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Date
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December 17, 2007
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Agenda
Item No. 14 Roll
Call No. 07- Communication No. 07-732 Department: Larry Hulse, Community Development Director |
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AGENDA
HEADING:
Approval of Forty-Four
(44) tax abatement applications for improvements to property completed in 2007.
RECOMMENDATION:
Recommend approval of 44 tax abatement applications with an estimated value by the applicants of $5,112,947. There were 15 applications for the construction of new single-family homes, apartments, and new businesses with an estimated value of $3,854,217 and 29 applications for improvements to existing structures with an estimated value of $1,258,730.
FISCAL
IMPACT:
Amount: $5,112,947 in
forthcoming taxable value.
Funding
Source: Taxes are
generated in the first year from the land value, but the improvement value will
be forthcoming when the $5.1 million comes on the tax rolls after abatement
ends.
ADDITIONAL
INFORMATION:
A
total of 22 applicants chose Schedule 1 with an
estimated value of $458,120. 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.
One
applicant chose Schedule 2 with an estimated value
of $900,000. 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%.
A
total of 2 applicants chose Schedule 3 with an
estimated value of $892,500. 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 property in specific areas.
A
total of 7 applicants chose Schedule 4A with an
estimated value of $1,297,080. 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 12 applicants chose Schedule 4B with an
estimated value of $1,565,247. 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 93 $1,596,825.78
2 3 $2,735,000.00
3 3 $8,392,500.00
4a 37 $18,903,578.50
4b 118 $19,858,792.50
Total 229 $51,486,696.78
The
City approved tax abatement to stimulate growth and expansion in the City and
level the playing field with areas outside the City. Developers have
identified tax abatement as a primary 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: November
19, 2007
Roll Call: 07-2191
Action: Approving
tax abatement applications for additional value added by improvements made
during 2007 (96 applications). (Council
Communication No. 07-674) Moved by Vlassis to adopt. Motion Carried 7-0.
Date: October
22, 2007
Roll Call
Number: 07-2021
Action: Approving
tax abatement applications (65) for additional value added by improvements made
during 2007. (Council
Communication No. 07-631)
Moved by Vlassis to adopt. Motion Carried 7-0.
Date:
September 24, 2007
Roll Call
Number: 07-1831
Action: Approving
tax abatement applications (69) for additional value added by improvements made
during 2007. (Council
Communication No. 07-574)
Moved by Kiernan to adopt. Motion Carried 7-0.
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.