Franklin OKs funding for proposal that includes industrial, commercial, residential development
FRANKLIN - A new business park, along with a new tax-incremental-financing district, has been proposed to include industrial, commercial and residential uses.
The city's plan commission unanimously recommended Sept. 20 that the common council allow both the creation of the 145-acre TIF District No. 6 along and a proposed project from Bear Development.
The district boundaries reach to 112th Street to the east, portions approach Oakwood Road to the south, hit 120th Street to the west and is close to Ryan Road on the northern border. The project flanks Loomis Road.
There is no development agreement yet for the project, which is expected to cost $21.3 million, according to city documents. As presented in the plan, the projected value of the project is $64 million. If it goes forward as currently proposed, a large industrial user and the residential elements will be constructed first, Gunderson said.
Retail is expected to be less than 10 percent of the land within the district, according to city documents. The project includes about 75 residential units.
Project plan
Dawn Gunderson, vice president and financial adviser at Ehlers and Associates Inc., presented the project and TID plan to the commission Sept. 20. She said the plan for the mixed-use district is to include industrial use on the west side of the property, residential on the east side and a mix of industrial and commercial in the remaining area.
In a TIF, the increase in property taxes in an area declared as blighted is used to pay for public improvements and other costs within the district. Once the debt is paid off and the district is retried, the added tax base again flows to the general coffers of the city, school, county and other taxing entities. This TIF is expected to expire in 2037.
The tax increment from this district would be used to pay of $10 million in general obligation bonds plus about $3.9 million in interest. The developer is set to receive $3.6 million in incentives, but those are subordinate to the city’s general obligation bonds — it’s also based on the availability of additional increment funds (PAYGO).
In a PAYGO, or pay-as-you-go financing plan, the developer provides financing for projects and repayments to the developer, from bonds or other obligations, are limited to an agreed upon percentage of available annual tax increments collected from the improvements made by the developer.
Mayor Steve Olson hinted at an additional project near the development — a park for the neighborhood next to the northeast portion of the district.
Utilities will have to be extended onto the property and public road improvements are also planned, among other infrastructure. Some project costs will be funded by city borrowing, Gunderson said.
The recommendation comes before the common council Oct. 16 and, if passed, still needs approval by the joint review board which will meet Nov. 1.
