Nov. 26—MITCHELL — A 48-unit apartment complex has received project approval from the city of Mitchell for a tax increment financing district.
The Golden Prairie Apartments will be located on the city’s south side, off South Capital Street, near Menards and just north of the Copper Flats Apartments that were approved for a TIF by the City Council earlier this year. The Mitchell City Council unanimously approved the TIF plan on Monday, November 18.
The total cost of the project is $12 million, according to the newspaper
project plan
presented to the council, accounting for approximately $1.7 million in TIF-eligible expenses. The developer, Sioux Falls-based Lloyd Companies, requested a refund of $1.61 million from the TIF revenue because that is the amount of property taxes the plan estimates will be generated from the TIF.
This TIF will act as a pass-through, meaning the increase will be passed on to the developer when generated as a grant. City Attorney Justin Johnson said that’s why it doesn’t count toward the city’s constitutional culpability and that the risk of the TIF lies with the recipient, not the city.
According to a revenue assumption and a feasibility study, the city’s estimated subsidy will be approximately $90,000 per year between 2026 and 2044.
The development includes two buildings with 24 apartments each. The apartment mix includes eight one-bedroom units, twelve two-bedroom units and four three-bedroom units.
“We think that with the soybean plant and the other housing shortages here, we can help the community get the workforce housing it needs,” said Kellan Erpenbach, who represented Lloyd at the Mitchell City Council meeting. “I think it will be a great culmination of the development there with South Point and Copper Flats and this project aims to hit the middle of where those two are from a leasing perspective and we’re excited about what the project could bring. “
Lloyd is also the developer behind the 35-unit Copper Flats complex and, in combination with the Golden Prairie plan, will bring 83 new apartments to the southern Mitchell area.
Erpenbach told the council the project will cost about $7 million. According to the project plan, construction of the apartments, which will be built in two buildings of 24 units each, is expected to take 13 months and be completed in the fall of 2025. A large part of the project costs is expected to consist of interest. accounts for approximately $5 million of the total cost estimate of $12 million.
The units will meet the state’s criteria for affordable housing rents. According to South Dakota Department of Revenue information released in 2024, which is based on the state’s median household income of $95,100, the limit for one-bedroom units is $1,522, for two-bedroom units $1,712 and for three-bedroom units $1,902. . The complex’s rents must be certified annually to the city and could be lower than those state thresholds.
This is Mitchell’s biggest year ever for TIF districts, with the Golden Prairie project being the eighth TIF approved by city leaders. All eight have been approved as pass-through TIFs.
According to City of Mitchell data, the city approved 28 tax increment financial districts from 1995 to 2023, and 15 remained active at the end of 2023. At that time, the city had approved $12.3 million in funding, which has generated $97.8 million in increased funding. estimated value in the city’s nearly three decades of TIF districts.
City leaders have defended TIF districts as one of the few options local governments have to boost economic development.
Steve Sibson, a Mitchell resident and critic of the city’s use of TIF districts, expressed concern that giving the incentives to a major Sioux Falls developer will “short-circuit” the city $90,000 over 20 years. .
“To say we would be short-changed would be misinformation,” Mitchell City Councilman Tim Goldammer responded. “Because if the TIF doesn’t go through and the project doesn’t go through, it will only be taxable on the land value and not on the housing that I think Mitchell needs.”
The parcel of land was recently appraised at $174,654, and Mitchell City Administrator Stephanie Ellwein noted that the projected appreciation of the property once the apartments are built is nearly $5.3 million.
