Tonight, the city will hold a public hearing on the creation of Tax Incremental District no. 6.
A tax incremental district is an area created within a municipality where improvements are made and paid for through an increment in property taxes.
David McGirr, CEO of Greater Huron Development Corporation, says Tax Incremental District no. 6 will encompass all of what was originally Tax Incremental District no. 3 and Tax Incremental District no. 5, totaling the entire 114 acres in Southtown.
McGirr told the Planning Commission last week that Tax Incremental District no. 6 is needed for two projects.
The projects include the new Iverson Dealership and the second phase of the apartment complex known as Wheatgrass Village.
When Phase 1 of Wheatgrass Village was being done, the developer said that if the apartments were 85% full within one year then they would consider proceeding with Phase 2. The apartments were 100% full in the first nine months. The apartment complex will encompass an additional 10 acres of land adjacent to the other apartments/town homes. There will be 36 1-bedroom, 34 studio and two 2-bedroom apartments in the new facility. The studio apartments are similar to a one-bedroom apartment just without a bedroom
door.
The second project will be the Iverson Motors auto dealership that will site on 4 1/2 acres adjacent to Highway 37. This will be a combined dealership for Ford and Chrysler all in the same building. The new dealership will offer sales and service for Ford, Chrysler and Jeep, and for both conventional and electrical vehicles. The total project cost is approximately $5.4 million.
McGirr explained, the reason the Iverson Motors project was not included in Tax Incremental District no. 3, as originally planned, was that it took two years to get the final approvals from both franchises and therefore the tax revenue would not have been as originally projected. This would have effected the net payoff and term of Tax Incremental District no. 3. Due to this and the office complex not happening, Tax Incremental District no. 3 has under performed compared to its projections. Once Tax Incremental District no. 3 is created and begins to cash flow, all of the proceeds, as per state law, will be directed to payoff Tax Incremental District no. 3 since it was the first one in the development area.
McGirr said with all of Tax Incremental District no. 6 proceeds from tax revenue now being directed to payoff Tax Incremental District no. 3 first, it will increase the opportunity for the payoff to happen as projected or even early.
Total project costs for both the auto dealership and the apartment complex will exceed $12 Million, with the maximum eligible costs available from Tax Increment District no. 6 being approximately $4.8 million.