The city of North Branch is moving forward with drafting a housing assistance policy.

During the North Branch City Council meeting Feb. 9, the council approved hiring Ehler’s for the development of a housing assistance policy at a cost not to exceed $4,650.

City Administrator Renae Fry said following the previous council meeting, city staff reached out to Ehler’s and asked them to put together a proposal to assist the council in developing and drafting a business subsidy policy for review and potential approval.

In their proposal letter to the city, Ehler’s stated, “It is our understanding that the council and EDA wish to develop a businesses assistance policy that is specific to housing projects and would specify if and/or when city assistance such as tax increment financing, tax abatement or fee reductions would be provided to a housing development.”

Fry said the work Ehler’s is proposing to provide will be beneficial to the city.

“They didn’t believe that a full-on housing study was needed, but they did agree with staff that some type of inventory that updates what Maxfield’s showed as a need back in 2018 when the plan was adopted versus the number of housing units that have since been constructed would be important, because it might help the council to target or identify the style of housing perhaps that you believe is still of value to the community that might require public subsidy,” Fry said.

Fry said city staff felt the scope of work and fees presented by Ehler’s is appropriate and the work is proposed to be completed in eight weeks.

The first step in the process would be Ehler’s facilitating a goal-setting session with the council and Economic Development Authority that builds off of the work done by the housing subsidy task force last fall. The second step would be Ehler’s drafting a housing assistance policy that incorporates the specific policy goals identified by the council and EDA for consideration and adoption.

“I’m thrilled that we’re moving so quickly on this project, so thank you for all your hard work,” Council Member Kelly Neider said.

Council Member Amanda Darwin said the proposal will be a good investment for the city.

“I just want to say that I think this is a really smart investment for our community in making a nice, solid policy with also learning more about that inventory of our community before making decisions that affect this community long after we’re up here,” Darwin said. “While the expense is there, I think it’s a reasonable investment by a great company. I love just even this slice of their preparation, so I’m excited about it.”

Falcon Ridge request

Fry explained housing developer INH and commercial developer BJ Baas Builders are interested in developing a site at the corner of Falcon Avenue and Highway 95. INH needs to know if the council will consider an application for housing subsidy in the form of tax increment financing. Fry said, specifically, they seek support in advance of submitting their application for a TIF subsidy for a term of 26 years with 100% of the eligible increment being refunded to the developer on a pay/go basis to support their proposed 200-unit apartment complex.

Fry said the council needs to decide if it will accept an application for a housing subsidy policy in the absence of an adopted and implemented housing assistance policy.

Following the discussion, the council approved a motion that it will not entertain or accept any applications for housing subsidy until such time as a formal housing subsidy policy is adopted and implemented.

North Branch Mayor Jim Swenson said the council talked about this issue at a work session last week.

“Last week we just had a brand-new development coming into our community. They asked for no assistance whatsoever,” Swenson said. “We had the presentation here two weeks ago and they gave us a deadline of until the 12th of February. I asked the question, if the businesses were coming into the community, if they were going to help to bring in these companies and if they had any promise that they were going to bring them, and they could not give me an answer yes. So to give a 26-year TIF to a developer without us finishing this report would be fiscally irresponsible of this council. We were elected by this community to make the right decision and I feel very strongly that we are. And once we get this study completed, if this company still wants to come back and visit with it again, we will definitely be open to it.”

Darwin said she would like the city to have the policy in place first.

“I do not feel that that would be fiscally responsible,” Darwin said. “I’d rather develop a policy first and then see if the project happens to fall into that policy.”

Neider said she would encourage the developer to come back to the council after the housing assistance policy is in place.

“I don’t like feeling rushed into anything and this seems just a little bit presumptuous prior to a subsidy plan in place,” Neider said. “In the event that this builder would like to move forward once that becomes part of the record, then I’d encourage him to do that. But at this time I think it’s far to premature.”

Council Member Patrick Meacham said the city needs to remain business-friendly, but the housing assistance policy needs to be in place first before the council would consider granting a TIF subsidy.

“It’s a tough one, because, I mean, we had a nice presentation and anytime that you’re talking about three apartments and a commercial building coming into town, I mean, you always want to jump on that,” Meacham said. “But not to beat a dead horse, that is a huge investment of not only land, tax dollars, and like Councilwoman Darwin said, for potentially 26 years. At this point in time, without seeing more information or a report from Ehler’s, or having a TIF policy, I would not be in favor of it.”

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