HomeMy WebLinkAboutA001 - Council Action Form dated October 26, 2010 ITEM # 27
DATE: 10-26-10
COUNCIL ACTION FORM
SUBJECT: ORDINANCE EXTENDING THE INDUSTRIAL TAX EXEMPTION
AVAILABILITY TO YEAR 2020
BACKGROUND:
Iowa Code Chapter 427B authorizes municipalities to provide for five-year declining
scale property tax abatement as an incentive for new construction of property for
manufacturing, research, and warehousing and distribution. The City of Ames first
enacted an ordinance providing for industrial tax exemption in 1985 for an initial period
of five years. The ordinance was subsequently amended to make the exemption
available to 2010. The attached ordinance would amend the municipal code to further
extend the availability of the exemption in Ames to 2020 unless sooner repealed by
Council.
Nearly every City in Iowa has adopted an ordinance to provide abatement under
Chapter 427B as a method to attract new construction that will also improve
employment opportunities. Cities have been allowed to use the abated taxes as local
match to various other economic development incentive programs managed by the
state. The City of Ames would at a competitive disadvantage to other Iowa
communities if the ordinance offering property tax abatement were not extended beyond
2010.
ALTERNATIVES:
1 . Approve the ordinance extending the availability of the industrial tax exemption for
an additional ten years to the year 2020.
2. Approve the ordinance in an amended form to extend the industrial tax exemption
for a different number of years.
3. Take no action and allow the industrial tax exemption to expire.
MANAGER'S RECOMMENDED ACTION:
Availability of the Industrial Tax Exemption provides an important economic incentive to
attract new industries to Ames. Abated taxes can be used to match other state
economic development incentive programs managed by the state. In order to remain
competitive with other communities, this form of property tax abatement should be
continued. It is therefore the recommendation of the City Manager that the Council
approve Alternative #1 and enact the ordinance extending the availability of the
industrial tax exemption to the year 2020.