Planning Commission - Regular Meeting

All right. Uh I'm going to call this planning commission meeting for the city of Watertown on February 19th, 2026 to order. Brandy, would you please do roll call? Yes. Um Darcus Johnson. Picach here. Spy. Yes. Cohane. Tate here. Albe here. K. Yes, here. We have a quorum. Yeah, we've got a quorum. Uh, so I'd entertain a motion to approve the January 22nd, 2026 meeting minutes. Motion to approve.

Not all at once. Motion by Albby, second by Darcus Johnson. Are you going to let me do a voice on this one? Thank you, manager. I appreciate that. Um uh any further discussions, amendments, changes, or anything regarding the January 22nd meeting minutes? Hearing none. All those in favor say I. I. Opposed. Same sign.

We're going to count that as an I. Um it's why we're doing uh roll call next. Um motion passes. Any disclosure uh of conflicts of interest or exparte communication regarding any item on the agenda. That would be our two tiffs and our annexation and zoning and overlay district. Any export communication? Wonderful. Like to hear that. Uh any declaration of new business? Yes. I will introduce the alternates that were approved by city council. Uh during new business.

Perfect. Thanks, Brandy. Uh public comment sign up. If you have something that is not on the agenda that you wish to address at this board with, please sign up with Brandy. We will get to that before this meeting concludes. With that, I'd entertain a motion to approve the agenda. So moved. Motion by Tate. Second by Darcus Johnson. All those in favor say I. I. I. I. Opposed. Motion passes. The agenda is approved. That brings us to 8A, our regular agenda item, which is TIFF 21. Thank you, Liam.

Go ahead. And actually, I'll turn it over to city manager Alan Stagger to give us um kind of a brief overview of TIFFs as a little refresher.

I I'll just briefly comment. Uh Mr. Chairman and members of the commission, you are being tasked tonight with making a recommendation to the city council and the city council will be considering uh the tax increment financing program and district at their meeting. I I believe on March 3rd, um we anticipate that the discussion of the TIFF district could get um a little confusing and so I'd like to recommend uh the consideration of three topics as you go through your deliberation and consider your recommendation to the council. I'd like to recommend that first of all you consider the district boundaries um for the proposed uh tiff districts that you will see tonight and then secondly I'd ask that you consider uh the financial numbers that are presented in the tiff plan to ensure that uh it it makes sense to you that the anticipated increment or increase in assessed value of the property post development ment will generate sufficient revenues to cover the planned tiff expenditures. And then thirdly, there's a requirement that's frequently referred to as the but for requirement. And that requirement uh we'd also ask you to consider just asking this question and and asking whether you can answer it in the affirmative. And that question is would this development occur without the tiff? And I think as you go through those three um three bodies of deliberation and discussion, you'll be prepared to make a recommendation for the council um as as you go through the the presentation. Uh I will turn it back over to community development manager Hon and also point out that we do have

representatives for both of the uh property developers in the audience on both of the next two tiffs. Thank you. Uh, thank you, Mr. Allen. I very much appreciate that and I think that's excellent guidance. Um, Brandy, do you have anything you want to add before I call Toby up here?

Um, yeah. I'll I'll give some of the background of this tip request. So, this is tax incremented financing district number 21, and this is for the Oaks 2 project, which is located um off of 19th Street across from Runnings or adjacent to the Oaks One project that was completed in 2019. I'll pull up a vicinity map here um so you can see this is included in the TIFF plan. And then also the district boundaries are included and that is one of the items that you are approving specifically. Um along with your approval of the tiff plan as Allan explained um making sure you are verifying that the numbers provided work and that the tiff will be the tiff eligible costs requested for this tiff will be recovered by the increment that the investment into the property produces or generates. So um on here they this project h and this will be a project for a 72 unit apartment complex and the this tiff is classified for affordable housing because that will ensure that the rental rates are at 80% AMI or average median income which I did include what that looks like on your agenda packet and um they are not requesting the full amount for the tiff eligible costs. So the for this project the tiff eligible costs come to a total of 1,500,000 or 577,491

and they are requesting only 953,564. So they're not asking for the maximum and from their valuation their assessed valuation estimates uh they have proven that that increment will generate enough to cover these costs within the 20-year period. So with that I'll stand by and um can turn it over to Liam. Thank you, Miss Hannon. Does staff any uh excuse me, does the board or the commission have any questions for staff before I call Mr. Morris up here?

I have a question for staff. Go ahead. Um Randy, why 8% um for the rental rates? Why was that chosen as a benchmark? That is the room instead of instead of something for example HUD benchmarks are 6065 and those are at 714 for a studio 801 for a single bedroom which are considerably you know different I'm not saying this should be a hub benchm bar but why 80%. If we're looking at this for the public good,

I believe that's through South Dakota housing standard, but I'll also let the consultant for the project better suited for Mr. Morris. Why don't you come up here, Mr. Morris? Mr. Chair, and guys, real real quick, when I was talking about this one, I actually scrolled too far and I had the other district boundaries up. That's what I This is the one. Mr. Morris, come up. U take a seat or at the podium and then please just introduce yourself. What do you need? Uh

uh just a quick question. U Randy, um so the the rate since he's not taking the full amount that he could be asking for, does this still take the 20 years to repay the does the tax reflect that? Also and again, don't don't get me wrong, I have no idea how that all works. I just know from our meeting last week that there is. So is is the tax base returned as quickly as it would if you were taking the whole thing is what I guess I'm getting at or is that also prorated if you will from the from their valuations they will be able to recover it within the 20 years but it will be up to the 20 years for how the estimated assessed value is.

I've got a guess that Mr. Morris is going to address that. Floor is yours Mr. Morris.

Thanks Mr. Chair, members of the commission. Toby Morris with Collier Securities. Uh do a lot of work in tax increment financing throughout the state. Uh I'm a registered municipal adviser, which that means is I have to adhere to a strong code of ethics to always make certain that we do what's responsible for the city. Uh the reason we get involved a lot with tax increment is one, we understand what's best for the city and trying to find the common ground with the developer and in a way trying to bring those two together in the world that we um are presented with you here tonight. Uh, so I can give an overview maybe. Do you want me to address the specific questions, Mr. Chair? How would you like my presentation?

I guess a brief overview would be helpful. I had a few questions, but I'll wait till the board is done.

Okay. Uh, what you have here, not only with 21, but in 22 is you have local South Dakota developers investing within South Dakota. uh Stencil in particular. I think it's great to see the amount of capital that they've deployed not only here in Watertown on the Oaks one, we've seen them in Aberdine, we've seen them in Pier, Yanked in Spearfish. And part of my job is to always make sure I vet to know who my client is. The last thing I want to do is bring somebody on a freshman or a junior varsity level by all means that just come in, put a project down, walk away, and then it's forever somebody else's problem. So, you have a very capitalized person. you have a proven developer with their track record. Uh what led to this development was the success with their Oaks one and when you've when you are a property manager within a developer and you have that capital deployed, you also have those overhead costs. So that just made natural sense for them to come back and look at within uh Watertown of what could make this uh an exemp expansion of their existing project. And so what you'll see is those 72 units. What we do is we dissect it very much. Not only do we bring a plan to you that's compliant with South Dakota Department of Revenue that follows the statutes, but also we we take a look underneath the hood to see, okay, is everything else making sense? And there's a lot of questions about the numbers. And I'll tell you, as somebody who's done a lot of tiff plans, those numbers are extremely hard to project. You take me this year in the the session. I think every other bill rhymes with property tax reform. Well, every property tax reform has a direct and indirect impact on a on a tax increment district. If we want to get rid of owner occupied taxes, well, that single family developer out there is going to be upside down on their tiff. If we want to reduce property taxes 20%, all tiffs are upside down. If we look at mill levies, uh, you know, it's

impressive just to see like what Watertown, the city of Watertown's mill levy in 2015 was 2.33. Now it's 1.69. So again, if you're trying to project in the future, what we do is we go very conservative. The numbers that you see before you is actually the valuation off their Oaks one. Uh, what you don't see in there is you don't see an interest component in there. You don't see developer fees. It's basically a dollar in dollar out for whatever actual dollar that they are putting into true infrastructure cost. Uh hardest part of my job is taming the egos of developers when they say Toby I have 2 million of infrastructure expense. I said yeah but you only have a million of revenue. So my spearfish spart math says you stick to whatever your revenue produces and what that produces then goes into the plan. That becomes the binding contract going forward. So when the developer agreement comes in, they still going to have to cost certify this. Um, you know, and that's the problem with TIFFs. We got to project into the future of our best estimate, but then we go back and we validate everything to our estimate. We can state that it will not exceed that 938 amount in there and it will be certified over a period of time. Now, to pay back my estimates, typically I'm getting old enough now that most my tips are paying off in 15 years. And in this case, I would see this being very conservative because we're going off the 2122 estimates of the oaks of that four million. But why um Mr. Stagger brought up the the the but for test. The the problem we have as we're seeing in pier right now is property tax and affordability. Uh the statute allows this to be classified as workforce housing, affordable housing, which then goes back to South Dakota housing where they're um classified as 80% AMI. Uh the I believe the member on the phone had

brought up why not 60 65. The 80% is what has been set forth. Uh if you get into the 60 then you can get into low-income housing tax credits. There's different offsets for that. So, this is really meant to be that that workforce housing where they will have to adhere in the developers agreement. We will state that if they happen to want to charge $2,200 for a two-bedroom, their risk is Allen comes along, revokes the TIFF, and says, "Sorry, you broke the contract." And then they're upside down. So, there are some clawbacks and teeth within the TIFF itself. Um, I can go on further in the numbers. Uh, I'm more afraid, Mr. chair of the parliamentarian on our my right if I'm not doing it right so I'll sit here and be scared

he he's an asset most of the time Mr. Chair go ahead Mr. Okay, a question. Toby, could you just for the people listening, the audience and those up here, just explain to them how school districts and county and city and other taxing authorities are made whole through the tiff process?

Great question. So, we have the base value and it's kind of like planting a tree. We're not going to have shade today. We're going to have it tomorrow. And then the question comes the but for would this have happened but for the tiff and when you look at your developers of where they're deploying their capital they still have to make a return. And so what that tiff does is allow for that return with the conditions. In the meantime the city the state or the the the city and the school districts the school district in particular is held harmless on their general fund. Schools will tell you and we do a lot of school financing. They're funded on a per student basis. So if within these 110 basically 200 proposed units before you if they can pick up another say 20 students that's anywhere from 8 to 12,000 per student depending on how you look at the capital a general schools you know their their expenses don't change because they have the overhead but now they have the increase of the students and that's what they would want to see. Then when this tiff expires, the city recognizes that as growth at a at a later date

and then it effectively becomes that's the property tax rate and then whatever the mill levy is gets returned to the school district. Correct. That growth is then go go back into the formula once it's retired. Yeah.

Yep. In the meantime, this the the intent is the the school picks up those students. And I think one of the things that's confusing to folks, or maybe it was just to me early on, this we've not been at this for 10 years. I think last time I saw you or seven years ago, um uh the school district doesn't go backwards from where it is today. It it it doesn't it's not losing any money. The money is not being reallocated away from them or reallocated away for any the city or the county for that matter, right? It's just that the difference between what it's assessed at currently versus what it would be if it was built tomorrow um that isn't realized for a period of time. Correct. As new growth, that's the key important thing.

Mr. Chair, go ahead, Mr. Case. Uh one other question, Toby, for clarification. Uh self-funded versus a city-based tiff and what this is and what it's not and the exposure to the city. The the exposure to the city is minimal. The only thing they need to do is pass on that increment. They're not taking on any debt. Uh you'll even see in this plan, I write it as an annual appropriation. So when you go to issue any kind of sales tax, bonds, or anything else, this does not count as constitutional debt under the South Dakota Constitutional. So it's it's you're a partner with no liability.

And in the unfortunate situation which the tiff goes underwater for whatever reason, it's not like the city is left holding the bag. Correct. Correct. And or the county for that matter. N other questions from the board. We have some real experienced tiff folks on here. I'm kind of expecting some more substant substantive questions. Go ahead, Mr. Tar Johnson. Again, it probably has nothing to do with the finances. More again for the for myself and for maybe some other viewers listening. How many three-bedroom, two-bedroom, onebedroom are in this new proposed plan or has that not been determined?

Uh it's mainly onebedroom and twobedroom. You very rarely see any threebedroom anymore. They just don't rent. Um I think I had the rent roll broke out of that 72. If not, I apologize if I didn't put that in there.

I'm going to I have to ask the question poses to me. Why why do three bedrooms not rent? It's amazing that they just they really don't because at that kind of family, if you're in that um they're more into a single family home at that time. You're you've graduated from that two-bedroom into that. Uh I would say 98% of the multifamilies we work for, I do not see any threebs in there. You have eight three bedrooms. Do they rent well for you or Yeah. Yeah, Mr. Chairman, I'd

make a recommendation that that perhaps the commission consider the the location boundaries first and and follow an order and and then look at the assessments and the numbers. We can bring some guides up on the screen as we go through that. Uh, for example, page 28 and 34 will be helpful in discussing the numbers, but we've got the location up on the screen right now if you'd like to discuss that. Perfect. Does the board have particular questions regarding the location?

Go ahead, Miss D. Um I just have a question about um the traffic for this particular um it's going to go through the people people are going to go through that existing parking lot for Oak one oak one onto 19th. Is that how people are getting out of that unit out of out of their away? How do they get out of there? Are you looking at 21 or 22? I think we're going to try to focus the discussion on 21 currently. I mean obviously a lot of the background of these tiffs deals with both of them. They're similar both in style but but we're talking about 21 currently oaks. I can answer that

for the access will be through the existing driveway where the oaks one ent enters and we looked at this as the two-phase project originally knowing that we would have the 150ome units entering through the one access Mr. And then they have secondary access shown to the towards the north. Mr. Chair, go ahead. Question for staff. Uh, regarding the boundaries, this property is currently zoned for this type of use. Yes.

Um, and again, I think specific to a um apartment complex andor the parking and how that transit, that's really not part of the tiff discussion at this point in time. It's really more about the boundaries and whether or not this is an adequate place for the tiff. Correct. That that's my take on it.

Correct. Thank you, Mr. Kay. Yeah, I would like to limit it. We're we're talking at this point. I would like to limit the questions to the boundaries and the rules regarding the boundaries. I have a question. Um, and I don't claim to be a TIFF expert. Um, I've learned a fair amount of what I know from talking with folks like you. Is the blighted concern requirement is that more or less done away with and how do we how do we meet that definition when we talk about the actual location?

You you you mean it by its or the benefit to the area itself. So if if you go back in history, where do governments get their ordinance from? They copy it from somebody else. South Dakota copied theirs from Chicago years and years ago. And um I've worked very hard to eliminate that term blighted because there's early in my career we were blighting corn fields because there's no other way to get around it. It seems like a misnomer and in fact I think 11 911 says or otherwise which is pretty big catchall. Yes. Um but so but that's not a concern I guess is my point is that n this doesn't need to be some dilapidated building to comply with the statuto.

No. And it fits within a very specific area. So you can't have like this major crop dusting of an area by any means. So we're we're sight specific. And and what is the what's the rationale behind individual lot or portions of lots tiffing those as opposed to diff tiffing you know multiple platted lots at a single time? I mean was the intent of this I mean maybe you probably weren't around when it was drafted but but why that was that's been a concern I've had for a long time. Are we talking tiffs in general?

Tiffs in general. I mean, but but when we talk about this location doing a single lot or a half of a lot, I don't know exactly. I The plat map isn't up here right now, but why are we tiffing a single lot as opposed to an area? You you want to control the revenue just specifically from that lot. If I were to make a much larger area, I could create a much larger revenue stream, which then the developer is going to say, I want a much larger tiff. So, okay, that's my ego taming I do with them. Other questions regarding the location, the boundaries, excuse me, is the

I have a question for either either Brandy or Toby. So, seeing that this um boundary does does uh go into where part of the existing parking lot is, there was no I didn't look over the numbers previous to the other tiffs I was familiar with, but there's no overlapping on on this district, is there? No, not from our research. It was its own separate legal. Okay. And overlapping is allowed. I think under statute it is, but it just kind of Yeah. Okay. Um, other questions regarding the boundaries of the TIF.

Okay. So, take us through the finances then specific because that's one of the charges that we have as the planning commission.

Project costs, feasibility. So the finances are are based we look at it kind of on a per unit. We now we're taking our valuation off of oaks one. So there again I'm going to say this is extremely conservative. U more than likely it's going to probably be maybe 10 15% higher in that. So from the feasibility study when you have to prove it on the codified law we're saying hey this proves out if it were to go out to those full 20 years. more than likely you're only going to go out about 15, maybe 16 years. It just really depends on the start of construction. What you have with both developers is they put their running shoes on and when they say go, they're going. Uh, which makes it very nice. We've seen a lot of projects in state, they say we're going today. I just didn't ask what year they meant of today. So, but yeah, that's just a simple projection. We taken the mill levy. Uh, we kept the mill levy the same. We kept equalization the same. Uh, and that's where we just ran it out to say, okay, this proves out here. Now, if valuations go up, mill levy stays the same, it pays off quicker. If mill levies go down, valuation stays the same. Then it that that's the given the take of how fast that goes, but typically we've been seeing reappraisals about every four years.

And those appraisals never go down. generally not any other questions regarding sort of the finances. I have one. Go ahead. Maybe this is Todd Todd might be able to answer this for me if my memory doesn't serve now. Um if I recall, Codington County does have um a discretionary um thing for commercial property. Does the R3 count within that? And will they be then waving that discretionary? I'm guessing my understanding is yes. Absolutely. And yes, that we wouldn't they're not going to be seeking discretionary tax formula with this proposal.

No, we put it the plan and more importantly, we're going to put it in the developers agreement. And even more important, when TIFF legislation comes forth, we're going to have a codified law. It's one or the other, even if it's not in an agreement or plan. Thank you. Um, I was a little bit confused and maybe Mr. Morris, you could answer that or staff could answer this. Um, it's presented as an affordable housing tiff, but there's at least one spot in here that the city has determined that this will be an economic development district. Which is it? Or are they the is that the same thing? Is an e is it affordable housing underneath economic development?

Yep. So staff reviews the tiff plan submitted to and and I did catch that but it's because it's an economic development tool but this is an affordable affordable housing designated correct tiff when we talk about the four component or the four main categories of tiffs 1313 102 correct this is affordable housing right yes not economic development okay so it's little e little d economic development I think that was page 18

uh mr Morris, some of the concerns. And again, I don't because most of the tips that we've dealt with here on my tenure have been self-funded. I guess from the city standpoint, I don't care, you know, whether or not they're underwater, but a fair amount of them are currently underwater. are the ones we've approved since I've been on the board, including ones that you presented um previously. I think I think you did the Ter if I remember correctly, but um and I'm not sure exactly if that's one of them that was or not. Uh do our I get the impression both from reading the plan, listening to you and talking to others that perhaps how we're doing tiffs and the amounts that we're using and sort of the inputs are much more conservative maybe than they were five or six years ago. Is that accurate? I I would say when I'm involved, I'm always more conservative uh on that and and how you look at it. Some can be very complex. Take the TX one for example. Where else do you find a half a million square feet in South Dakota is comparable and

how do you assess it? Yeah, I actually pulled up that plan and my projections were 11 million the first year, 11 million the second for 22 million and now looking at the department of revenues assessed valuation, it's 23. So it was off by 1 million. That was pretty close. Okay. Um I mean that was just kind of my concern is that we're we're supposed to approve the plan and I want to approve plans that are functional. If not, we need to change whatever the input variable is to get us there. But but you feel confident that that this plan will won't be underwater in five or six or seven years.

Well, I can't say that because I don't know what the circus and pier does on a on a yearly basis. What I can say regardless of where it is in five years, the city will not be writing the check. And I think in past concerns, that's where that liability stands. It's it's all fun and games till you sign your name to that bottom line. The developers, they generally have no fear. They want to go do it. And guess what? The minute it goes vertical, the city wins because if they don't make it, somebody's going to come along right behind them. But at the same time, you now have 110 or 7 plus 72 units that are in the community. That's hard to argue with bedrooms. Um, other questions regarding finances. Mr. Stagger,

I I have a question for Mr. Morris and perhaps you're not qualified to answer it, but c could you give us a definition of what the full and true value of real property is from a a county assessment standpoint. That's because you have your full and true and then you have your assess which is your equalized. And it's really kind of a a game with taxes of where it is. We see assessed value on the western side of the state as low as 85% and we see it more on the eastern side closer to 95 to 100% and department of revenue. They regulate that. There's some counties that have wanted to go below 85 because they don't like property tax, but it it's it's basically a discount of what that value is should it be 100% assessed.

Thank you. Can can I go ahead Mr. make another statement? So if if we were to look here at page 28

and and from my understanding the full and true value is supposed to approximate the arms length transaction if somebody were to buy the real property. For example, if I were to buy the house of any commission member, I would pay the full and true value. So, in this case, on page 28, you can see that the developer is going to invest over $16 million into this property. And I would think if the developer is doing that, if a third party were going to buy this property, they may play something close to 16 million. To demonstrate the degree of conservatism in this plan, we have assumed that the county assessor's office will be assessing this property at only 25% of that value at $4 million, which means it's not starting anywhere close to full and true value. And I bring that up because we hear a lot of criticism of TIFFs. The reason why tiffs are not working in Watertown, South Dakota, is because this type of math has been inappropriately applied to our tiffs. And this is important because this is one of the few economic development tools that we have. So, as you consider this proposal tonight, just recognize this is extremely conservative. Now, if you were to consider what this means, that we have a variety of commercial non owner occupied properties in the county that may be assessed at 25% of their arms length transaction. Consider what that is doing to the property taxes of every homeowner in the community. And and so as you consider this, ask for your help in trying to get that fixed because without utilizing these

tiff tools, we have very few tools to help people such as this developer develop housing in the community. So I I wanted to give that background and I know I went a little deep on it, but I think it's it's real important that you hear that, Mr. Sager. I appreciate that. Um and that's Yes. Go ahead, Mr. Star Johnson.

I And I'm just doing math because math. So, you're telling me the project is worth $16 million and there's 72 units. That comes to $222,000 per unit to put up. That to me just sounds astronomical. But again, I have not dug into a building project myself, but I have done building projects. So 222,000 just sounds huge. Perhaps that's a real number, but

well that was um if if you attended the the meeting the other day that was one of the highlights that you you were well because I think they talked about basically if any projects coming in under two that you should be paying real close attention and if they're coming in over three. Oh unfortunately that is what we're dealing with.

That's the sweet spot. I mean the number is there. That's the sweet spot from a development standpoint. Uh, other questions regarding the financial aspects of the TIFF? Like to keep her on track so we can keep going. That brings us to our but for requirement, which is one of the more fun ones. Um, I see that this developer has done quite a few other projects in similar communities and in Watertown. Um, are those other ones tiff, Mr. Morris? I would say within 90% of them are depending on when they were built. The you know the inflation let's always throw out the co word again. Uh I don't see a project in the state for the most part unless maybe you're in Rapid City or Sou Falls where you can demand those rents and you get a lower cost of construction. But projects we're working on from Aberdine to Pier to um Spearfish, you name it, they're all requiring it just to help get over um that stabilization and occupancy because it, you know, the rent should be in that 1,800 to 2,000 based on those costs. The tiff brings that down, but what really brings those rents down is going to be competition. So, we need to get more um volume into the market on that basis.

Other questions regarding the but four I call it butt for test. I live in the world of butt for

devil's advocate here. So I'm just going to gohead one more time. So you just mentioned that it it brings the rents down. So what about the well your first project you didn't you didn't use a tiff right to get the first building up in 2019 I believe. No. Okay. So you're I mean you're almost working against yourself. You're saying that it brings rents down. Competition will bring rents down, right? Yep. So, so or I shouldn't say down. It's

the only two buildings, the only two landlords in town are the two buildings in town. So, you're going to build this one for less rents. You're going to charge less rents here. You're actually cutting your own throat on the other property that you were getting 1,200 a unit and now you're getting 800 a unit for that same unit. Just I mean, it it that's how I see this. And I might be all wet and I might be just, you know, crazy minded, but that's when you say that it brings the rents down across the board. How does that help the person who did not get the tiff? Or how is that a benefit to them? Because now their rents went down and they didn't get the benefit of the tiff to put their building up. They had every option to come and ask for a tiff, but their building was built.

Well, I'm going to I'm just I'm we're not at the discussion part of it, and I'd like to refrain. I'd like to keep the questions regarding the but for requirement because that is a that's a requirement that we have to approve the plan or excuse me recommend the plan for approval to the council. So I would like to kind of keep the discussion limited to those kinds of things and I I mean my question is genuinely if you don't get the tiff does this not get built?

That's that's the heart of a but for question. Um, I would probably say yes without fully speaking for the developer just because of the economics. When you're over 200 a door at 6 and a half, 7% rate, 2019, you were probably 90,000 a door at 3%. Those are the obstacles that are different between 19 and 2026. When we talk about when when Oaks One was constructed, it was a wholly different environment. Yeah. 3% on a million is 30,000. divide that you it quickly adds up and escalates.

Other questions regarding but four? Any other questions regarding tiff number 21 for Mr. Morris? Um all right, we do have a public hearing on this one. Before I open the public hearing, I did have a question. Are we doing the resolution? This probably for you, Miss Caricole. Are we doing the resolution? Um because we have to set the boundaries and we have to approve recommend the plan. is that one single resolution is acceptable for that.

Okay. And I'm I'm verifying with my parliamentarian that we're happy with one resolution as opposed to two separate items and actions. Okay. All right. There is a public hearing on this. I'll open the public hearing. Uh thank you, Mr. Morris. Please take a seat. If we have other questions, we'll call you back up. That was long. And hopefully the second one won't take nearly as long because we had talked through a lot of the generalities of tiffs. Public hearing. Anyone here to speak on or against or on behalf of or against the tiff? All right. Anybody online has anything they want to add about the tiff? I will close the public hearing and I'd ask for an action on resolution 2026-07.

Mr. Chair, go ahead. Mr. Okay. I would make a motion to accept resolution 202607 designating the district boundaries adopting the project tax plan for the tax increment find financeing district and including a statement that the project would not move forward but for the tiff. We have a motion second. We have a second. Motion by case second by kasich. I'm practicing still. It's still wrong. Further discussion on tiff number 21. Mr. Chair, go ahead, Mr. Case.

Um, for everything that's been talked about tonight and just reiterating what city manager Stagger said, we have very few tools to work in the areas of economic development uh in this state um to a fault. and we're battling constantly every day for the last couple weeks in pier trying to maintain them. Um, this project is going to bring uh necessary workforce housing which has been identified in many different recent studies. many of us that sit on housing subcommittees and um it's it's a it's a win-win. If additional units create lower rents for the citizens of the community, regardless of who owns those structures, it's a good thing for the community. Uh and because of those reasons, I will be in support of this motion.

Thank you, Mr. K. Other comments? Uh, I'll add, um, there certainly tiffs are in the news lately. Um, a lot of different issues swirling around there. I think a lot of them focus on whether or not they're self-funded or they are funded by a governmental entity, which is a big concern. I think when we have self-funded tiffs, basically meaning the developer and or a bank funds it, uh, you don't have as big of a problem or you certainly don't have a risk for the city. Um, that's one thing that I look at when we talk about tiffs is whether it's I mean, I think that's probably the biggest consideration about whether or not it's just a good idea generally. When we talk about the but for consideration, um, you know, I think Mr. Morris addressed that that this is unfortunately a wholly different environment than it was even just six years ago. Uh there are a lot of different places we can go and things that we can point at to about who's at fault or why that is, but that that's the reality is that the unit cost is exorbitant exorbitant even compared to just a few years ago. Um when we talk about u you know other things like the financial numbers of the boundaries the tiffs one of my personal concerns has been that I've overseen or at least voted on eight or nine or 10 tiffs and they are um some of them are underperforming which is concerning to me even if it doesn't cause damage to the city or the development company or something like that. I think that's frustrating that we're approving things that might not be performing. The flip side to that is I as Mr. Stagger pointed out that this is a much more conservative numbers in the variables we're using. And I'm hopeful that um I don't want to throw the county under the bus, but but um but hopefully we can bring assessments more in line which will assist with the issue of the performance of the tiffs. Um and again, as Mr. K indicated this is really one of the only tools that we have in our toolbox in order to promote this kind of

development. A development that is sorely needed that's been that we has been discussed at nauseium in housing studies and department studies and uh workforce task force studies all sorts of stuff that we need these kinds of projects. So with that I'm in support of the project. Any further discussion before I do a roll call? Roll call. Case I Albby yes. Tape yes. Cohane yes. Spy yes. Kchek yes. Vargas Johnson. Yes.

Seven. Yes. Zero. No. Motion passes unanimously. I counted right. Yes. That brings us to number 22. We're going to be a little bit more abbreviated because we covered a lot of the base ground on this. But go ahead Randy. Background.

Okay. Thank you, Liam. So again, this is a affordable housing tiff tax increment district or financing district number 22. This is for the Dakota Commons Reserve project that I'll get to here after I scroll through. So, the boundary map of the location, this is in the area that was recently um approved to be annexed and zoned and reszoned to R3 multif family residential. The di the district boundary includes the area all the way to 19th Street which includes an additional lot um that is zoned commercially C2 local commercial and then and then the the lot where the project will be placed is R3 multif family residential. The reason why that other area is included is for uh installation or construction of a secondary access to potentially reduce or to help with the traffic on Parkview Trail. that is still th those details are still being discussed and the traffic study is um not complete yet, but we did include those figures in this TIFF request so that it would most likely be constructed. So we are waiting for those site plan updates and that will be a part of the building permit issuance which is why you don't see that on the site plan um submitted with the plan. So this again um there will be 17 million

approximately 17 million worth of investment to this project. this there will be eight 14 unit buildings uh for a total of 112 units except the tiff plan does say 110 so they might have a couple 110 units or 112 um but the total tip eligible costs are 3,275 and $79 9 and the developers are only requesting $2,89. So again, less than what the eligible costs would allow them to request and that is reflected that the increment will recover that amount without um through within 20 years of the tiff district being created. So with that, I'll stand by for questions. Board questions for staff.

Okay, I'll hold. Uh, Mr. Morris, would you tell us briefly about tiff number 22?

Thanks, Mr. Chair. Again, on the the back of tiff number 21, you have a lot of similarities in terms of you have that developer that's committed to South Dakota, proven in South Dakota. Uh I want to maybe first address a little bit the economics and this is what makes our our job extremely tough is when you start breaking buildings up like you have here in eight buildings versus one big building. What we found through experience in in Yankton County, Lake County, and a few others is that the individual buildings will have a higher assessed value than when you look at the units as a whole. So, what we did here again is we went conservative where we're about a,000 or,100 per unit to get us to that 110,000 is where it comes out to. Uh I think we're we're being again very conservative on this side, but when you compare it to the 72 unit, that's what you have as a higher valuation. Again, based on what we can see as comparables throughout the state on that. The other thing that we addressed in here as well is is we put a contingency of 200. Again, that will be addressed contractually with the city. It's going to have to be verified. It's the the problem with TIFFs is we have to project in the future. In a perfect world, we'd be able to come back and say, "Okay, this is what happened. Now, let's assign everything, but we have to put a number in there. It doesn't mean it's going to be 200. It's not going to be more than 200. If it's less, we'll cost certified on that basis with the city on that part." And so, again, I think as a whole, it's addressing what your um your 2023 housing says. You have a huge demand. Um you've got very qualified developers doing this. So, it's uh their their track record is is very solid. As we know in South Dakota, you're only as good as your last project. So, if you mess up, you might as well find a new zip code out of state. Uh questions for Mr. Morris regarding and again, I'd like to keep the format. You know, our job here, our charge as a

planning commission is to um assess the boundaries of the tiff and to uh and and to approve or recommend the plan to city council. questions regarding Mr. Chair, just point clarification, we're we're going with the two lots in the boundaries because there may be a need to build a road access point and those costs have been incl have been incorporated into the projections the tiff. Correct.

Thank you. Any questions? Other questions regarding the boundaries of the tiff district? Uh financial aspects of the tiff plan. Any questions regarding the financial aspects of the tiff plan.

Mr. Chair, go ahead. Mr. Price point again, I didn't do the math. Um per unit cost that Brenda was talking about.

Go ahead. Please identify yourself real briefly. I'm going to take a privilege here.

My name is Dustin Hendrickson. and I live in Brookings, South Dakota. And Russ is my business partner on this deal where we're he builds with us. Um he lives in this neighborhood. We have developed a unique affordable housing plan where we strip out most of the amenities and elevators and things. So we try to build at the lowest price point possible to keep those numbers down closer to 60% AMI or even lower in some cases. So, it's very what we're doing is very unique. We haven't seen any other developers doing it. So, ours is abnormal pricing and most units are 200 plus from what we're seeing in the marketplace.

Thank you for that clarification. I appreciate that good question though and I appreciate keeping everybody honest. Round up Johnson. Uh but four requirement. Uh Mr. Morris, come back up real quickly and and address this but four requirement again. um when we talk about and I'm we don't need to hammer it again but I think that given that this is a separate action uh that the record should reflect that we've addressed the butt for issue.

I would go back again on the record and saying it's it's economics. It's being able to offset those initial costs through startup, through stabilization, um, and being able to still keep it within that 80% AMI on that is is what I would go on the record saying. Just it's solid economics. Perfect. Okay. Any other questions for Mr. Morris?

Randy, could you just bring up the site plan or the proposed site plan again? I know we don't hold them to that. I'm just you scrolled through it a couple of different times and again I just would like the public to be able to see that I um I thought this was a great design by the way question for you. So the the street if it does need to go in would that be on this on on the bottom of this map which I assume is the south. I'm going to refer to the city. I stay away from engineering. I'm not sure which way. I'm not sure if it's flipped upside down or so actually from this orientation the um

on the right hand side that is facing north. So actually right here up to the west. Gotcha. Thank you. is where the access would come from their parking lot to straight to 19th wonder street. Thank you. Yep. Yeah. This is Park View Trail over there.

Okay. Any other questions for Mr. Morris before I open the public hearing? Okay, I will open the public hearing. You can have a seat, Mr. Morris, if we have any other questions during or we'll call you back up. Public hearing is open. Anybody to speak on behalf of, against, or neutral regarding the tip 22? Anybody online? Mr. Chair, question for the developer. Go ahead. I think I've seen uh how you guys have approached this in other communities. We go in and You start by building one building. Once that building gets up and she starts to fill in, then you're using that to cash flow subsequent buildings. Is that how you guys do that? You're not coming in from starting 14 buildings all at once. Right.

Right. Well, we don't. It's we bu we start them kind of at all at the same time. This one we are going to start four and then complete four and then start another four. But yes, one building will be ready in about nine months and then another building every one to two months afterwards. Um, but we still need the tiff to keep because the these are smaller units as well. So, these are even more affordable than a standard unit. But it's all just the price per square foot to build and the cost is and with the rents have been flat. Timing and everything. Three years. Yeah, you you pretty much have to have a tiff to do any apartment building right now. Thank you. So, appreciate. Thank you.

Anybody else from the public online? Anybody has anything they want to say about tiffs or about these tiffs? This tiff. Okay. Hearing none, I will close the public hearing. Um, and I'd ask for an action on resolution number 20268. If number 22, go to comments. I move to approve as presented um the boundaries and the project plan um for number 22. Got a motion and the but four and the but four

I noticed also that um and I don't know if it has to be in the resolution or not but that we have not we're not over our 10% total taxable cap. We didn't talk about that last time but um I think statutoily we at least have to talk about that. are way under where we are way way under but we are allowed to tiff a lot more under statute we could tiff a liberty land we could don't sh can't be named that can't be named um so we have a motion uh and I don't think I heard a second yet second second by Mr. K's further discussion regarding this tip t number 22

I would just like to reiterate my comments Mr. Case's comments in the previous one um regarding the buttfor regarding generally the tiffs in general. Um, I'd like to, yeah, reiterate, and I think it shows up in both TIFF plans, uh, that we are well under the statutory maximum of our allowable. I think it's page eight on the plan, page 15 on the agenda packet. Other 65. Randy, roll call. Darus Johnson, yes. Kak, yes. Spire, yes. Cohane, yes. Tate, yes. Albby, yes. Case,

yes. Have an affirmative, zero, no. Motion passes unanimously. That brings us to annexation. I know you guys have waited very patiently. Thank you for your patience. Of Harmony Hill, please come on or no? Well, Randy, go first.

Okay. Thank you, Liam. So, let me get to this agenda item. This is an annexation and zoning request for the Harmony Hill subdivision. This will be a an additional phase and they are proposing to bring in 2.8 acres into the city limits and zone it R1C compact resident single family residential district. This will um this area will also include and I sent first district the information and Ryan is on top of it. So, he's already changed the boundaries of city limits. Um, but that that is the area that I've have circled there that we're looking at. Um, and then you can see a portion of the property that is already within city limits. Um, and a subsequent reszone will be coming forward at the next meeting to also reszone to R1C to match up with this annexation and zoning. and then the property will abut challenger way um alto together. So uh I did talk with uh water municipal utilities today and it was and did inform the applicant that this property actually is within the subro water territory. So there is a um a payment that needs to be taken care of with it with annexing um and and I did discuss that with the applicant. So, with that, I'll stand by for any questions.

Staff have any questions before I invite the applicant or applicants up? Wonderful. This is a uh we're going to take we're going to have one public hearing and two actions. Yes, sister, Mr. Clatt, whoever wants to speak.

Hi, I'm Barbara Younger um from the monastery. Um we're very glad with SCI that we've got a partnership that really works to bring in single family homes. Um it's been part of our vision for many years now. So not my first planning commission rodeo. So gratefully ask that we reszone so this can can become a reality. A reality.

Thank you sister. Uh anybody uh anybody other applicant um speak on behalf of the applicant? U I'll open the public hearing on both the annexation and zoning. Anybody who speak on behalf of or in favor of excuse me or opposed to or neutral? Anyone online? Anyone? I will close the public hearing on annexation and zoning and I will ask for a motion on annexation which is resolution 20264. So moved. Motion by case. Second by Darcus Johnson. This I can do by voice vote.

No, but no, sorry. Mr. Stagger wants me to do it by roll call. Uh, any further discussion on the annexation? Anything anybody wants to add? Roll call. Brandy, please. Here. Reply. Yes. Yes. I'm sorry. It's been a long day and I Tate. Yes. Spire. Yes. Albe. Yes. Kakachek, yes. Kay's, yes. Darus Johnson, yes. Got tricky there. She's going back and forth. Yeah, I wasn't ready. Seven, yes. Zero, no. Motion passes unanimously uh for annexation. Now on to the zoning resolution, which is ordinance number 2026-04.

Entertain a motion. Second. Motion second. Further discussion regarding the zoning hearing. None. Brandy, please give us a roll call. Johnson, yes. Hayes, yeah. Yes. Albby, yes. Spire, yes. Tate, yes. Cohane,

seven, yes. Yes. Seven, yes. Zero, no. Motion passes unanimously. That brings us on to downtown overlay district. Randy, go ahead. Okay. So, this is a proposed ordinance amendment that ties into the variance request that we looked at at our last meeting on January 22nd. And to look at this as uh amending the ordinance and also just clarifying the ordinance. So the downtown overlay district was created in 2019 and there's there's some conflicting language in the ordinance of how it has been interpreted. So what I believe the intent is really that we are maintaining front-facing facads so that those are utilizing our list of encouraged materials. And you can see here the changes that were made. um actually tuck those encouraged and prohibited materials underneath that point because otherwise they were standalone and it didn't really specify what it applied to because then we also um had there's also this provision here under the building construction. So this is under building materials and then the building construction section explains how additions to principal structures which conform to the provisions of this chapter in all accessory buildings or structures shall be constructed of the same material as the principal building and shall be of the same architectural design and general appearance of the principal building. So that if you um recall for like the 19th hole that applied because it was already metal and then also if

you think about it that's not a front-facing facade actually because there's a property further to the north that is actually the frontage. So I think it's just something that the board should contemplate. And like I said, this ties into the previous request for the storage units in the rear of a property on the north side of First Avenue that had an existing shipping container located on the property and then wanted to bring in additional um and so I think this is and as we discussed and Commissioner Kay's brought up of bringing it forward as a legislative action of actually amending the ordinance so that the board can contemplate it. And so we are not um allowing we're not giving a variance to a actually prohibited material. So this is just bringing that forward to bring um to really just get it in front of you to get your thoughts on what you believe the intent of the ordinance should be and what do you think is appropriate. So, how it's presented, it would just make these encouraged and prohibited materials applicable to front-facing facades, not all sides.

So, I'll stand by for questions. Thank you. Does the commission have or any commissioners have any questions regarding No questions, but just thank you. Yes. Thank you, Brandy. Miss Hen. Okay. Well, we have a public hearing on this. I'm gonna open the public hearing. Does anyone want to talk about the downtown overlay district? You guys are kind of a quiet bunch tonight

sometimes. Yeah. Uh, anybody online that wants to talk about the downtown overlay district? Okay. Okay, I'm going to close public hearing and I'd ask for action on resolution number 2026-05 an amendment to the downtown overlay district. I'll make a motion to approve. Thank you, Dr. Johnson. Second. Thank you, Miss Tate. Uh we have a motion. Second. Further discussion regarding ordinance change, proposed ordinance change. Just a point of clarification, Mr. Chair.

Go ahead. So by taking this approach, would interotal storage containers then be allowed anywhere as long as they're not front facing to the downtown overlay district? That how you inter that's the interpretation moving forward. Correct. Okay. And a lot of downtown properties in the overlay district don't have there there's zero foot setbacks. So, a lot of properties are built out to their lot lines and then but you can see some areas where there might be some room in the rear where the alley is.

So, I think that this is an excellent amendment to the ordinance. I think there is a greater question that I would like to address is is simply do we want storage containers downtown or do we want to prohibit that? And I think that's different different day. That's a different day. But I think we should put that on our radar and talk about that because I think that that's a there's a genuine discussion about regardless of what the ordinance says about whether or not we want shipping containers downtown whether it's in the back or the front or the tide or on top. Okay. Yeah. But do you know though with this amendment like it would allow for for the time being until we discuss it? That's why I would like to discuss whether or not instead of kind of dancing around it

with with facade and material construction those kinds of things. I think it's a lot more simple. Do we want them here? And and maybe it's a little wider swath. Do we are we okay with them in the industrial area? Are we okay with them in north of First Avenue? Whatever. Yeah, we probably don't want them in R1 or two or three. Um and they can't. Yeah,

they can use them as long as they side them residentially and that they're equipped for our snow load. Um but no, it that's a valid point of how shipping containers are being used used as an accessory structure um to consider going forward. I think what would be helpful is staff could maybe do a evaluation of like the overlay district and see how many exist currently because they might be in areas that we aren't aware like that we don't see them or even like the one that sat behind the property that the variance was requested for. So staff will do that and

kind of take your lead on when you want us to bring something forward. Just have that like this is the initiation of planning commission for staff to look into this and then bring something. Thank you. Brand miss Hen any we've got a motion a second. Any further discussion regarding the uh amendment to the ordinance? I'm a little concerned now to vote yes on this because I absolutely do not want steel storage containers downtown. Sorry. Um so I'm I'm tend to agree with you, Miss Darus Johnson,

but that's why I would propose that we address it head on as opposed to How about if we make them both the same night? Don't know if we can do that without noticing it again. Oh yeah, we could renotice. So if I mean then that way at least we're protected until we do. I mean we don't know you know but Well, we have a motion in a second if you'd like to defer action to a definite time. Mr. Chair,

go ahead. I would make a substitute motion to defer action on resolution number 202605 until the next city the planning commission meeting March 6th. That correct Brandy? Yes. But I'm just wondering if it's easier if you just deny it and we'll do it again. Yeah, I guess there's nothing. We do it again instead of all the deferring and the tableling and we don't it's the city the city's bringing it forward. So I think that's probably more appropriate. Deny it. We'll do it again. I like that for minutes. Change order.

I would like to make a motion to approve because it's always we've already got the motions on the table so we just have to vote to Yeah. All right, Brandy. Roll call. A no would be to deny, right? Yep. Roll call. Okay. Dargas Johnson, no. Kicachek, no. Spire, yes. Cohane, no. Tate, no. Albby, no. Case, no.

All right. Uh 61. The motion fails and we will Yeah. Sorry. Sorry, Miss Han. All right. Uh now is the time for open public comment. So if you have something that's on the agenda that was not on the agenda that you'd like to address, take the floor. Mr. Van Dusen, please join us.

Mr. Chairman, members of the planning commission, thank you very much. Troy Van Dusen, uh, I am the chairman of the Cottington County Commission and I am also the liaison for the director of equalization office. I sat in the back of the room here this afternoon and I listened to your discussion on the tiffs and I want you to know that I will be taking that back to the county and we will address that. Okay, that's how we're going to get things done. We appreciate our partnership with the city and the the partnership that the city has with the with the county and uh we want to move this forward. So, um I will be reaching out to probably a couple of you um so that we can sit down and and have a meeting and discuss what we need to do to make that better. So, I just wanted to uh put that out there and thank you for your time tonight.

Thank you. Thank you, Commissioner Vendusen. And we appreciate your service in the county commission. perhaps the only less popular job than this one. Um that any other open public comment new business. So on Tuesday's council meeting, we had two new members um appointed by the mayor for to be alternates for the board of adjustment and planning commission. And that is Nicole Han Churnness Churnice. And then um Randy Tupper. My name is

And I Yeah. Turness. If you saw the spelling, you would understand the struggle. But um so yeah, and I don't know if if you guys want to give any introductory on yourselves. I did not prepare you with that. So otherwise we can wave. My time went around and said hi to everybody already. I think I I'm just excited.

I didn't have to uh introduce myself as I know each and every one of you as I was on for the uh the board years working with you. Thank you for all the work. Yes, they will be great additions. And as we have the full board, like I said, they they're currently appointed as alternates. And then as board members phase out, then we'll look if they have interest in being full members of the board. Todd, that's Todd and whoever else. You guys are gonna have to fight over it. Okay. Thank you guys.

No, thank you for your Thank you for your willingness to do it. It's an important job. Um, okay. Okay. Any other new business? Um, and then for the next planning commission and board of adjustment meeting, we will meet on Friday, March 6th instead of Thursday, March 5th. Um, and that is the normal time of 4 4:15 typically. So, what we're moving it one day to March March 6th at noon, we will provide lunch and there will be one item. Wonderful. Thank you. Two, one, two. There's going to be a couple items maybe. All right. Any other old business?

What do you mean? It was a Oh, I that might not be ready. Uh, any other new business? Any other new business? Any other old business? Good. All right. And no need for executive session. We are adjourned. Go home to your families, everyone. Oh, if you want to go to WDC, WBC ARP is sponsoring a walkability program uh during trivia. Should be really lightning. Thanks everybody.