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Date
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December 21,
2009
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Agenda
Item No. 12 Roll
Call No. 09- Communication No.
09-887 Submitted by:
Larry Hulse, Community Development Director |
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AGENDA
HEADING:
Approval
of 69 tax abatement applications for improvements to property completed in 2009.
SYNOPSIS:
Recommend
Council approval of 69 tax abatement applications with an estimated value by
the applicants of $6,742,481.62. There
were 23 applications for the construction of new single family homes,
apartments, and new businesses with an estimated value of $4,794,364.00 and 46
applications for improvements to existing structures with an estimated value of
$1,948,117.62.
FISCAL
IMPACT:
Amount: Tax abatement upon property with
a claimed value of $6,742,481.62.
Funding Source:
Taxes will only be generated from the land value while abatement is in
effect. Taxes on the $6,742,481.62
improvement value will be forth coming when the improvement value 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 $6,742,481.62. There were 23 applications for the construction of new single-family homes, apartments, and new businesses with an estimated value of $4,794,364.00 and 46 applications for improvements to existing structures with an estimated value of $1,948,117.62.
A total of 39 applicants chose Schedule 1 with an estimated value of $477,978.62. 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. 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 $1,087,000.00. 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 property in specific areas.
A total of 11 applicants chose Schedule 4A with an estimated value of $1,807,000.00. 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 25 applicants chose Schedule 4B with an estimated value of $3,369,681.00. 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 2009
Schedule Count
& Value
1 97 $1,620,290.35
2 1 $225,000.00
3 3 $3,301,422.00
4a 34 $8,056,846.34
4b 102 $16,955,938.11
Total 237 $30,159,496.80
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: November
8, 2009
Roll
Call Number: 09-2500
Action:
Approving 80 Tax Abatement Applications
for the additional value added by improvements completed during 2009. (Council Communication
No. 09-779) Moved by Hensley to adopt. Motion Carried 6-1.
Date: August
10, 2009
Roll
Call Number: 09-1434
Action:
Approving 87 Tax Abatement applications
for additional value added during 2009.
(Council Communication
No. 09-545) Moved by Hensley to adopt. Motion Carried 7-0.
Date: March
9, 2009
Roll
Call Number: 09-376
Action:
Approving seven Tax Abatement applications
for additional value added by improvements made in 2008. (Council Communication
No. 09-131) 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.