HomeMy WebLinkAboutA001 - Council Action Form dated October 25, 2022 ITEM # 29
DATE: 10-25-22
COUNCIL ACTION FORM
SUBJECT: ORDINANCE AMENDING THE FIFTH TAX INCREMENT FINANCING
(TIF) DISTRICT BOUNDARY WITHIN THE IOWA STATE UNIVERSITY
RESEARCH PARK URBAN RENEWAL AREA.
BACKGROUND:
The City of Ames established the ISU Research Park Urban Renewal Area and Plan
(URA) on November 10, 2014 (Boundary Map — Attachment A). The URA was created
for economic development purposes and included plans for use of up to $7 million in Tax
Increment Financing (TIF) to facilitate economic development in the area in multiple
phases. The City established the first TIF area within this URA concurrent with approval
of the URA and Plan in 2014. The initial TIF area was designed to generate funds to pay
for the City's commitments for the construction of infrastructure to support Phase III of the
ISU Research Park expansion, with road improvements to University Boulevard and
Collaboration Way and utility extensions.
Subsequent to the initial approval of the URA and initial TIF Area, the land was subdivided
as the ISU Research Park Phase III Subdivision and the approved lot boundaries
corresponded to the TIF boundaries. In August of 2018, the City approved a request to
modify the Ames Fitness property Lot 5 boundary (creating the current Parcel `A') to allow
construction of an enclosed tennis facility containing four tennis courts (Attachment B).
The boundary line adjustment reduced the size of the abutting outlot. The TIF boundary
was subsequently amended in 2019 to conform to the new property boundaries to ensure
the whole of the property was within one tax district, i.e. the Fifth TIF District.
Ames Fitness is currently planning to expand the size of the bubble to enclose a
total of six tennis courts. An additional six outdoor courts will be constructed to
the south of the enclosed facility. New parking spaces will also be added to the
property.
The proposed ordinance amendment will add 2.532 acres (110,311 square feet) of land
area to the TIF District to account for the proposed concurrent boundary line adjustment
(Attachment C-New Parcel B). It is necessary to amend the area of the TIF to include
the full property to allow for the continued collection of tax increment related to
improvements on this site. It is not necessary to amend the URA since the area is
already within the broader URA boundary.
TIF boundaries must include the full area of a property to allow the Auditor to calculate
assessed value and the increment of taxes to be allocated to the City for TIF. Based
upon correspondence with the Auditor's Office, adding the land to the TIF area will
not reset the base value that was originally established for improvements that are
already in the TIF area. The value of improvement associated with the new area will
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be added to the existing base to then calculate future differences in incremental
values for the TIF.
Amending the boundary will ensure that we continue to receive the revenues that
we have previously relied upon to repay our debt and will potentially allow for
additional TIF revenue related to the planned tennis court expansion.
ALTERNATIVES:
1. The City Council can approve on first reading an Ordinance amending the boundary
of the First TIF Area of the ISU Research Park Urban Renewal Plan to include an
additional 2.532 acres of area.
2. City Council can decline to amend the TIF District Boundary of the First TIF Area,
which would remove the new Parcel from the TIF district.
CITY MANAGER'S RECOMMENDED ACTION:
Adding the 2.532 acres of land to the TIF area is important to maintain the assumed
incremental value of TIF to pay off debt that was previously issued in support of
infrastructure improvements in this area. Staff estimates that there are two additional
years of increment collection needed to pay off the original TIF debt used to support the
development the ISU Research Park Phase III.
To ensure consistency with legal descriptions, staff will ensure the property owner
records the Plat of Survey for the boundary line adjustment prior to completing the
third reading of this ordinance. Staff will request on November 8th that City Council
waive the rules and complete second and third reading to ensure the ordinance is
published and provided to Story County well in advance of the December 1st
deadline for providing TIF information to the County.
Therefore, the City Manager recommends Alternative No. 1, which is to have first
reading of an ordinance amending the first TIF District within the ISU Research
Park Urban Renewal Area.
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ATTACHMENT A: ISU RESEARCH PARK URBAN RENEWAL AREA
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Attachment B: Ames Fitness Site Expansion & TIF Expansion
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ATTACHMENT C: AMENDMENT TO FIRST TIF DISTRICT
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