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Discussion and Possible Action on an Amendment to the Developer’s Agreement associated with Tax Increment District #8.
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Summary:
PEM Affordable Housing, LLC, is requesting an amendment to the Developer’s Agreement associated with Tax Increment District #8.
Background:
Tax Increment District #8 was created to assist with infrastructure improvements in the Timberline Addition, specifically to provide access to 42 workforce housing lots. As part of the District, a Developer’s Agreement between the City and PEM Affordable Housing, LLC, was executed. The Developer’s Agreement identified 32 development ready residential lots shall be made available at a cost not to exceed $29,000 to Inter-Lakes Community Action Partnership (ICAP). Ten additional lots not exceeding $29,000 shall be available to ICAP, Habitat for Humanity, and/or the private sector.
An additional stipulation in the Developer’s Agreement restricts the final sale price of the lot and home to 80% of the South Dakota Housing Development Authority’s First-Time Homebuyer Purchase Limits. The current purchase limits for the First-Time Homebuyer Program is $275,000. Applying the 80% Developer’s Agreement condition, the sales price of the lot and house cannot exceed $220,000.
The developer has requested an amendment to Sections 3 and 4 of the Developer’s Agreement. Specifically, the developer is requesting removal of the 80% of First-Time Homebuyer Purchase Limits condition and simply restrict the final sales price of house and lot to the First-Time Homebuyer Purchase Limits, which is currently $275,000.
The developer has requested the amendment due to rising lumber prices.
Recommendation
Recommendation:
Staff recommends amending the development agreement purchase price to $245,000 as the developer is receiving a public subsidy through Tax Increment District #8.
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Attachments:
Memo
Amendment
Developer’s Agreement
Amendment Request
SDHDA Letter
Article - Lumber Prices