Two months after the council approved the TIF, staff told the developer the number doesn't hold up.
On May 18, 2026 the council approved a $1,855,000 tax increment request that its own advisor had put at $800,000. On July 14 the city attorney reported that he, the administrator and the advisor had told the developer the number "exceeds what the qualified costs and projected increment support."
Tax increment financing pays a developer back out of the new property taxes a project creates. The city's job is to decide how much of that future tax to hand over, and Kenyon retains Northland Securities to work that out. For the Sunset Home apartments, Northland's number was $800,000. The developer, Rebound, asked for $1,855,000 over 26 years. On May 18, 2026, on a motion by Lee Sjolander seconded by Kim Helgeson, the council approved the developer's figure 5-0-0.
What happened next
On June 30 the council adopted the development district and the TIF district, Resolution 2026-18, "with the development contract removed from the resolution." The contract is where the dollar amount lives. Two weeks later, on July 14, City Attorney Scott Riggs explained why it had been removed.
Riggs, Lehner, and financial advisor Tammy of Northland have told the developer the amount they are asking for exceeds what the qualified costs and projected increment support.Transcript page, July 14, 2026, 32:04.
Riggs had reached the developer's attorney at 5:02 p.m. that day, two hours before the meeting, which is why the resolution came late. Both attorneys had agreed the city should approve two standard documents: the contract for private development, which sets the terms of assistance and a pay-as-you-go tax increment note, and a subgrant agreement passing through a state grant the city had already executed. "The contract carries the city's number, not the developer's."
The recommendation was to approve both, with authority for City Administrator Scott Lehner, guided by Riggs and Northland, to adjust figures if the developer justified additional costs 34:10. A council member asked whether the amount could exceed what the council authorized when it approved the district. Riggs said no. Approving that night let the developer sign as soon as Friday rather than waiting for August.
Approve first, underwrite second
Read in order, the record shows a number adopted in May, a district built around it in June, and a walk-back negotiated with the developer's lawyer on the afternoon of July 14. The city's own policy requires a "but for" finding and independent underwriting paid for by the developer. The underwriting existed in May; it said $800,000. The council chose $1,855,000 anyway, and staff spent the next two months bringing the developer down toward what the underwriting supported.
The same July 14 meeting brought a plat application for the land side of the project showing two more units than earlier plans, to return as a separate development agreement 36:07. A council member asked whether the developer could be required to clean up the site. Lehner reported that the mattresses, box springs and furniture along the property were gone as of that day, that he had connected the developer with Flom Disposal, and that a no-dumping sign and a camera were promised.
Attorney Riggs stated that two public hearings were held and the TIF District for Kenyon Crossings was already adopted. He recommended approval of the agreements and contracts to keep the project moving forward.Official minutes, July 14, 2026, source
What the developer still needed
On August 6 Lehner reported on Rebound's investor meeting the night before. The project is about $8 million. Funding includes a $180,000 state grant, the TIF district and a secured loan of about $4.5 million; Rebound is seeking roughly $3 million from local investors, "including people who might commit retirement funds" 17:12. Asked whether the project proceeds without the $3 million, Lehner 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.
By September 8 the contract for private development, the subgrant agreement and a developers agreement were on the agenda as Resolution 2026-33, alongside the preliminary plat and three variances for parking, density and setback. The city's number was in the contract. The gap between what the council voted for in May and what its own advisor, attorney and administrator could defend in July was the developer's problem to close, and the record does not say how it closed.
Before and after
- May 18, 2026Council approves Rebound's $1.855 million over 26 years; Northland had recommended $800,000.
- June 30, 2026Resolution 2026-18 adopted "removing the development contract," the document that carries the dollar amount.
- July 14, 2026, 5:02 p.m.The city attorney reaches the developer's attorney; the resolution reaches the council late.
- July 14, 2026, 32 minutes into the meetingRiggs tells the council the developer's ask "exceeds what the qualified costs and projected increment support." Resolution 2026-24 passes 4-0-0.
- Aug. 6, 2026The administrator reports Rebound needs about $3 million from local investors and "may not move forward."
- Sept. 8, 2026Resolution 2026-33, the contract, subgrant and developers agreement, goes on the agenda with the preliminary plat and three variances.
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.
People in this story
- Scott RiggsCity attorney, Kennedy & Graven
- Scott LehnerCity administrator since December 2024
- Tammy, Northland SecuritiesThe city's TIF advisor, by Zoom on May 18 and June 30, 2026
- Mary BaileyCouncil member, acting mayor on Aug. 6, 2026, and EDA board member
- Deanna GardCouncil member, appointed April 14, 2026
- Alex BaraniakRebound, the developer
Sources
- Minutes, May 18, 2026 and June 30, 2026.
- City of Kenyon recording, July 14, 2026, at 32:04, 34:10, 36:07; meeting page.
- City of Kenyon recording, August 6, 2026, at 17:12 and 18:50.
- Council packet, September 8, 2026: Resolutions 2026-25 through 2026-28 and 2026-33.
More from the record
Abdo's manager, on the record: the fire levy line is wrong and our invoices were coded to the wrong department.
A council member asked what a contract costs. Lehner said that's a closed meeting. The statute says it isn't.
Lehner called it "a wash" before anyone pulled the ledger. The ledger disagreed.
All 27, in order · The open letter · Every packet and recording