The city council increased its TIF agreement with the five-story, 130-unit Emery Apartments at Eighth Street South and I-94 to help offset the increasing cost of building materials.
city council
Nancy Edmonds Hanson
With the price of construction materials soaring, the Moorhead City Council has stepped in to help carry on with plans for a major residential and commercial development in south Moorhead.
The council agreed with a recommendation by the city’s Economic Development Authority Monday to increase the tax increment financing (TIF) for the Emery Apartments, a $20 million, five-story apartment building that has just gotten underway in the southeast corner of Eighth Street South and Interstate 94. The master agreement signed in March designated a 16-year tax abatement expected to total $2.8 million. The revised agreement sets the maximum amount at $3.3 million and the term at 18 years.
Economic development consultant Derrick LaPoint recommended the increase due to rising costs due to the effects of the Covid-19 pandemic, which have dramatically boosted prices. “It has increased the cost by more than $2 million in construction materials alone,” he told council members. “This TIF amendment is an opportunity to help move a major project forward.”
Brian Bochman of the Fargo-based Enclave Companies concurred: “This has been extremely challenging from a materials standpoint.” When the original bids came in high several months ago, his firm spent three weeks looking for ways to reduce the project’s cost. “We found $300,00 in savings,: he reported. “But during the same period, costs went up $800,000,” he reported.
After its vote, he told the council, “It has been great to work with Derrick and Dan (Mahli, city manager). They have been amazingly supportive and creative.”
The Emery Apartments project qualifies for the TIF program in part because more than 40% of its units will be reserved as “affordable housing” for tenants earning no more than 60% of the area’s median household income, pegged at $60,677 by DataUSA – or about $36,000 for qualified renters. LaPoint noted that another benefit of the amended agreement is that the affordability commitment, expected to include 52 units, will also extend two years longer than under the original deal.
Bochman also left the council with a “tease.” Plans for the project’s commercial component next door are also moving forward after last year’s pandemic-related delays. “We’ll be working on the remodel in July,” he said, “and we’ll be back to you with an update in July.”
