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City of Aberdeen – Notice of Resolution No. 25-04-02R

By Aberdeen Insider  -    April 24, 2025 in Legals   Reading Time: 6 minutes

CITY OF ABERDEEN

RESOLUTION NUMBER 25-04-02R

RESOLUTION CREATING TAX INCREMENT FINANCING

DISTRICT NUMBER 44 FOR AFFORDABLE HOUSING

WHEREAS, a public hearing was held before the Planning Commission of the City of Aberdeen, South Dakota, on April 15, 2025, at 7:00 p.m., in Council Chambers in the Municipal Building, 123 South Lincoln Street, Aberdeen, South Dakota, pursuant to notice of such hearing, for the purpose of considering the creation of Tax Increment Financing District Number 44 (hereafter “TIF 44”) and its proposed boundaries, such public hearing also being the time and place for its regular meeting; and

WHEREAS, the Planning Commission at such regular meeting established the boundaries of TIF 44 and recommended the City Council of the City of Aberdeen, South Dakota, create TIF 44; and

WHEREAS, the Planning Commission at such regular meeting recommended to the City Council that it approve and adopt the Project Plan; and

WHEREAS, such action by the Planning Commission was done in accordance with SDCL Chapter 11-9 at a regular meeting of the said Planning Commission after notice properly given and after due hearing and being appropriately and properly advised.

NOW, THEREFORE, BE IT RESOLVED by the City Council of Aberdeen, South Dakota, as follows:

  1. District Name.  TIF 44 shall be named and designated as “Tax Increment Financing District Number 44, City of Aberdeen, South Dakota.”
  2. District Necessity.  Pursuant to SDCL §§ 11-9-4, 11-9-8, and 13-13-10.9 the City Council hereby declares the necessity to form TIF 44 in the City of Aberdeen and finds that not less than twenty-five percent, by area, of the real property within TIF 44 is blighted as such area substantially impairs or arrests the sound growth of the City of Aberdeen, inhibits housing development, and constitutes an economic or social liability due to a predominance of open space with obsolete platting and diversity of ownership.  Affordable housing will stimulate and develop the general economic welfare and prosperity of the City of Aberdeen and State of South Dakota, will enhance the area, and will improve the tax base of the City of Aberdeen.  The improvement of the area is likely to enhance significantly the value of substantially all other real property within TIF 44 and immediately adjacent thereto.
  3. District Boundaries.  The boundaries of TIF 44 shall be and the same are hereby designated to include:
  • Lots One (1), Two (2), Three (3), Four (4), Five (5), Six (6), Seven (7), and Eight (8) HAPI Northeast Infill Addition to The City of Aberdeen, In the SW¼ of Section 6-T123N-R63W Of The 5thM., Brown County, South Dakota;
  • Lots Twelve (12), Thirteen (13), Fourteen (14) Gugel’s Second Subdivision In the SW¼ of S6-T123N-R63W of the 5thM., Brown County, South Dakota;
  • Lot One (1) Holgate Pond Addition to the City of Aberdeen in the NW¼ of Section 7-T123N-R63W of the 5thM., Brown County, South Dakota;
  • Aberdeen Independent School District No. 32, Outlot 1 In the NW¼ of Section 7-T123N-R63W of the 5thM., Brown County, South Dakota; and
  • Lots Eleven (11), Twelve (12), and Thirteen (13) Block 19, Eighteenth Addition of Highland North Addition to the City of Aberdeen, Brown County, South Dakota, according to the recorded plat thereof.
  1. Creation and Conditions.  TIF 44 is hereby created as an affordable housing tax increment financing district as defined at SDCL § 13-13-10.9 with an effective date of April 21, 2025, and upon the following conditions:

(a)       Term of District.  The term of TIF 44 shall be twenty (20) years from the date of the creation of TIF 44, therefore, positive tax increments may not be allocated to the City longer than twenty (20) years after the calendar year of creation of TIF 44.

(b)       Affordable Housing.  Developer intends to construct new residential housing  on the eleven lots owned by it within the District described as:

  • Lots One (1), Two (2), Three (3), Four (4), Five (5), Six (6), Seven (7), and Eight (8) HAPI Northeast Infill Addition to The City of Aberdeen, In the SW ¼ of Section 6-T123N-R63W Of The 5thM., Brown County, South Dakota, and
  • Lots Eleven (11), Twelve (12), and Thirteen (13) Block 19, Eighteenth Addition of Highland North Addition to the City of Aberdeen, Brown County, South Dakota, according to the recorded plat thereof.

In compliance with SDCL §13-13-10.10, Developer shall require the original selling price of every new house constructed by Developer on the eleven lots to be at or below the first-time homebuyer purchase price limit being used by the South Dakota Housing Development Authority as of the date the house is sold.

(c)       Payment of Project Costs. 

(1)       Project costs in the amount of $554,883, plus simple interest at five and one-half percent (5.5%) per year, are eligible for reimbursement by the City from positive tax increments.

(2)       No project cost incurred after five (5) years following the creation of TIF 44 may be paid from positive tax increments unless an amendment to the Project Plan is adopted.

(3)       All outstanding indebtedness for project costs financed by Homes Are Possible, Inc. (the Owner and Developer of land which has been designated the “HAPI Affordable Housing Development”), and its successors and assigns, shall be paid or retired no later than the term of TIF 44.

(4)       Developer may not finance the Project through tax increment revenue bonds.

(5)       Reimbursement of Developer’s project costs or payments to holders of indebtedness issued to pay project costs shall be made solely from the special fund for TIF 44 created under SDCL § 11-9-31. Each instrument of indebtedness shall contain such recitals as are necessary to show that the instrument is only so payable and that the instrument does not constitute a general indebtedness of the City or a charge against its general taxing power. TIF 44 will be designated as an Annual Appropriations TIF to ensure that it does not count against constitutional debt.

(6)       City, unless otherwise instructed by Developer in writing in its sole discretion may prioritize payments from the special fund to one lender over any other and may allocate payments among lenders on other than a pro rata basis.

(d)       No Claim to Discretionary Formula.   Developer will not claim any portion of the discretionary formula of all of the assessed valuation for tax purposes for the applicable period following its construction of new residential housing on any of the eleven lots identified in paragraph 4(b).

(e)      No Remittance Upon Default or Termination.  No Tax Increment Revenues for reimbursement of eligible project costs will be remitted by the City to Developer or to holders of indebtedness issued to pay for project costs if Developer is in default of the Tax Increment Financing District Number 44 Development Agreement as fully-executed by and between Developer and the City of Aberdeen (hereafter the “Development Agreement”) or if TIF 44 is otherwise terminated as set forth in paragraph 8.

  1. Project Plan.  Pursuant to SDCL 11-9-13, the Project Plan submitted by the developer includes information satisfying each of the requirements contained therein.  Pursuant to SDCL 11-9-16, the Project Plan includes information satisfying each of the six requirements contained therein.  The Project Plan is feasible and in conformity with the master plan of the City.  Except as otherwise amended by this Resolution, the Project Plan shall be and the same is hereby approved and adopted.
  2. Development Agreement.  The Development Agreement shall specify the conditions for development of the owner’s property in TIF 44 and for financing and payment of the project costs, except that no tax increment bonds may be issued.  The Development Agreement when fully-executed shall be expressly incorporated herein and adopted by reference.  The Development Agreement may be amended from time to time by mutual agreement of the parties.
  3. Aggregate Valuation.  The aggregate assessed valuation of the taxable property in TIF 44 plus the tax increment base of all other existing tax increment financing districts does not exceed 10% of the total assessed value of taxable property in the City of Aberdeen, South Dakota.
  4. General Conditions for Termination of District.  The Council, by resolution, shall dissolve and terminate TIF 44 upon the earliest date of any of the following occurrences:

(a)       Positive tax increments are no longer allocable to TIF 44.

 

(b)       Payment, or provision for payment, of all project costs and grants of TIF 44 have been made.

(c)       Developer is in default of the Development Agreement and fails to cure such default within the time specified therein or as determined by the Council.

(d)       Developer fails to comply with the requirements of state law for an affordable housing tax increment financing district.

  1. Execution of Documents.  The City Manager and Finance Officer are authorized to execute those documents necessary to create and certify TIF 44 as of the effective date of its creation.  The City Manager is authorized to finalize the execution of the Development Agreement and to enter into such amendments thereto from time to time as the City Manager determines to be in the best interests of the City of Aberdeen.
  2.        Acceptance by Developer.  Developer may accept this Resolution by executing and acknowledging the same within 20 days of the date of adoption of this Resolution.  Upon timely acceptance of this Resolution, Developer shall be bound by all terms and conditions contained herein.  If Developer timely accepts this Resolution, it shall become effective 20 days after the completed publication, unless the referendum is invoked.
  3. Severability.  The provisions of this Resolution are severable.  If any provision of this Resolution or the application thereof to any person or circumstance is held to be invalid, such invalidity shall not affect other provisions or applications of this Resolution which can be given effect without the invalid provision or application.

The foregoing Resolution was considered at a regular meeting of the Aberdeen City Council on the 21st day of April, 2025, and upon Roll Call vote the Resolution was passed after one reading and adopted. Number of AYES: 7, Number of NAYS: 0, Members abstaining: 1, /s/ Travis Schaunaman, Mayor, ATTEST: /s/ Jordan McQuillen, Finance Officer

Published once on April 24, 2025, at the total approximate cost of $100.80 and may be viewed free of charge at www.sdpublicnotices.com and www.aberdeeninsider.com