HomeMy WebLinkAboutA019 - Staff Report, Tax Abatement STAFF REPORT
SOMERSET VILLAGE TAX ABATEMENT
Background:
On September 26, 2000 the City Council approved the Somerset developers'
request for amendment of the rezoning agreement to provide for a three year,
100%, tax abatement to all new residential and retail construction in a specific
area in the Somerset Village as detailed by the attached map. City Council also
requested that an analysis of the impact on the tax abatement be done to show
the impact on taxes collected if the project is approved.
Analysis:
City staff reviewed the area in question and verified which properties had
structures already on them, which would not qualify for the tax abatement. Staff
then calculated the building values from approved plans submitted by the
developers for the properties not yet built upon. In two areas to the north, a
village cottage development and a garden apartment development, averages
from the areas with approved plans were used because to date no plans have
been submitted.
The tax estimates were based on full build-out in one year for illustration
purposes only. This represents the maximum possible tax abatement based on
today's values, rollbacks, and tax rates. The 3-year total abatement would
actually be spread out over 5 years if all properties were developed during the
three-year eligibility window.
Qualifying structures built in 2001 and first assessed for January 1, 2002 would
be the first buildings with eligibility. The first tax payment affected would be due
the fall of 2003 and the last would be spring of 2008 (for 2004 applications).
Attached for the City Council's review is a tax abatement estimate from the City
Assessor's office based on the now vacant property that could be built out within
one year for purposes of this review.
The result is an estimated 3-year total tax abatement of$3,170,520. This
number includes city, county and school district abated taxes. The City of Ames
portion of the tax abatement would be $1,046,272 (33%).