BAXTER -- Baxter's two-year moratorium on tax-increment financing for affordable housing has been lifted.
The Baxter City Council Tuesday unanimously decided to lift the moratorium in response to a TIF request from the Central Minnesota Housing Partnership and Kuepers Construction, which are proposing a $3.5 million, 24-unit affordable housing project on Excelsior Road. All 24 units will be considered affordable, with rents at $525 for a two-bedroom apartment and $625 for a three-bedroom apartment.
The council also approved separate motions, with council member Mark Cross abstaining from both, supporting the tax credit application and TIF not to exceed $14,400 per year for 25 years.
The project would primarily be paid with tax credits, but in order to be eligible for the credits the city of Baxter needed to contribute up to 5 percent, or $177,000, of the project costs.
A concern for the council is if staffers would have enough time to work on the TIF project, and if infrastructure on the site would be developer or city driven.
"I struggle with this," said council member Darrel Olson. "One concern is staff time. The timing for us doesn't seem so good, but it's only fair to give them an answer tonight."
The tax credits won't be awarded until the end of October, said Sherri Harris of the CMHP and construction would start in the spring of 2004.
Tax-increment financing is a method of financing public or private improvements that are needed to serve new development. While the existing tax on the property continues to be paid, the increase in tax value of the property is returned to the developer for a set period of time to help pay off the cost of the development.
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