Council establishes municipal development district and TIF for Lincoln Apartments project

The Detroit Lakes City Council voted April 20 to establish Municipal Development District No. 1 and to adopt Tax Increment Financing District 1‑1 to support redevelopment of the vacant Lincoln School into a roughly 35‑unit apartment complex with underground parking.

Todd Hagen of Ellers and Associates summarized the statutorily required steps, public notices, and the streamlined approach the city will use to create a city‑wide municipal development district that can host future tax increment financing (TIF) districts. Todd said the approach eliminates a second public hearing step for future TIFs and gives the city more flexibility to pool increment for eligible projects.

Developer Chelsea Mankey of Circle North Properties described the Lincoln project: an 8‑unit conversion of the existing school plus 27 units in an attached new building, indoor recreation space and 35 underground parking stalls. Mankey said the project is locally led and locally financed where possible, but that without TIFF support the financial model shows an eight‑year negative cash flow.

"The project is not feasible fiscally — it has an eight‑year negative cash flow projection without the TIF support," Mankey said, asking the council to adopt the TIF plan so she can finalize financing. The council unanimously approved the municipal development district, the TIF plan and authorized an interfund loan; detailed development and financing terms will be finalized in a later development agreement.

What happens next: staff and the developer will finish the development agreement and present final TIF term lengths and financial exhibits in a future meeting before TIF reimbursements or other incentives begin to flow.