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Date
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April 21, 2008
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Agenda
Item No. 20 Roll
Call No. 08- Communication No. 08-238 Submitted by: Larry Hulse, Community Development |
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AGENDA
HEADING:
Approval
of two (2) tax abatement applications for improvements to property to be completed
in the future.
SYNOPSIS:
Recommend the
pre-approval of two (2) tax abatement applications as provided by Iowa Law,
with an estimated value by the applicant of $31,000,000 for the renovation of
two buildings for residential and commercial uses. The structures are located at
FISCAL
IMPACT:
Amount: $871,410 (Estimated taxes per year for
ten years)
Tax abatement on
the property with a claimed value of $31,000,000. Taxes are generated in the
first year from the land value. The
improvement value will be forth coming when the $31,000,000 comes on the tax
rolls after abatement period ends.
The buildings are currently paying $21,084.07 per year in taxes;
$9,839.47 (
The estimated future taxes on the $31,000,000 (applicants stated
value) per year would be $871,410 based on the estimated value multiplied
by the .02811 millage rate for the City of
Funding
Source: N/A
ADDITIONAL
INFORMATION:
A total of two tax abatement applications are being submitted at this time with an estimated value by the applicants of $31,000,000 for newly renovated residential and commercial uses in these existing buildings.
The
applicant chose Schedule 4A with an estimated
value of $31,000,000. 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.
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.
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: February
25, 2008
Roll
Call: 08-298
Action: Approving
tax abatement applications (346) for additional value added by improvements
made during 2007. (Council
Communication No. 08-094)
Moved by Hensley to adopt. Motion Carried 7-0.
Date: January
28, 2008
Roll
Call: 08-120
Action: Approving
tax abatement applications (208) for additional value added by improvements
made during 2007. (Council
Communication No. 08-029) Moved by Kiernan to adopt. Motion Carried 7-0.
Date: December
17, 2007
Roll
Call: 07-2369
Action: Approving
tax abatement applications (44) for additional value added by improvements made
during 2007. (Council Communication No. 07-732) Moved by Hensley to adopt. Motion Carried 6-1.
BOARD/COMMISSION
ACTION(S): NONE
ANTICIPATED
ACTIONS AND FUTURE COMMITMENTS:
The
tax abatement program on new improvements currently ends on December 31, 2011,
unless the City Council extends the program beyond that date. Any application received by February 1, 2012,
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.
For more information on this and other agenda items,
please call the City Clerk’s Office at 515-283-4209 or visit the Clerk’s Office
on the second floor of City Hall,