HomeMy WebLinkAboutA054 - Council Action Form dated February 27, 2001 i
ITEM # �0 �, b,
DATE: 02/27/01
COUNCIL ACTION FORM
SUBJECT: HEARING ON URBAN REVITALIZATION PLAN FOR SOMERSET
VILLAGE
BACKGROUND:
On January 9, 2001 , the City Council voted to continue the hearing on the Urban
Revitalization Plan for Somerset Village until the City received an analysis following the
visit by Todd Zimmerman from Zimmerman/Volk. You will recall that the current plan
calls for tax abatement in the commercial portion of Somerset Village for buildings that
house a grocery store, restaurant, or housing for low and moderate income individuals
on the second floor. The developers of Somerset Village have asked that this incentive
be expanded to provide a three year, 100% abatement for all new residential units
(single and detached), for all apartment units, and for all retail structures constructed in
that portion of the Village that has been subdivided to date.
An analysis provided by the City Assessor indicated that the value of this abatement
could equal as much as $3,170,520 if the area is totally built out in the next three years.
Given the magnitude of this potential incentive, much discussion ensued as to whether
or not the subdivision was building out as fast as other areas in the City and, therefore,
worthy of this abatement incentive.
Todd Zimmerman visited the City on January 30th and 31 st and toured the Somerset
Village. During his brief visit he also talked to City staff members, Somerset
developers, builders, real estate agents, real estate lenders, and real estate appraisers.
As a result of this investigation, Mr. Zimmerman provided his observations and
recommendations on the attached report. It is clear from his comments that he
believes certain past decisions that were made by both the City and the
developers have contributed to the problems that are evident today.
Problems that have resulted from decisions by the City include:
• Too much emphasis being placed on stylistic details.
This has overly complicated development in the Village and served to discourage
prospective builders and homeowners. Mr. Zimmerman has suggested that the City
adhere firmly to the village design principles, but consider eliminating the less
important style requirements.
• The approval of densities in excess of nine units per acre.
Since it has been the City that has emphasized a much higher density in Village
Residential development, this has resulted in building proposals from the
developers that include large apartment structures. These large apartment
structures and the total density may have skewed the development more towards a
non-owner community. Mr. Zimmerman is suggesting that the City consider
allowing the reduction of the densities in the Village and the removal of the largest
apartment buildings envisioned in the current plan.
Problems that have resulted from decisions by the Developers include:
• The site plan does not integrate the different housing types in close proximity
to each other and;
• Too many phases were opened before one section was completed.
Mr. Zimmerman has acknowledged that, because some level of construction has
begun in every sub-divided phase, it will be difficult to correct these flaws. Mr.
Zimmerman has emphasized the importance of marketing Somerset in terms of the
"total living experience" and not simply to market individual home and unit sales. It
was indicated that well executed traditional neighborhoods exhibit a superior
streetscape, which is created by strict adherence to building placement, consistency
in overall architectural massing and proportions, and other dominant architectural
features. Mr. Zimmerman and others well versed in Traditional Neighborhood
Development refer to this as "the public realm."
Mr. Zimmerman has also indicated that it is crucial that a portion of the Village that
best reflects the integrated nature of the housing types be completed as soon as
possible to offer potential residents a glimpse of this superior living experience.
Specific suggestions have been offered by Mr. Zimmerman that are intended to
overcome some of the existing flaws in the project and also to serve to increase the
pace of sales. The following listed suggestions are based on a very short visit to
Somerset, and should not be considered all the suggestions that would be offered if a
more detailed Market Analysis were performed:
(1) A correction to the mix of housing types that are constructed in Somerset is
needed. This correction can only occur accurately as the Market Position Analysis
is completed. Mr. Zimmerman believes that there may be too many non-owner
occupied dwelling units proposed and there is little or no housing option for
empty-nesters and retirees.
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(2) Focus near-term construction and development efforts in a small, discreet area
that will accomplish the first marketing objective of a traditional neighborhood, the
creation of the superior public realm. This objective can be accomplished by the
completion of development along a street. Mr. Zimmerman recommends that
construction efforts be focused on the area along Camden Drive on either side, the
north and south sides of Bristol Drive (especially near the Grove), and Lot 19
adjacent to the Grove.
(3) Adjust the "architectural style" by simplifying the guidelines to address only the
essential building design elements that serve to create the superior public realm.
(4) Generate more activity at the Somerset location, which will serve to expose the
superior living experience to more people. This approach is seen as being more
effective than to rely solely on the real estate sales community as a means to
market the neighborhood.
(5) Marketing Somerset must include an approach to marketing where the entire
neighborhood and the living experience is promoted in contrast to marketing
individual homes for sale or apartment units for rent.
(6) Adjustment to the development plan including:
a) revision to the layout of the Townhome area west of Stange Road (that has
not yet been constructed) to correct the problem where the fronts of some
structures face the backs of other structures,
b) revise the uses proposed for the area that now includes Village Cottages
along Somerset Drive to create a more "gentle" transition between housing
types,
c) create a connected walk system to significant destination locations
(commercial area, parks, clubhouse).
A copy of the report from Zimmerman and Volk is attached for review.
The City Council indicated that they would consider the request for tax abatement after
receipt and review of the recommendations from Zimmerman and Volk.
ALTERNATIVES:
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1 . The City Council can decide not to approve the Urban Revitalization Plan as
originally proposed on November 28, 2000, and the corresponding Tax Abatement for
Somerset Village.
2. The City Council can approve the Urban Revitalization Plan as originally proposed
on November 28, 2000, and the corresponding Tax Abatement for single family
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attached, single family detached, multi-family, and commercial structures for retail uses
in the Somerset Village.
3. The City Council can approve a revised Urban Revitalization Plan for a portion of
the Somerset Subdivision that offers tax abatement only for the single family detached
units. This option would be subject to conditions numbered 1 through 8 as detailed in
the Manager's Recommended Action.
4. The City Council can approve a revised Urban Revitalization Plan for a portion of
the Somerset Subdivision that offers tax abatement only for the multi-family structures.
This option would be subject to conditions numbered 1 through 8 detailed in the
Manager's Recommended Action.
5. The City Council can approve a revised Urban Revitalization Plan for a portion of
the Somerset Subdivision that offers tax abatement only for the commercial structures
used for retail businesses. This option would be subject to conditions numbered 1
through 8 detailed in the Manager's Recommended Action.
6. The City Council can approve a revised Urban Revitalization Plan for a portion of
the Somerset Subdivision that offers tax abatement for only the single family detached
units and the commercial structures used for retail businesses. This would be subject
to conditions numbered 1 through 9 as detailed in the Manager's Recommended
Action. Staff would support a future tax abatement of 100% for a period of three years
for multiple-family and attached single family structures only after the activities detailed
in condition number 9 have been completed.
The additional abatement for multi-family and attached single family units would be
accomplished with a further modification to the Urban Revitalization Plan some time in
the future.
MANAGER'S RECOMMENDED ACTION:
Much of the discussion over the past months has focused on whether or not the
Somerset Village has developed to a faster or slower degree than other subdivisions in
the City. What City staff has learned from discussions with Todd Zimmerman is
that the neo-traditional village is a unique housing and development product. In
order to provide its greatest value to the developer and potential residents, it is
crucial that development fully integrate the various housing types with the public
open spaces, and that it be completed as soon as possible. This quick
integration will allow for the marketing of the total living experience. Again, this
is referred to as creating a superior "public realm."
The real issue is not whether this subdivision is developing faster or slower than others
in the City, but whether the proposed tax abatement will expedite the completion of the
Village. Since this form of incentive has never before been so comprehensively applied
to a residential development, there is no data available to predict its effect. In those
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instances when abatement has been utilized in isolated cases for multi-family and
industrial uses in the City, it appeared to have been one factor in hastening investment
in the development project.
Staff realizes that the discussion of tax abatement has generated a significant amount
of controversy among some of our citizens. Most of the criticism is focused solely on
the potential benefit to the developers. There has been little discussion about the
benefits that will be derived by the City. It can be argued that some limited form of tax
abatement for this Village project seems justified because:
• The Land Use Policy Plan clearly professed the Village to be the preferred
form of land use.
• Somerset is the first effort by the City and the development community to
create the village concept. Therefore, extra help might be needed for this
initial effort until more experience is obtained by the City, development
community, and the buying public.
• If tax abatement will assist in hastening the pace of sales and
development that will result in a superior public realm in a village, then it
could be argued that tax abatement should be given as a catalyst for
obtaining this public objective.
Staff has learned that no amount of incentive alone will guarantee the
marketability of a village. The development plan for this unique experience must
be designed and implemented correctly. What seems to cause Mr. Zimmerman the
most concern is how the large apartment units (and to some degree some townhouse
units that have not yet been built) will integrate with the remainder of the development.
He has stated repeatedly that he is unwilling to offer any further recommendations until
a Market Position Analysis is completed. From this study, the ultimate size, design,
market, and phasing plan for Somerset can be determined.
As a result of all that staff has learned in the brief interaction with Todd
Zimmerman, it is the City Manager's recommendation that the City Council
approve Alternative 6. This option will approve three year, 100% tax abatement
for all single family detached units and the commercial structures used for retail
businesses for that portion of the Somerset Village that is already subdivided.
This abatement incentive recommendation is subject to the nine conditions listed
below:
1) No fewer than ten single-family detached or attached housing units shall either be
under construction or complete and offered for sales at all times.
2) With respect to the aforesaid housing units, special financing terms shall be
offered to persons purchasing such units for their own occupancy in the form of
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interest write-downs or cash bonuses equaling, at a minimum, $3,000 up to $6,500
depending on the mortgage.
3) Purchasers of lots from the developers will be eligible to receive house plans that
have been approved to meet the architectural guidelines in Somerset. These
plans will be provided to the lot purchaser free of charge.
4) Developers shall grant an additional $1,000 bonus per sale to the selling agent
who sells any newly-constructed (and never-occupied) home listed for sale in
Somerset.
5) Informational meetings for all real estate agents in the City of Ames should be held
periodically to explain the village concept and to showcase the completed inventory
available for sale in Somerset.
6) Civic groups shall be allowed to use the Somerset clubhouse free of charge on a
one-time basis.
7) The selling of new homes constructed in the Somerset Subdivision is, at all times
while this plan is in effect, open to all real estate agents of the local real estate
market, provided that the agents follow all the rules and procedures of Somerset.
8) The Developers continue to develop the entire Somerset project as shown by the
City approved preliminary plat of Somerset as a Village in accordance with the
zoning change agreement adopted or hereinafter amended for the Somerset
Subdivision.
9) The Developers and the City share the cost for Zimmerman/Volk to perform a
Market Position Analysis. After receiving this report, the developers agree to:
a) modify their master plan to reflect the recommendations of Zimmerman/Volk,
b) adjust the mix of housing types in accordance with the recommendations,
c) build out the Village to the acreage suggested by the report even if it extends
to land currently not platted for the Village,
d) implement the marketing strategy outlined in the Zimmerman/Volk study.
The City Council should understand that the implementation of the Tax
Abatement incentive that would be applicable to single family detached homes
(approximately 15-20 individual homes) would be an incentive given to the home
buyer only if the Developers complete all nine of the previous conditions. In the
event the developers do not adhere to the stated conditions, then the home buyer
would not be eligible to receive the tax incentive.
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The City Council should note that the recommendation does not include the
granting of tax abatement for single family attached units or multi-family
structures at this time. It is clear from the recommendations of Todd Zimmerman that
a market study should be completed first, and the subsequent revisions in the master
plan should be made in order to assure the success of the village. Therefore, the staff
believes that no additional tax abatement should be offered at this time until the
developers have implemented the provisions outlined in all nine conditions listed above.
The Developers of Somerset have emphasized a desire for a three-year, 100% tax
abatement for all structures in the platted portion of this subdivision. However, they
have also made it clear that they need a final answer from the City Council
regarding the abatement request. Any decision that would delay a response to
the request that was initiated in September, 2000, would be unacceptable to the
Developers. Apparently some sales have been delayed while buyers await a final
Council decision. Because the recommended action might not lead to a final decision
on tax abatement for all uses until sometime in the summer when a Market Position
Analysis can be completed, it is unlikely that the Developers will support staff's
recommendation.
APPROVAL PROCEDURES
i The approval procedures for this tax abatement issue are quite complex and
require special mention in this report. The procedures for establishing an Urban
Revitalization District involve very extensive notice and public hearing requirements as
set forth in the Code of Iowa. The City already began these procedures as early as
October 25, 2000. The actual hearing on this issue has been continued since
November 28, 2000. As previously stated, the Developers of Somerset are seeking a
decision on the Tax Abatement question. In general, there are three procedural
strategies that can be undertaken by the City Council to resolve this issue. These
strategies are described as follows:
Deny Request. If the decision of the City Council is to deny the establishment of
any additional tax abatement incentives for the Somerset Subdivision, then the City
Council can make that decision as described in Alternative #1 of the Manager's
Recommended Action at the meeting of February 27, 2001 .
Approve Request. If the decision of the City Council is to approve the
establishment of tax abatement incentives as proposed on November 28, 2000, for the
Somerset Subdivision, then the City Council can make that decision as described in
Alternative #2 of the Manager's Recommended Action at the meeting of February 27,
2001.
Approve And Then Amend An Existing Plan If the City Council decides to grant
the Tax Abatement incentive as described in either Alternative 3, 4, 5, or 6, then the
City Council could expedite the process by continuing the public hearing that has
already begun to a special meeting that staff would suggest occur on March 15, 2001.
At that meeting, the City Council could adopt the Urban Revitalization Plan that was
previously proposed on November 28, 2000, and then immediately amend that Plan to
reflect one of the approaches that is detailed in Alternative 3, 4, 5, or 6. City Council
might view this procedural strategy as very unusual, but this approach would
minimize the time needed to bring final closure to this aspect of the tax
abatement request before the City without prolonging the issue by following the
30-day notice provision and three readings requirements.
Reject A Proposed Plan And Approve A New Plan. If the City Council decides
to grant the Tax Abatement incentive as described in either Alternative 3, 4, 5 or 6, then
the City Council could initiate a more extended process by denying the original request
for the Tax Abatement at the meeting of February 27, 2001 , and direct that staff
schedule a public hearing for April 10, 2001, to consider comments from the public on
either Alternative 3, 4, 5 or 6 of the Manager's Recommended Action.
COUNCIL ACTION:
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COUNCIL ACTION SUMMARY
Meeting Date: February 27, 2001
Agenda Item #: 20a-c
SUBJECT: Hearing on Urban Revitalization Plan/Amendment to URA #7 Plan for Somerset Village
(continued from 1/09/01)
ACTION TAKEN: Approved the concept of granting a tax abatement incentive for a portion of the
Somerset Subdivision for only the single-family, detached units and the commercial structures used for retail
businesses with the following stipulations:
1. No fewer than 10 single-family, detached or attached housing units shall either be under construction or
complete and offered for sale at all times;
2. With respect to the aforesaid housing units, special financing terms shall be offered to persons purchasing
such units for their own occupancy in the form of interest write-downs or cash bonuses equaling, at a
minimum, $3,000 up to $6,500 depending on the mortgage;
3. Purchasers of lots from the developers will be eligible to receive house plans that have been approved to
meet the architectural guidelines in Somerset. These plans will be provided to the lot purchaser free of
charge;
4. Developers shall grant an additional $1,000 bonus per sale to the selling agent who sells any newly-
constructed (and never occupied) home listed for sale in Somerset;
5. Informational meetings for all real estate agents in the City of Ames should be held periodically to explain
the village concept and to showcase the completed inventory available for sale in Somerset;
6. Civic groups shall be allowed to use the Somerset clubhouse free of charge on a one-time basis;
7. The selling of new homes constructed in the Somerset Subdivision is, at all times while this plan is in effect,
open to all real estate agents of the local real estate market, provided the agents follow all the rules and
procedures of Somerset;
8. The developers continue to develop the entire Somerset project as shown by the City-approved preliminary
plat of Somerset as a Village in accordance with the zoning change agreement adopted or hereinafter
amended for the Somerset Village; and,
9. The developers and the City share the cost for Zimmerman/Volk to perform a Market Position Analysis.
AND, continued the public hearing to March 27, 2001, for approval of the Urban Revitalization Plan
for Somerset Village and then amendment of the Plan.
MOTION BY: Campbell
SECOND BY: Goodhue
VOTING AYE: Campbell, Cross, Goodhue, Hoffman, Quirmbach, Wirth
VOTING NAY: None
ABSENT: None
By: ' . ,�-
Jill Ripperger, uty dity Clerk
copy to: Brian O'Connell
John Klaus
ZIMMERMANNOLK ASSOCIATES, INC.
17 East Main Street RECEIVED
Clinton, New Jersey 08809
908-735-6336 • 908-735-4751 facsimile FEB U 82001
Research &Strategic Analysis
CITY OF AMES,IOWA
DEPT.OF PLANNING&HOU
M EMORANDUM
DATE: February 5, 2001
PROPERTY: Somerset
City of Ames
Story County, Iowa
RE: Observations and Recommendations
FOR: City of Ames
This memorandum outlines observations and recommendations after review
of physical conditions at Somerset, visits to new subdivisions and apartment
communities, and informal discussions and interviews with Somerset's
developers, Ames builders, allied real estate professionals and City staff.
Although we have not conducted a market position analysis on the property,
we remain reasonably confident that the reason for slow sales is not the lack of
market potential for housing within a genuine traditional neighborhood but
rather the development's execution and positioning. Poor sales seem to be
attributable to an incorrect housing mix, flaws in the site plan, and poor
phasing. The combination of these problems has created a negative image for
Somerset among builders, real estate brokers and, to some extent, the buying
public.
There are, however, several positive factors that should not be underestimated:
• Somerset's developers—because of the quality of their work and
commitment to Ames-based builders and subcontractors—are held in
high regard by the real estate community.
MEMORANDUM Page 2
Somerset
City of Ames, Iowa
February 5, 2001
• Somerset has what is probably the best new housing location in Ames.
• The attached housing, both rowhouses and small-scale apartment
buildings, have been generally well executed.
• Elements of the commercial core that have been completed are both
attractive and functional.
Recommendations for reversing the current situation are as follows:
1. Expand the potential market by correcting the housing mix.
The current mix does not serve the full range of household types.
Notable in their absence are ownership units appropriate for older
residents. It also seems probable that attached housing units are too
heavily represented in the mix.
Although specific recommendations can only be made based on a
detailed understanding of the market through a Market Position
Analysis, it is clear from observation that older households have few if
any ownership options at Somerset; empty-nesters and retirees always
represent some portion of the market for traditional neighborhoods.
Empty-nesters prefer a ground-level master suite. One-level plans are
not required, however; secondary bedrooms can be located on the second
floor. Steps from grade level to the main living level are typically not a
deterrent to empty-nester buyers.
To accommodate these housing types, some rowhouse lots must be made
wider. Appropriate locations for detached cottages must be identified.
ZIMMERMAN/YOLK ASSOCIATES,INC.
MEMORANDUM Page 3
Somerset
City of Ames, Iowa
February 5,2001
2. Reverse the impact of phasing errors by completing an area within
Somerset that includes several housing types.
Despite the extensive infrastructure that has been completed, Somerset
has yet to achieve the first marketing objective of traditional
neighborhoods: to demonstrate the superior public realm through the
completion of a street. The area that holds the best potential for
completion is Camden Drive west to Stange Road north to Bristol Drive
west to the end of the first rowhouse building. This would require the
following:
— Complete missing buildings: north on Bristol Drive around The
Grove
< On Camden Drive;
< On Bristol Drive facing The Grove and the completed
rowhouses; and
< On Lot 19 on the corner of Sherwood Avenue and Bristol
Drive.
— Adjust detailing of The Grove to correct for the adjacency of the
backs of the houses on Lots 19 and 20. A screen or evergreen
hedge at the lot line should be sufficient to make The Grove feel
like a public place.
Future phases should also be completed with the same objectives in
mind. The sales price and rent premiums typical to well-executed
traditional neighborhood developments only come when the superior
streetscapes are evident.
ZIMMERMAN/YOLK ASSOCIATES,INC.
MEMORANDUM Page 4
Somerset
City of Ames, Iowa
February 5,2001
3. Focus architectural style regulations so that they are less costly, and yet
maintain a consistent design quality.
The design review must be pared down to only essential elements.
Expensive trim is wasted when basic non-historical finish details (e.g.—
cantilevered, vinyl-clad chimneys, "porkchop" rake ends, portico
columns in the wrong place) are allowed.
In many cases there are less expensive solutions to finish problems. For
example, in instances where the long sides of multifamily,garages face
streets (itself a flaw in the plan) windows are required; "closed" shutters
would provide the same relief at a much lower cost.
4. Offset negative market perception by generating more activity on the site.
Once the first two items above have been completed, Somerset should be
more presentable and the qualities of the community will be more
evident to visitors. The property must be re-introduced directly to the
market, rather than relying on real estate brokers who may be skeptical
that Somerset houses can bring them a commission without significant
extra effort. Several tactics should be employed to bring households to
the site:
— Hold regular events on site, such as:
< Farmers' market in town center parking lot; and
< Community events (fishing derby, etc.) on Somer Pond.
— Recruit destination uses in center. The potential restaurant,
bakery, and bar are important adjuncts, not just for the
commercial center, but also to demonstrate the benefits of a
traditional neighborhood to potential residents.
ZIMMERMAN/YOLK ASSOCIATES,INC.
MEMORANDUM Page 5
Somerset
City of Ames, Iowa
February 5,2001
5. Market Somerset, not simply dwelling units.
A professional sales and marketing program should be established that
is designed to sell the quality and lifestyle of the traditional
neighborhood. An on-site welcome center should located in the
commercial center. Staff must be trained to outline and market the
vision of Somerset first before marketing a specific housing type.
6. Adjust plan to recover the traditional neighborhood characteristics.
The plan has many "problem areas" where the advantages of the
traditional neighborhood have been lost. There are many places where
there is a confusion of front and back, with the front of dwellings facing
the rear-loaded garages of other units—particularly in the "townhome
district." In those places where infrastructure has not been completed,
these conditions must be corrected; otherwise, these dwellings will
require significant price discounts.
A more gentle transition between housing types should be
accommodated on the plan. Like housing types should face each other
across streets, with transitions occurring at the rear of lots or at alleys.
An exception can be made at parks, where a variety of housing types can
face each other across public space. Transition from type to type across
alleys or rear lot lines should not be abrupt, but rather moving from
detached to townhouses to two-story multifamily to three-story
multifamily.
To show the walkable streets of the traditional neighborhood to best
advantage, there must be significant destinations for walkers. The
commercial center is one such destination. The community center
should be another. Therefore, the clubhouse must be connected
physically and visually as the terminus of Northridge Parkway. The
visual terminus should be in the form of a vertical element, such as a
ZIMMERMANNOLK ASSOCIATES,INC.
MEMORANDUM Page 6
Somerset
City of Ames, Iowa
February 5, 2001
tower; the physical terminus should be based on the extension of
Northridge Parkway to the clubhouse.
Walkability would also be enhanced by the creation of marked and
measured routes along Somerset's sidewalks for exercise walkers and
runners. These routes should include various loops, including all the
important locations and parks.
As noted here and in our previous memorandum, the completion of a Market
Position Analysis would be fundamental to any further recommendations and
would inform decisions relating to each of the recommendations above. The
results of the Market Position Analysis would provide the basis for:
• Adjustment of the mix of housing types to match the characteristics of the
market potential;
• Establishment of appropriate pricing;
• Proposed changes to the plan that would improve the marketability of the
units;
• Modifications and/or additions to specific models;
• An effective phasing plan; and
• Advice on marketing.
ZIMMERMAN/VOLK ASSOCIATES,INC.
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