By Travis Gulbrandson
The Vermillion City Council has granted a reduction in fees to a company that wants to build a 40-unit apartment complex at the corner of Madison and Norbeck streets.
Haan Development needed the reduction in the building permit, water tap and sanitary sewer fees so it would qualify for a share of federal tax credits from the South Dakota Housing Development Authority.
The action was taken at the council’s regular meeting on Monday, Nov. 18.
“The federal government grants each state so much with respect to federal tax credits in the state, and then has a rewards program,” said city manager John Prescott.
Haan Development applied for the program in the spring, but was unsuccessful.
According to a memo given to the city council members, the apartment complex would consist of five buildings, with eight apartments each.
“There would be 25 two-bedroom units of 900 square feet and 15 three-bedroom units of 1,100 square feet,” the memo read.
Building permits for the structures are estimated at $1,415 each, 4-inch water taps at $1,250 and 6-inch sanitary sewer taps at $235.
For five buildings, the total amount potentially forgiven by the city would be $14,500.
“With this tax credit program, these (units) would be for individuals that have qualifying incomes of 30 to 60 percent of the adjusted median income for Clay County,” Prescott said. “For this project to receive tax credits, they plan to maintain the status for the first 40 years of the complex.
“At that point in time, the tax credit benefit that they would have received would have expired,” Prescott said.
In addition to the cost waivers, the city also will be giving a letter of support to the project.
While the first is a condition of the tax credit program, the second will help Haan Development “score points,” Prescott said.
“This is a competitive process,” he said. “There’s a 1,000-point scale that’s utilized, and if they can demonstrate some local financial support of the project, that could entitle them to 25 points.”
As per the motion of the city council, the project will receive the waivers if it is awarded the tax credits and a request for a building permit to construct the complex is made prior to Dec. 31, 2014.
Haan Development will hear of the results of its application some time in the spring, Prescott said.