Developers seek TIF district for 44-lot residential project

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Pictured here is part of the 16.53-acre area in northwest Mitchell for which developers are seeking a special taxing district. Forty-four residential lots are planned in the development, which is roughly bordered by North Ohlman Street on the west, Sawgrass Avenue on the south, Thunderbird Drive on the east and Kemper Avenue on the north. (Austin Kaus/Republic)

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Developers are asking for a special taxing district to help develop a 44-lot residential area in northwest Mitchell.

ProBuild of Mitchell is planning the development at Lakeview Second Addition, a 16.53-acre area bordered by North Ohlman Street on the west, Sawgrass Avenue on the south and Thunderbird Drive on the east. The development is adjacent to the existing Lakeview First Addition, just to the south, and is just west of Lakeview Golf Course.

“It’s primarily single-family housing,” said Neil Putnam, Mitchell city planner.

Putnam deferred all other questions to ProBuild, but officials from the company did not respond immediately to a request for comment Friday from The Daily Republic. The Mitchell Planning and Zoning Commission will hold a public hearing on the matter at noon Dec. 13 in the City Council Chambers at City Hall.

The developers are asking the City Council to approve the creation of a Tax Increment Financing (TIF) district to aid the project. A TIF is a development tool that uses future property taxes generated by the development to pay off improvements made at the outset of the project. TIFs have been used in Mitchell to aid development projects such as Graphic Packaging, Home Federal Bank and Verifications Inc.

The 38-page ProBuild TIF plan shows two phases of the project needing total financing of $600,000. The money would be applied to real property assembly costs, city administrative fees, professional fees, and water, street and sewer projects.

“The type of financing is anticipated to be in the form of a bond or note,” the TIF plan says.

Over a period of up to 20 years, the new property taxes generated by the construction of homes would be captured to pay off the financing.

After the financing is paid off and the TIF period expires, taxes on the lots and houses would then be paid each year to local taxing entities such as the city, county and school district.

“The annual tax increment revenues are projected to average $180,400 per year after the 44 residential lots with improvements are being taxed at the full assessed value,” the TIF plan says.

The plan is to create approximately five lots and homes per year. Five lots with homes are expected to be sold by Nov. 1, 2011, if the plan is approved. The final four houses are expected to be completed before Nov. 1, 2019.

ProBuild has already completed the construction of a right-of-way known as Country Drive in the proposed district. If Phase II is undertaken, a second public street will be constructed and named Torrey Pines Avenue.

Tags: neil putnam, lakeview second addition, north ohlman street, tax increment financing district, tax increment financing, city of mitchell, mitchell sd, news, probuild, money