HomeMy WebLinkAboutA020 - Council Action Form dated February 22, 2005, old caf 6
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ITEM #
DATE 02/22/05
COUNCIL ACTION FORM
SUBJECT: SETTING THE DATE OF PUBLIC HEARING FOR MARCH 8, 2005, TO
AMEND THE PLANS FOR THE SOMERSET URBAN REVITALIZATION
AREA AND FOR URBAN REVITALIZATION AREA#7
BACKGROUND:
In September 1997, the City Council approved Urban Revitalization Area (URA)#7 for the
central, mixed-use portion of Somerset. This URA allowed the use of tax abatement for
three specific uses within the district:
1. Sit-down restaurants;
2. Grocery stores; and,
3. Commercial buildings with residential on the upper floors.
In March 2001, the City Council approved an amendment to URA #7 that allowed tax
abatement for all commercial uses. At the same time, it established the Somerset Urban
Revitalization area. The Somerset URA allowed for a three-year, 100% tax abatement for
single-family residential uses. The amendment and the new URA were approved with a
three-year time limit, which expired on May 1, 2004.
On April 27, 2004, the City Council referred to staff a letter from the Somerset developers
requesting an extension of the three-year, 100% tax abatement for all commercial uses in
URA#7 and in the Somerset URA. Staff never responded to this request and this request
never came back to the City Council for action. Therefore, as mentioned previously, the
only uses currently eligible for tax abatement within URA #7 are:
1. Sit-down restaurants;
2. Grocery stores; and,
3. Commercial buildings with residential on the upper floors.
While no uses are currently eligible fortax abatement in the Somerset URA, the district still
exists.
On August 18, 2004, the Development Review Committee (DRC) approved a Minor Site
Development Plan to allow for the construction of the Ames Racquet and Fitness Center
on Stange Road in the Somerset Subdivision. As the site is located within the Somerset
URA, the owner of this site believed that tax abatement was available for this development
and secured financing for his project accordingly.
On February 1, 2005, Tom Dirken, the owner of Ames Racquet and Fitness Center, applied
for tax abatement under the Somerset URA. At that time, it was brought to everyone's
attention that the previous amendment to URA #7 and the Somerset URA had expired. It
was never the intention of City staff that the amendment would be allowed to expire. It was
merely an oversight.
At this time, the request before the City Council is to set the date for public hearing
for March 8, 2005, to amend the plans for URA#7 and the Somerset URA to allow a
three-year 100% tax abatement for all retail commercial uses.
The existing URA #7 and Somerset URA have no established end dates. The proposed
amendment to these areas would officially begin on May 1, 2004 and would have either a
three year expiration date or no expiration date.
Related to this request, on February 8, 2005, the City Council unanimously approved an
amendment to the Major Site Development Plan for Somerset, which changed the
proposed uses on an approximately 4-acre parcel of property located on the west side of
Stange Road from village apartments, village houses, and one commercial day care site to
all commercial uses. It is the request of the Somerset developers that the tax abatement be
extended to include this parcel, as well. That will require an ordinance to designate that
land as an Urban Revitalization Area. The staff will start that process with the Council in
the near future.
ALTERNATIVES:
1. The City Council can approve the resolution setting the date of public hearing for
March 8, 2005 to amend the plans for Urban Revitalization Area #7 and the Somerset
URA, allowing for a three-year 100%tax abatement for all retail commercial uses with
no expiration date. This alternative is supported by staff because it would allow the
areas to develop at their own pace, and not be constrained by an expiration date that
would cause the URA to be extended in the future.
2. The City Council can approve the resolution setting the date of public hearing for
March 8, 2005 to amend the plan for Urban Revitalization Area #7 and the Somerset
URA allowing for a three-year 100% tax abatement for all retail commercial uses with
an expiration date in three years. This alternative would require the City to re-examine
the URA's in three years, and possibly be allowed to expire and necessitating similar
action like this at that time.
3. The City Council can refer this request back to staff and/or the applicant for additional
information. This alternative could be considered if Council would like to consider
additional or revised projects that should be eligible for tax abatement in either or both
U RA's.
4. The City Council can deny approval of the resolution setting the date of the public
hearing. This action would in essence deny approval of any URA amendment and
would not extend tax abatement benefits to the Ames Racquet and Fitness Club, now
under construction in Somerset.
2
CITY MANAGER'S RECOMMENDED ACTION:
In March 2001 the City Council expanded the eligibility for the Urban Revitalization tax
abatement incentive for retail commercial uses in the Somerset Village. The City Council
believed this action was warranted in order to support what the Land Use Policy Plan
declared as the preferred development option, the village. At that time it appeared as
though there was limited interested in developing at Somerset and expanding the tax
abatement eligibility was seen as a method for stimulating interest in the Village concept.
The expanded eligibility was to sunset after three years, presumably as a test period to
prove the success of this strategy.
It appears that this expanded tax abatement incentive did accomplish what the City Council
had hoped for. The commercial areas in Somerset began to develop after the policy
change was made. If we hope to attract developers to build subsequent villages, it is
important that the Somerset Village is successful. Now that the expanded eligibility for tax
abatement has ended, we don't want to jeopardize the building momentum that is occurring
at Somerset. Therefore, it is the recommendation of the City Manager that the City
Council approve Alternative#1.This action recommends that the City Council set the
date of a public hearing for March 8, 2005 to amend URA#7 and the Somerset URA,
to allow a three-year, 100% tax abatement for all retail commercial uses with no
expiration date.
COUNCIL ACTION:
S:\Council Boards Commissions\CC\Urban Revite\Urban Revitalization\Somerset URA Amendment-02-22-05.doc
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Somerset Subdivision
Somerset - Urban Revitalization Area
-�--Somerset Urban Revitalization Area N
a Somerset Subdivision Boundary
Urban Revitalization Area #7 w E
Not Included In Somerset Urban Revite Area S
Prepared by the Department of Planning and Housing 200 0 200 Feet
Map prepared: 1112112000