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Meeting planned to discuss Yutan TIF project

Meeting planned to discuss Yutan TIF project

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YUTAN – The Yutan City Council agreed to hold a meeting with stakeholders to discuss a possible tax increment financing project.

At the council’s meeting on April 21, the council decided to set a meeting in mid-May with the city council, Yutan Board of Education, Yutan Volunteer Fire Department and the public to talk about Melvin Sudbeck’s request to use tax increment financing (TIF) for a proposed housing subdivision.

Sudbeck, of Melvin Sudbeck Homes, told the council in September that he was planning to build 200 homes over the next decade on a 70-acre parcel on the northwest corner of the community. The homes would range in price from $250,000 to $700,000. He asked then for a blight and substandard study, which is required for the TIF process. He offered to pay for the study then and again on April 21.

TIF allows a developer to capture the property taxes generated from the increased valuation in the development to finance eligible public improvements for up to 15 years. Sudbeck said he plans to use the financing method to pay for infrastructure improvements. An infrastructure study completed by the city earlier in the year indicated several water and sewer improvements would be needed to be done for this subdivision, which could cost over $3 million.

“I really need TIF to make this project work,” he said.

The city has four active redevelopment projects financed through TIF, according to information supplied by City Administrator Cole Bockelmann. They are Itan Parkview Phase I, which was started in 2014, Melvin Sudbeck Homes Phase 1 (2015), Melvin Sudbeck Homes Phase 2 (2017) and Thompson Redevelopment Project (2016).

Sudbeck said other methods, including forming a Sanitary Improvement District (SID), are not viable for this project, according to his fiscal agents, because of the county regulations.

“It takes that funding out,” he added.

After the September meeting, the council had talked about meeting with the school board and fire department to discuss the impact of TIF on their organizations. However, that meeting had not yet been held.

Sudbeck said he has a deadline to meet with for some of his sellers and would like to “get the pulse” of the council regarding the matter. He said the timeline for some of his contractual obligations is mid-June. He would also like to get the blight/substandard study started as soon as possible, he said.

Bockelmann suggested a meeting in early May. He said the logistics of the meeting will depend on what the state’s Directed Health Measures will be at the time regarding the COVID-19 pandemic. It could be held with some members of the council, Sudbeck and others in person, and the rest via teleconferencing. But he also said that a quorum of council members can’t exist in two places at the same time.

Yutan Superintendent of Schools Mitch Hoffer joined the meeting, which was held by teleconference, to give some input from the school district.

“We are generally against TIF just for the cost of what it’s going to do for us financially,” he said, but indicated that the school board would be willing to sit down and discuss the issue.

The council also approved Ordinance 761 to amend zoning regulations to remove a size restriction for accessory structures in areas zoned Residential 1 and Residential 2. The former codes allowed an area footprint of up to 10 percent of the total lot size, but had a 1,200 square feet maximum.

The amendment removes the 1,200 square foot limit to allow the structures to be proportional to larger lot sizes. Except for Transitional Ag and Residential Subdivision zoning areas, the structure cannot exceed the total area of the primary structure.

The council also discussed the Cedar Drive Asphalt Overlay project. The council approved Resolution 2020-6 to authorize financing of the project with a $110,000 line of credit loan. The council also approved to pay Lamp Rynearson up to $14,600 to oversee the project. Caleb Snyder with Lamp Rynearson said the project is scheduled for 25 working days, but the bulk of the work should be done in one to two weeks.

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