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Date
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September 24, 2007
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Agenda
Item No. 16 Roll
Call No. 07- Communication No. 07-574 Department: Larry Hulse, Community Development Director |
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AGENDA
HEADING:
Approval
of Sixty-nine (69) tax abatement applications for improvements to property completed
in 2007.
RECOMMENDATION:
Recommend
approval of the applications as provided by Iowa Law.
FISCAL
IMPACT:
Amount: Tax
abatement upon property with a claimed value of $8,451,238.50.
·
Taxes
are generated in the first year from the land value, but the improvement value
will be forth coming when the $8,451,238.50 comes on the tax rolls after
abatement ends.
ADDITIONAL
INFORMATION:
A total of 69 tax abatement applications are being submitted at this time with an estimated value by the applicants of $8,451,238.50. There were 39 applications for the construction of new single-family homes, apartments, and new businesses with an estimated value of $7,425,305 and 30 applications for improvements to existing structures with an estimated value of $1,025,933.50.
A total of 23 applicants chose Schedule
1 with an estimated value of $349,806. Schedule 1 is for
qualified residential property. Applicants receive an exemption from
the taxation on the actual value of improvements not to exceed
$20,000. The exemption period is ten years and the exemption amount
is 115% of the actual value added by improvements.
A total of 1 applicant chose Schedule
2 with an estimated value of $1,100,000. Schedule 2
is for all qualified real estate and will receive a partial exemption for ten
years. The exemption schedule is a declining schedule and starts
with the first year at 80% and ends in year ten at 20%.
No applicants chose Schedule 3. With
this schedule all qualified real estate is eligible to receive an exemption
from taxation on the actual value added by the improvements for three years.
This schedule also applies to commercial and industrial real estate is eligible
to receive an exemption from taxation on the actual value added by the
improvements for three years. This schedule also applies to commercial and
industrial property in specific areas.
A total of 7 applicants chose Schedule
4A with an estimated value of $1,191,900. Schedule
4A is for qualified real estate in specific areas generally located
downtown and near the downtown area. The exemption period is ten
years and the exemption amount is 100% of the actual value added by
improvements. Qualified real estate assessed as residential or
assessed as commercial consisting of three or more living quarters with at
least 75% of the space used residentially is eligible to receive an exemption
from taxation and the actual value added by the improvements.
A total of 38 applicants chose Schedule
4B with an estimated value of $5,809,532.50. Schedule
4B is for qualified real estate for the remainder of the City for a period
of five years. Qualified real estate assessed as residential or
commercial and consisting of three or more living quarters with at least
75% of the space used residentially is eligible to receive an exemption from
taxation on the actual value added by improvements. The exemption
amount is 100% of the actual value added by the improvements.
In order to receive tax abatement on a
property, the applicant must increase the value of residential property at
least 5% for residential or 15% for commercial and industrial property.
Cumulative Totals for 2007
Schedule
Count & Value
1 23 $349,806.00
2 1 $1,100,000.00
3 0 $0.00
4a 7 $1,191,900.00
4b 38 $5,809,532.50
Total 69 $8,451,238.50
The City approved tax abatement to
stimulate growth and expansion in the City and level the playing field with
areas outside the City. This program works well and retains and
attracts development to the City.
Improvements and new development aids the
City in attracting business and keeps people looking for properties in the city
rather than outside of it. Developers have identified tax abatement
as a big reason for attracting buyers to their units. The abatement
program has also aided in upgrading deteriorating property in the city by
providing an incentive to maintain and upgrade property.
PREVIOUS
COUNCIL ACTION(S):
Date:
September 10, 2007
Roll
Call Number: 07-1707
Action: Approving tax abatement application for
additional value added by improvements completed in 2003 for property at
Date: May 7, 2007
Roll Call Number: 07-919
Action: Approving Tax Abatement application for
additional value added by improvements completed in 2006, and denying
retro-active application for
Date:
April 23, 2007
Roll Call Number: 07-739
Action: Approving Tax Abatement application for the
additional value added by improvements at
BOARD/COMMISSION
ACTION(S): NONE
ANTICIPATED
ACTIONS AND FUTURE COMMITMENTS:
The
tax abatement program on new improvements currently ends on December 31, 2008,
unless the City Council extends the program beyond that date. Any application received by February 1, 2009,
and approved by the City Council will receive abatement for the number of years
applied for. It is anticipated that
there will be numerous submittals of tax abatement applications on a yearly
basis until the program ends.