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Date
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March 9,
2009
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Agenda
Item No. 15 Roll
Call No. 09- Communication No.
09-131 Submitted by:
Larry Hulse, Community Development Director |
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AGENDA
HEADING:
Approval
of seven (7) tax abatement applications
for improvements to property completed in 2008.
SYNOPSIS:
Recommend
Council approval of 7 tax abatement applications with an estimated value by the
applicants of $559,600. There were two (2) applications for the construction of
new single family homes, apartments, and new businesses with an estimated value
of $230,000 and five (5) applications for improvements to existing structures
with an estimated value of $329,600.
FISCAL
IMPACT:
Amount: Tax abatement upon property with a claimed value of
$559,600.
Funding Source: Taxes
will only be generated from the land value while abatement is in effect. Taxes on the $559,600 improvement value will
be forth coming when the improvement value comes on the tax rolls after
abatement ends.
ADDITIONAL
INFORMATION:
A total of 7 tax abatement applications are being submitted at this time with an estimated value by the applicants of $559,600. There were 2 applications for the construction of new single-family homes, apartments, and new businesses with an estimated value of $230,000 and 5 applications for improvements to existing structures with an estimated value of $329,600.
A total of 2 applicants chose Schedule 1 with an estimated value of $21,600. 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 0 applicants chose Schedule 2 with an estimated value of $0.00. 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 0 applicants chose Schedule 3 with an estimated value of $0.00. 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 1 applicant chose Schedule 4A with an estimated value of $60,000. 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.
A total of 4 applicants chose Schedule 4B with an estimated value of $478,000. 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 2008
Schedule Count
& Value
1 292 $5,586,021.11
2 15 $53,772,109.00
3 17 $30,608,592.00
4a 237 $48,499,058.26
4b 294 $59,686,387.81
Total 855 $198,152,168.18
Cumulative Totals for 2007
Schedule Count
& Value
1 286 $5,360,236.05
2 9 $14,141,403.00
3 12 $27,649,173.00
4a 117 $73,004,443.50
4b 399 $88,220,793.43
Total 823 $208,376,038.98
Cumulative Totals for 2006
Schedule Count
& Value
1 315 $15,336,930.62
2 13 $13,564,515.00
3 9 $10,533,840.00
4a 370 $60,956,657.00
4b 381 $67,910,209.67
Total 1,088 $168,302,152.29
Cumulative Totals for 2005
Schedule Count & Value
1 377 $6,255,451.00
2 29 $25,394,060.00
3 14 $11,736,718.00
4a 124 $37,034,450.81
4b 598 $112,310,205.80
Total 1,141 $192,605,885.61
Cumulative Totals for 2004
Schedule Count & Value
1 364 $7,000,000.00
2 25 $8,000,000.00
3 9 $2,000,000.00
4a 94 $61,000,000.00
4b 680 $194,000,000.00
Total 1,172 $272,000,000.00
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
23, 2009
Roll
Call Number: 09-278
Action: Approving 392 Tax Abatement applications
for additional value added by improvements made in 2008. (Council Communication
No. 09-124) Moved by Hensley to
adopt. Motion carried 7-0.
Date: February
9, 2009
Roll
Call Number: 09-179
Action: Approving 183 Tax Abatement applications
for the additional value added by improvements made during 2008. (Council
Communication No. 09-052) Moved by Vlassis to adopt.
Motion Carried 7-0.
Date: December
22, 2008
Roll
Call Number: 08-2192
Action: Approving 129 Tax Abatement applications
for the additional value added by improvements made during 2008. (Council
Communication No. 08-738) Moved by Vlassis 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, 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, 400 Robert D. Ray Drive. Council agendas are available to the public
at the City Clerk’s Office on Thursday afternoon preceding Monday’s Council
meeting. Citizens can also request to receive meeting notices and agendas by
email by calling the Clerk’s Office or sending their request via email to
cityclerk@dmgov.org.