HERMANN — Second-round and final approval to the issuance of Industrial Development bonds for a multi-family housing project could be given Monday night by the Hermann Board of Aldermen.

Developer ELS of Hermann would use up to $4 million of Industrial Development Authority bond revenue to construct the housing units on a site along West 6th Street not far from Hermann Elementary School. The housing project would be located on the site of a former mobile home park.

First-round approval was given — without comment — at the board’s second regular session in August.

Referred to as “Chapter 100” bonds, named after the particular section of state law that authorizes the financing tool, the funding method typically finances such projects as industrial parks, warehouses, manufacturing facilities and similar projects. A Missouri Attorney General’s Office opinion several decades ago held that multi-family housing units built as a for-profit development qualified as a commercial enterprise and therefor are eligible to be financed by IDA bonds.

The developer, ELS of Hermann LLC, projects using about $3.9 million for the project.

A key factor in the use of industrial revenue bonds, in this case, is that approval by the city includes a tax abatement of 50 percent of the property taxes that would be generated by the development going to the various tax-supported public agencies, such as the city, the local school district, county government and other political subdivisions that levy a property tax. However, the exception to this is the Hermann Area Ambulance District, which will receive the full 100-percent amount that will be coming to it.

The tax abatement will last for 10 years, beginning next year and running through 2035. The Board of Aldermen meets at 7 Monday night in City Hall.