Third Ward Condos Will Fund Affordable Housing
Riverwalk TIF district has been a gift to the city's bottom line.
Third Ward Condos. Photo taken April 28, 2025 by Jeramey Jannene. All Rights Reserved.
A tax incremental financing (TIF) district created in 2004 to fund the riverwalk system’s extension into the southern edge of the Historic Third Ward has been a financial bonanza for the city.
As of 2025, the Third Ward district has generated $77 million in incremental property tax revenue from the four properties located within it: the attached Hansen’s Landing and Harbor Front Condominiums developments, the DoMUS apartments and the Marine Terminal Lofts condominiums. The Hansen’s Landing and Harbor Front properties, when viewed as one combined entity, are the most valuable residential complex in the city.
For the second time in its history, the overperforming district is being tapped to pay down debt associated with other TIF districts.
The latest amendment to the district would see $2.8 million in property tax revenue used to pay down debt associated with two affordable projects that are underperforming initial expectations.
The move would create future flexibility for the two TIF districts used to support the development of the McKinley School Lofts and the combined Garfield School and The Griot apartment projects. The move would potentially free up funding years in the future for nearby public infrastructure improvements within a half-mile of both districts.
Both of the affordable housing districts are currently “struggling a bit to pay off their project costs,” said Alyssa Remington, Department of City Development project manager. Affordable housing projects, because of rent restrictions, often do not generate substantial assessments and therefore generate less property tax revenue. The McKinley School project involved the additional development of four market-rate homes during the COVID-19 pandemic, but the TIF subsidy was negated by a surge in construction costs.
At the end of 2024, the most recent year for which project summaries are posted, the two TIF districts were declared “on schedule” and “within budget.” But each was short of its planned payback by more than $100,000, with more than a decade to go. On Tuesday, Remington said both projects were generating incremental tax revenue, but not enough to retire associated debt within the 27-year payback period.
An engine of progress
The Third Ward TIF district, Erie Jefferson (#56), has been amended seven previous times to fund nearby public infrastructure.
“This is a really good example of how TID financing is an incredible tool,” said area Alderman Robert Bauman to the Zoning, Neighborhoods & Development Committee. “This has been an engine of progress and an engine of investment.”
In addition to the Riverwalk, the Erie/Jefferson TIF district (#56) has been used to fund Erie Street Plaza, partial construction of The Hop, repaving several streets, Trestle Park, the construction of an E. Corcoran Avenue intersection, the pending reconstruction of N. Water Street, and a protected bike lane under construction on N. Jefferson Street. State law allows districts to fund public improvements within a half-mile of their borders.
The district also previously was tapped to pay down $12 million in debt associated with three underperforming neighborhood improvement TIF districts: 20th and Walnut (#58), 20th and Brown (#65) and Metcalfe Park (#66).
But the engine of progress is coming to an end.
The TIF district must be closed by 2031. After September, said Remington, state law prohibits adding new projects. Before closing the district, the city will, however, be able to capture one year’s incremental tax revenue — $6.1 million in 2025 — and dedicate it to citywide affordable housing efforts.
After the TIF district is closed, the revenue will flow to the city and other property-taxing entities’ general funds. Closure results in a reduction of the property tax burden for other properties, but does not increase the amount of money that is able to be collected.
The committee unanimously endorsed the TIF amendment. The full council will review the amendment on Tuesday.
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