The city's own advisor said $800,000. The council gave the developer $1,855,000 and asked questions later.
The city's own financial advisor put the Sunset Home apartments' tax increment at $800,000. The developer asked for $1,855,000. On May 18, 2026 the council gave the developer's number, 5-0, and the underwriting came afterward.
The Kenyon Sunset Home closed in August 2023 and its building at 127 Gunderson Boulevard went to auction. Rebound, the developer that bought it in 2024, proposes 36 to 38 apartments on the site, a project of about $8 million. To make it work the developer asked the city for tax increment financing, which lets new property taxes from the project be routed back to the developer for a period of years instead of to the city, the county and the school.
Cities do not set that number by feel. Kenyon's own TIF policy requires a "but for" finding and independent underwriting paid for by the developer, and the city retains Northland Securities to do the underwriting. On May 18, 2026 Northland's analyst, participating by Zoom, walked the council through how the financing would work and what the numbers supported.
Two numbers, one vote
Northland is recommending $800,000 in TIF assistance.Minutes of the special meeting, May 18, 2026. Meeting page.
Rebound asked for $1,855,000 over 26 years. Brett Reese reviewed the timeline since the 2024 purchase and Alex Baraniak described the housing, with construction to finish in 2027. City Administrator Scott Lehner recapped the presentation and explained why the meeting had been called. Then, on a motion by Lee Sjolander seconded by Kim Helgeson, the council voted 5-0-0 to approve "Rebound's proposed TIF amount of $1.855 million for 26 years." The advisor's figure was on the table and the vote went to the developer's, more than twice as large, with a public hearing set for June 9.
The same meeting handled Mary Bailey's resignation. On the city attorney's advice she resigned effective immediately and was reappointed until the November election so the seat could go on the ballot. That housekeeping took a resolution. The $1,055,000 gap between the two TIF numbers took a voice vote.
The framework, without the contract
On June 30 the council held the public hearing and adopted Resolution 2026-18 establishing Municipal Development District No. 2 and Tax Increment Financing District No. 2-1, but "with the development contract removed from the resolution." The mayor's one question at the hearing was what share of the units would be Section 8. Baraniak said the intention was zero. The hearing lasted three minutes.
By July 14 the position had shifted. City Attorney Scott Riggs told the council that he, Lehner and Northland "have told the developer the amount they are asking for exceeds what the qualified costs and projected increment support" 32:04. He had reached the developer's attorney at 5:02 p.m. that day, which is why the resolution arrived late. The contract for private development the council then approved "carries the city's number, not the developer's," with authority for Lehner, guided by Riggs and Northland, to adjust figures if the developer justified additional costs 34:10. Asked whether the amount could exceed what the council had authorized, Riggs said no.
Alex Baraniak of Rebound stated that their intention would be zero Section 8 apartments.Minutes of the June 30, 2026 public hearing, source
What the developer said in August
On August 6 Lehner reported on Rebound's investor meeting the night before. The project needs about $3 million from local investors on top of a $180,000 state grant, the TIF district and a secured loan of about $4.5 million 17:12. Asked whether the project proceeds without the $3 million, he relayed Rebound's words: it may not move forward. Demolition with asbestos abatement had been quoted at $464,000, a figure Lehner said he heard for the first time that night 18:50.
The sequence is the point. The council approved the developer's number in May, the district in June, and learned in July that staff and the advisor had gone back to the developer because the number did not hold up. The cost of demolition, the largest single site cost, reached the administrator in August. In a town of 1,894 people with about eight buildable lots, the one housing project underway was underwritten after it was approved, not before.
Before and after
- Aug. 30, 2023Kenyon Sunset Home closes; the building at 127 Gunderson Boulevard goes to auction.
- 2024Rebound buys the property and proposes 36 to 38 apartments, a project of about $8 million.
- May 18, 2026Northland recommends $800,000; the council approves Rebound's $1.855 million for 26 years, 5-0-0.
- June 30, 2026After a three-minute hearing the council adopts Resolution 2026-18 "removing the development contract."
- July 14, 2026The city attorney reports that staff and Northland have told the developer its number exceeds what the costs and increment support.
- Aug. 6, 2026The administrator reports Rebound still needs about $3 million from local investors and "may not move forward" without it.
- Sept. 8, 2026Resolution 2026-33, the contract for private development and related agreements, is on the agenda.
What the statute says
the proposed development or redevelopment would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future
This is the "but for" finding a city must make in writing before approving a TIF plan; the size of the assistance is supposed to follow from it.
The council shall have full authority over the financial affairs of the city, and shall provide for the collection of all revenues and other assets, the auditing and settlement of accounts, and the safekeeping and disbursement of public money.
The numbers are the council's responsibility by statute, not the administrator's and not a vendor's.
People in this story
- Lee SjolanderCouncil member and former Kenyon police chief
- Kim HelgesonCouncil member
- Scott LehnerCity administrator since December 2024
- Scott RiggsCity attorney, Kennedy & Graven
- Tammy, Northland SecuritiesThe city's TIF advisor, by Zoom on May 18 and June 30, 2026
- Brett ReeseRebound, the developer
Sources
- Minutes, special meeting, May 18, 2026: Northland recommendation of $800,000; motion Sjolander/Helgeson approving $1.855 million for 26 years, 5-0-0.
- Minutes, special meeting, June 30, 2026: Resolution 2026-18 with the development contract removed.
- City of Kenyon recording, July 14, 2026, at 32:04 and 34:10; meeting page.
- City of Kenyon recording, August 6, 2026, at 17:12 and 18:50; meeting page.
- Council packet, September 8, 2026: Resolution 2026-33, contract for private development.
More from the record
Your electric bill rises 27.6 percent over five years. It passed on consent, no discussion, and no minutes are posted.
Lehner called it "a wash" before anyone pulled the ledger. The ledger disagreed.
Lehner noticed a closed meeting. The city attorney opened it back up: there was nothing to close.
All 27, in order · The open letter · Every packet and recording