buildings, we can save the innocent children, we can save families from dealing with these kind of issues," Anderson said. "We can shut down these apartments that are not being maintained, taken care of at all."
Anderson's comments moved several of the council members.
"We talk a lot about things like finances and issues like housing. This puts a real personal touch," City Councilor Andrew Plowman said. "It goes back to the heart of the issue. It isn't just business; it is people."
Plowman said programs such as tax increment financing could also help the wider community. If one developer starts upgrading and cleaning its facilities, others might follow, creating better opportunities for Willmar residents.
"This isn't just the city giving away tax dollars," Plowman said. "This is to encourage expanded growth and development."