HomeMy WebLinkAboutA014 - Council Action form dated July 8, 2003 ITEM #:
DATE: JuIV 8, 2003
COUNCIL ACTION FORM
SUBJECT: APPROVAL OF THE URBAN REVITALIZATION PLAN FOR 1305
COCONINO ROAD AND FIRST PASSAGE OF AN ORDINANCE ESTABLISHING THE
URBAN REVITALIZATION AREA.
BACKGROUND:
On November 12, 2002 the City Council directed staff to prepare an Urban Revitalization
Plan and set a date of public hearing for January 14, 2003 to establish an Urban
Revitalization Area for 1305 Coconino Road. The developer was in the process of applying
for the Iowa Finance Authority's Low-Income Housing Tax Credit Program and a decision
concerning the application wasn't made until early March 2003. For this reason the date of
public hearing was pushed back until July 8, 2003.
City staff has prepared an Urban Revitalization Plan for 1305 Coconino Road. The
following items are included in the Urban Revitalization Plan:
• The area includes 1 property with the total current assessed valuation of land at
$936,000 and improvements of zero.
• It is expected that the value added will exceed the 5% increase required in actual
value on the vacant properties to be eligible for the tax abatement.
• The owners of the properties in the district are listed in the attached Urban
Revitalization Plan.
• The zoning classification is Residential High Density Zone (RH).
• There are no City infrastructure improvements associated with this project.
• The tax abatement will be given only for the construction of a 3-story, 56-unit
assisted living complex for low and moderate individuals at 1305 Coconino Road,
located within the east 307 feet of the south 199 feet of the URA district.
• The district will be in place for ten years.
• There will be no displacement of any persons and thus no relocation benefits
provided.
ANALYSIS
A considerable amount of time has passed since City Council reviewed this Urban
Revitalization request and directed staff to draft an Urban Revitalization Plan. Therefore,
the following information from the November 12, 2002 staff report has been provided:
The applicants have submitted a Request for Designation of Urban Revitalization Area for
1305 Coconino Road under the Multiple Family Residential Criteria Matrix. Staff has
determined that the request is complete and the information submitted is correct.
The total current assessment for the property is $936,600, with a taxable value of
$483,919, and the total tax revenue is currently $14,934. The estimated cost of the new
assisted living building is $5,000,000 and the estimated future tax revenue without
abatement would be $168,269.70.
The following analysis is from the building value estimated by the property owner and
the established land value by the Ames City Assessor. The project is taking advantage
of the law governing the assessments of projects funded under the Iowa Finance
Authority for Housing Tax Credit Award under the Section 42 Program. The program
requires that Section 42 rental properties are appraised on the income to value
approach. The State of Iowa has placed statewide taxable limit of 9.98% on the income
streams of properties eligible under the Section 42 program, which dramatically reduces
the taxable value on these projects.
The projected tax rate on the remaining taxable value is the current tax rate, with no
change being taken into consideration over a 10-year period on the value of the
property and the rate of taxes.
The taxes deferred and collected analyzing the three different tax schedules are listed
below based on the following valuation:
Estimated Value $ 1 ,700,000 Tax rate/$1,000 Valuation = $30.86
Land Value $ 280,000
Total Value $ 1,420,000
Yearly tax revenue on improvements,
existing value = $43,821 .20
No tax exemption over a 10 year period = $438,212
Taxes Exempted Per Taxes Paid Over 10-Year
Schedule Period
3-Year: $131,463.60 $306,748.40
5-Year: $131,463.60 $306,748.40
10-Year: $192,813.28 $245,398.72
2
Required Conditions.
The conditions for eligibility under the Multiple Family Residential Criteria Matrix mandate
that the property must display one of two required conditions before it can be determined
that the property is eligible to be considered further. These two threshold conditions are:
- Slum and Blighted
- Underutilized
The applicant has indicated that the site is underutilized in its present condition.
To meet the underutilized condition of the matrix, the property has to meet the following:
- Properties that are vacant in an in-fill area and were previously developed and
have had the principal structure removed; or
- Properties that are non-conforming with respect to the base zone must be
brought into compliance; or
- Properties that are non-conforming with respect to the flood way fringe must be
brought into conformance with applicable floodplain regulations.
It is staff's belief that the applicant's request meets the underutilized requirement in
that the current farmstead is non-conforming with respect to the base zoning (RH)
Residential High Density Zone.
Since staff believes the applicant meets one of the two required conditions, it has analyzed
the optional conditions. The applicant has selected the following optional condition:
"Affordable Housing and Availability of Affordable Units". Staff's analysis of the request
with respect to these optional conditions, is as follows:
Optional Conditions.
The two options selected by the applicant under the optional conditions of the Multiple
Family Residential Criteria Matrix are:
Affordable Housing
- Thirteen percent (13%) of the dwelling units in an apartment building are leased,
for an annual rental amount as determined by HUD standards (which are
adjusted annually), to families with children, elderly, and/or disabled individuals
whose income is at or below 80% of the Story County median income.
- Seven percent (7%) of the dwelling units in an apartment building are leased as
above to qualified persons at or below 50% of the Story County median income.
AND
Availability of Affordable Units
- Tax schedule and length of time units are available to the program:
- 3-year/5-year, 5-year/5-year, 10-year/10Year
3
The applicant has proposed that 100% of the proposed assisted living units will be
affordable to senior households at or below 60% of the Story County median income, and
that 15% of the units will be affordable to senior households with incomes at or below 40%
of the Story County median income level. The length of the affordable housing program is
proposed to be 50 years and will be stated in a land use restrictive covenant.
The applicant is exceeding all the optional standards by very substantial amounts. Staff is
recommending that the intent of the affordable housing option is being met and exceeded
by the applicant's proposal.
In addition, the applicant has a site plan that shows the assisted living building designed
with brick construction on 100% of the street face and on the sides of the building, for a
total brick coverage of 60%.
The applicant is also proposing to provide landscaping at 150% of the required
landscaping.
ALTERNATIVES:
1. The City Council can approve the attached Urban Revitalization Plan for 1305
Coconino Road.
2. The City Council can decide not to approve the Urban Revitalization Plan for 1305
Coconino Road.
3. City Council can direct staff to work with the developer to revise the Urban
Revitalization Plan in accordance with alternatives set forth by the City Council.
MANAGER'S RECOMMENDED ACTION:
In accordance with City Council's directive on November 11, 2002 staff has prepared the
attached Urban Revitalization Plan for 1305 Coconino Road. The approval of the Urban
Revitalization Plan for 1305 Coconino Road will assist the developers in their building
activities. It is thereby recommended that City Council approve the attached Urban
Revitalization Plan for 1305 Coconino Road.
COUNCIL ACTION:
4
URBAN REVITALIZATION PLAN
1. Property Address:
1305 Coconino Road
2. Legal Description of District:
Parcel "D", in Lot Five (5); Cochrane's Second Addition to the City of
Ames, Story County Iowa as shown on the "Plat of Survey" filed in the
office of the Recorder of Story County, Iowa on October 9, 1997 and
recorded as instrument#97-10908 in C&FN Book 15 at Page 59.
District Contains: 205,076 Square Feet or 4.7079 Acres
3. Assessed Valuation of Property within the District:
Land Value: $936,600
Building Value: $0
4. Owners within the District:
Terra Firma, LP, PO Box 1099, Ames, Iowa 50014
5. Zoning District Classification:
"RH" Residential High Density
6. City Services:
No new municipal infrastructure will be extended to the site.
7. Applicability of Revitalization:
Revitalization shall be applicable only to that subset of eligible property
described as the east 307 feet of the south 199 feet of Parcel "D", in Lot
Five (5); Cochrane's Second Addition to the City of Ames, Story County
Iowa as shown on the "Plat of Survey" filed in the office of the Recorder
of Story County, Iowa on October 9, 1997 and recorded as instrument
#97-10908 in C&FN Book 15 at Page 59 with the residential classification
that takes the form of a three-story 56 unit assisted living complex for low
and moderate income individuals.
8. Duration of Tax Abatement:
August 12, 2013
9. Relocation:
This plan does not require the displacement of any persons, and there will
be no relocation benefits provided.
10. Percent Increase in Value Added:
The value-added requirement is a five (5)percent increase in actual value.
11. Federal State or Private Grant/Loan Programs for Residential Improvements:
Low-Income Housing Tax Credit Program, Iowa Finance Authority
12. Existing Land Use:
Single-family, one and one-half story, 2nd level finished, built in 1885
13. Map Identification Number:
09-08-355-005
Mortensen Road
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Urban Revitalization Area Boundary
Area of 3-Story, 56-unit Assisted Living Complex
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ZONING: R—H
North
LEGEND:
Utility Easements
SCALE: 1 10 0'
Street Address
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Urban Revitalization Area Map