HomeMy WebLinkAboutA002 - Council Action Form dated November 14, 2023 ITEM#: 30
DATE: 11-14-23
DEPT: P & H
COUNCIL ACTION FORM
SUBJECT: ORDINANCE REVISING DOWNTOWN URBAN REVITALIZATION AREA
(URA) BOUNDARY AND RESOLUTION AMENDING CRITERIA FOR
DOWNTOWN URBAN REVITALIZATION AREA
BACKGROUND:
At the meeting on August 22, 2023, the City Council reviewed stakeholder and public input regarding a
wide range of issues related to Downtown investment and redevelopment. In response to this input,
the City Council directed staff to draft amendments to the Downtown Urban Revitalization Area
eligibility criteria (see Current Criteria in Attachment A) to expand opportunities for property
tax abatement related to new improvements.
City Council made the following motions pertaining to the Downtown URA:
1. Allow for 3-, 5-, and 10-year tax abatement schedule options,
2. Limit any property that has been identified as a contributing resource within a Local or National
Historic District as ineligible for tax abatement if demolished,
3. Request that staff report back with language that expands the opportunity for tax abatement to
interior and/or exterior projects with limiting principles as recommended by staff,
4. Request that staff craft a proposal regarding how to integrate energy efficiency as an additional
component to the tax abatement eligibility requirement, and
5. Add"Residential"to the list of eligible uses.
At the meeting on September 26, 2023, the City Council reviewed the proposed criteria and amended
map and made the follow motions:
1. To add an additional URA criteria for existing buildings requiring that they undergo an energy
audit, complete with assessment and recommendations, and supply the audit to the City for
information purposes only.
2. To direct staff to investigate and report on information regarding energy code compliance reports
for new construction.
3. Set October 10, 2023, as the date for the public hearing to amend the URA map.
Staff discussed the energy audit criteria with Electric Services staff and reviewed recent examples of
audits. Electric Services offers energy audits for businesses in its service territory and contracts with a
third party for the audits. Electric staff reinforced that the audit only has value before a project is
initiated. While the business requesting the audit is not charged for the service, the audit with the report
costs between $500 and $2,000 depending on the facility. The process takes 3-4 weeks in total to
schedule and complete. Electric Services budgets funding for 5-10 commercial audits across the entire
city in a year.
The proposed URA criteria require completion of an energy audit prior to making improvements. This
requirement will only apply to projects that are undertaken starting after July 1, 2024. This allows
projects that were completed recently to remain eligible for abatement even without the energy audit.
Staff has some concern that applicants may not be aware of the requirement before starting the project
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since typically no Planning and Zoning permits apply to these projects (now that a facade grant is no
longer required). Staff will implement a courtesy notice for Downtown Business permits in an effort to
try to educate property owners interested in the abatement program. (Attachment B, new Section#9).
City Council's other request for energy code compliance reporting will be forthcoming from the
Inspections Division of the Fire Department and is not included with the URA criteria.
SUMMARY OF PROPOSED CHANGES:
The major changes prepared by staff in response to the Council direction are highlighted below:
1. Adding 5- and 10-year sliding scale schedules as options for applicants (see Attachment C for
breakdown schedules),
2. Clarifying that only building improvements are eligible, not site improvements, such as parking
lots,
3. Clarifying that certain allowable uses in the Downtown Service Center Zoning District (DSC) are
eligible,but nonconforming uses are ineligible,
4. Prohibiting properties with recently demolished or altered historic buildings (See Attachment D)
from being eligible for 10 years,
5. Design requirements will apply the current Downtown Design Guidelines to construction of a
new building. For existing buildings, the front facade can either be compliant with Downtown
Design Guidelines or the new improvements do not negatively impact the front facade window
and door openings and transparency, i.e.,block or fill in openings.
6. No facade work is required to be eligible for abatement.
7. Adding Residential as an eligible use.
8. Requiring a commercial energy audit from Ames Electric or equivalent prior to starting
improvements.
AMENDMENT TO BOUNDARIES:
While not a URA criteria amendment, the proposed changes also include removing the properties
on both sides of Kellogg Avenue south of the Union Pacific Railroad tracks from the eligible URA
area map (Attachment E). This area is now zoned Downtown Gateway Commercial and the goals for
redevelopment in this area do not align with the goals of the Downtown URA.
PROPERTY NOTICE GIVEN:
Per Council's direction on October 24, staff sent a courtesy notice to all owners and tenants of property
on Kellogg Avenue that are proposed to be removed from the Downtown URA. These 15 affected
properties are between the Union Pacific Railroad tracks and Lincoln Way. One of the properties is
owned by the City and the rest are owned by three entities: Away Team LLC (five properties: the
southernmost properties on the west side of Kellogg Avenue), SALACL LLC (seven properties: all of
the properties on the east side of Kellogg Avenue), and Edward J. Wedelstedt (two properties:
Romantix and a nearby lot used for parking). No written comments have been received.
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ALTERNATIVES:
1. Approve the amended Downtown Urban Revitalization Area boundary map as shown in
Attachment E and described in Attachment F, and approve the amended URA criteria as written
in Attachment B.
2. Approve an alternate amended Downtown Urban Revitalization Area boundary map as shown in
Attachment E and described in Attachment F, and approve the amended URA criteria as written
in Attachment B with additional revisions.
3. Deny the amended Downtown Urban Revitalization Area boundary map and deny the amended
URA criteria.
4. Refer the item back to City staff for additional information.
CITY MANAGER'S RECOMMENDED ACTION:
The Downtown URA was adopted over 20 years ago to support reinvestment in Downtown and was
amended in 2008 and 2011. The City Council provided specific directives to staff on August 22 to
amend the tax abatement program to expand eligibility. In response, staff has proposed changes to the
eligibility criteria that attempt to balance redevelopment with the maintaining or improving
Downtown's character. The proposed changes included some safeguards to ensure the broadened
eligibility criteria still support the City's primary goals for maintaining Downtown character and
do not inadvertently incent improvements that are counter to this goal. Therefore, it is the
recommendation of the City Manager that the City Council adopt Alternative#1.
ATTACHMENT(S):
Attachment A.pdf
Attachment B.pdf
Attachment C.pdf
Attachment D.pdf
Attachment E.pdf
Attachment F.pdf
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Attachment A
Current Downtown Urban Revitalization Area Eligibility Criteria
1. Properties must be located within the designated Downtown Urban Revitalization
Area.
AND
2. Improvements must be made to one or more of the facades of a building on the
property that follow the current Downtown Design Guidelines for facade
improvements as approved by City Council.
AND
3. The scope of the work must follow the current Downtown Design Guidelines for
facade improvements as approved by City Council.
AND
4. If first floor is vacant before the facade improvements are made, then the front half
of the first floor is required to have a retail use after the improvements are
completed. If the first floor is not vacant before the facade improvements are made,
and has a permitted use, then it is eligible. No residential structures are eligible.
AND
5. The improvements must be maintained for the three years.
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Attachment B
Proposed Downtown Urban Revitalization Area Tax Exemption Criteria
with Modifications as Directed by Council on September 26, 2023
Established under Urban Revitalization Tax Exemption standards of Iowa Code 404.
1. The property must be located within the Downtown URA boundary.
2. Building improvements must be completed, and the building must have a certificate
of occupancy from Ames Inspections Division.
3. The minimum value of a building improvement must increase the actual value by
5% or more. Site improvements, e.g. parking lots, landscaping, etc. are not eligible
for tax abatement as a building improvement is required.
Note — A commercial use is required to have a minimum assessment agreement
approved by the City Assessor and the City prior to receiving tax abatement per
state law.
4. A property owner may choose either a 3-, 5-, or 10-year sliding schedule of tax
abatement. (See Attachment C)
Note — Residential properties may have partial tax abatement rates different from
commercial uses per requirements of state law.
5. The improvement must be maintained for the life of the tax abatement.
6. Use Eligibility
a. Existing Occupied Building — All permitted uses within the DSC zoning
district are eligible, including residential. All buildings that include
nonconforming uses are ineligible.
b. Existing Vacant Building — The ground floor must have a Retail Trade,
Restaurant/Entertainment use, or small production facility (e.g. taproom,
brewery, distillery, etc.) for the front half of the building. The remaining
ground floor area and upper floors may have any of the following uses: retail
trade, restaurant, entertainment, household living, or office.
c. Building New Construction or Addition (with or without a Parking Structure)
— Structure Parking improvements are eligible as an accessory use of a site
when the primary building also includes commercial uses on the ground
floor as defined for Existing Vacant Building or with City Council preapproval
of layout plan for the location and size of commercial space at the ground
floor.
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d. Ineligible uses include nonconforming uses to DSC zoning, institutional,
group living, transportation, communication, utility, and miscellaneous uses
defined within DSC zoning.
7. Ineligible Properties
a. Government-owned properties.
b. Properties identified as 1) a local or national historic resource/landmark or
2) properties having a contributing historic resource to a local or national
district, where the building (or buildings) has been demolished within the
past 10 years or otherwise modified* so that the building(s) are no longer
eligible for listing as a historic resource. (Attachment D)
* "Otherwise modified" includes alterations to character-defining features that
negatively impact the historic integrity of the resource as identified at the
time of the approval (either local or the National Register of Historic Places).
A building damaged or destroyed by an accidental fire or weather may be
pre-approved by City Council as eligible for tax abatement prior to making
improvements to a site.
8. Design Requirements
At the time of filing of a complete tax abatement application for City approval, the
new improvements must be in compliance with the following design requirements
as determined by the City:
a. Existing Buildings:
i. All front facades of an existing building are consistent with the
Downtown Facade Design Guidelines.
-OR-
ii. If there are no facade improvements:
1. No changes are required to the front facade for the
improvements,
2. The building must have a front customer entry from the street
at ground level, and
3. The improvements to the building have not substantially
reduced along the street(s) the ground floor transparency of
windows and doors by reducing openings, obscuring the
windows or doors with other materials, or replacing the glass
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with reflective, opaque, translucent, spandrel or other types of
glass, tinting or films that reduce transparency.
b. New construction, including additions, shall conform to the Downtown
Design Guidelines for facades.
9. Energy Audit Prior to Commencing Project
If an existing building is proposed to undergo improvements to qualify for tax
abatement, the applicant must complete a building energy audit prior to
commencing the project. The energy audit reviews current energy use and makes
recommendations for energy efficiency improvements. An audit conducted by
Ames Electric complies with this requirement, as does an independent audit
completed to the ASHRAE Level 1 standard with recommendations on energy
efficiency improvements.
The energy audit requirement applies for any project improvements that require a
building, fire, or trade permit issued after July 1, 2024. The audit must be
completed within the two years preceding the initiating the project improvements
qualifying for property tax abatement.
The applicant and building are not required to apply any of the suggestions in the
audit, but the audit must be submitted to the City as a part of the URA application
for final approval.
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Attachment C
URA Tax Exemption Schedule for 3, 5, and 10 Years
All qualified real estate located in the designated Urban Revitalization Area is eligible to
receive a partial exemption from taxation on the Actual Value added by the improvements
as specified by the schedules below. Any qualified real estate may elect one of the three
schedules.
The exemption period for ten (10) years. The amount of the partial exemption is equal
to a percent of the Actual Value added by the improvements, determined as follows:
For the first year 80%
Second 70%
Third 60%
Fourth 50%
Fifth 40%
Sixth 40%
Seventh 30%
Eighth 30%
Ninth 20%
Tenth 20%
The exemption period for five (5) years.
For the first year 100%
Second 80%
Third 60%
Fourth 40%
Fifth 20%
The exemption period for three (3) years. All qualified real estate is eligible to receive
a 100% exemption on the Actual Value added by the improvements for each of the three
years.
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Attachment D
National Register Historic District
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Attachment E
Downtown Urban Revitalization Area Eligibility Map
Downtown Urban Revitalization Area
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-- Proposed to Be Removed
UNCOLN WAY E UNCOLN WAY
52
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Legend 375 187.5 0 375 Feet jk
®Urban Revitalization Area
Prepared June 16,2011 by The City of Ames Planning Division
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Properties to Be Removed from Downtown URA
Full Full Assessed Assessed Assessed
Property Full Land Building Total Land Building Total
Property Address Owner Owner Address ParcellD Legal Description Value Value Value Value Value Value
AMES,CITY 50010-
119 KELLOGG AVE OF PO BOX 811 AMES IA 0811 0902358020 LEE&MUNN'S SO LOT:11 $0 $0 $0 $0 $0 $0
AWAY TEAM
105 KELLOGG AVE LLC 105 S 16TH ST AMES IA 50010 0902358070 LEE&MUNN'S SO LOTS 3&4 $105,800 $122,600 $228,400 $105,800 $122,600 $228,400
AWAY TEAM
113 KELLOGG AVE LLC 105 S 16TH ST AMES IA 50010 0902358040 LEE&MUNN'S SO LOTS 7 8&9 $158,400 $0 $158,400 $158,400 $0 $158,400
AWAY TEAM
303 LINCOLN WAY LLC 105 S 16TH ST AMES IA 50010 0902358080 LEE&MUNN'S SO LOTS 1&2 $162,000 $108,100 $270,100 $162,000 $108,100 $270,100
AWAY TEAM
109 KELLOGG AVE LLC 105 S 16TH ST AMES IA 50010 0902358060 LEE&MUNN'S SO LOT:S $52,900 $0 $52,900 $52,900 $0 $52,900
AWAY TEAM
111 KELLOGG AVE LLC 105 S 16TH ST AMES IA 50010 0902358050 LEE&MUNN'S SO LOT:6 $48,000 $0 $48,000 $48,000 $0 $48,000
SECTION:02 TOWNSHIP:83
RANGE:24
SE SW BEG SW COR LOCKWOOD
ADD W120 N60
7575 NE 56TH 50035- E120 S60 EX TRI SW CR&W35.5
213 LINCOLN WAY SALACL LLC ST BONDURANT IA 1157 0902382165 L13 LOCKWOODS ADD AMES $314,400 $224,000 $538,400 $314,400 $224,000 $538,400
SECTION:02 TOWNSHIP:83
RANGE:24
BEG NW COR LOCKWOODS ADD
7575 NE 56TH 50035- S35'W120'N35'
110 KELLOGG AVE SALACL LLC ST BONDURANT IA 1157 0902382190 E120'TO BEG SE SW $92,400 $76,800 $169,200 $92,400 $76,800 $169,200
7575 NE 56TH 50035- AMES GRAIN&COAL CO 1ST
120 KELLOGG AVE SALACL LLC ST BONDURANT IA 1157 0902382220 ADD LOTS 13-15 BLK 2 $267,400 $384,900 $652,300 $267,400 $384,900 $652,300
AMES GRAIN&COAL CO 1ST
ADD PARCEL"A"LOT 16 BLK 2&
7575 NE 56TH 50035- AMES GRAIN&COAL CO 2ND
124 KELLOGG AVE SALACL LLC ST BONDURANT IA 1157 0902382235 ADD LOT 11&RR CFN 13-84 $101,900 $25,700 $127,600 $101,900 $25,700 $127,600
SECTION:02 TOWNSHIP:83
RANGE:24
BEG 35'S NW CDR LOCKWODD
7575 NE 56TH 50035- ADD S40'W120'N40'E120'TO
104 KELLOGG AVE SALACL LLC ST BONDURANT IA 1157 0902382180 BEG SE SW SEC 2 AMES $91,500 $126,700 $218,200 $91,500 $126,700 $218,200
7575 NE 56TH 50035- AMES GRAIN&COAL CO 1ST
114 KELLOGG AVE SALACL LLC ST BONDURANT IA 1157 0902382200 ADD LOTS 9&10 BLK 2 $187,200 $202,400 $389,600 $187,200 $202,400 $389,600
118 KELLOGG AVE 7575 NE 56TH AMES GRAIN&COAL CO 1ST
STE 101 SALACL LLC ST BONDURANT IA 50035 0902382210 ADD LOTS 11&12 BLK 2 $170,100 $277,200 $447,300 $170,100 $277,200 $447,300
4655
WEDELSTEDT, COLORADO 80216-
121 KELLOGG AVE EDWARD J BLVD DENVER CO 3217 0902358010 LEE&MUNN'S SO LOTS 12&13 $86,300 $4,900 $91,200 $86,300 $4,900 $91,200
8547 E
WEDELSTEDT, ARAPAHOE RD GREENWOOD
117 KELLOGG AVE EDWARD J STE J-338 VILLAGE CO 80112 0902358030 LEE&MUNN'S SO LOT:10 $52,900 $146,100 $199,000 $52,900 $146,100 $199,000
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Attachment F
Legal Description for New Boundary
(Removing Kellogg Avenue South of the Union Pacific Railroad Tracks)
Beginning at the northeast corner of Lot 5, Block 7, Original Town of Ames, Story County,
Iowa; thence south a distance of 508.15 feet along the west ROW of Duff Avenue to the
north ROW line of the Union Pacific Railroad; thence westerly along said ROW to the
southwest corner of Lot 4, College Park Second Addition; thence northwesterly along the
west line of said Lot 4 to the southeast corner of Lot 5, College Park Second Addition;
thence north along the east line of said Lot 5 a distance of 158.1 feet to the south ROW
line of Fifth Street; thence east along said ROW line to the northwest corner of Lot 1,
Triangle Addition, which is also a point on the south ROW line of Fifth Street: thence north
across said ROW to the southwest corner of Lot 5, College Park First Addition; thence
north along the west line of said Lot 5 a distance of 203 feet more or less to the southwest
corner of Lot 4, College Park First Addition; thence north along the west line of said Lot 4
a distance of 100.4 feet to the south ROW line of Sixth Street; thence east along said
ROW a distance of 2761 feet, more or less, to the northwest corner of Lot 1, Block 7,
Original Town of Ames; thence north across said ROW to the east line of the alley of
Block 6, Original Town of Ames; thence north along the east line of said alley a distance
of 120 feet more or less to the northwest corner of Lot 4, Block 6, Original Town of Ames;
thence east along the north line of said Lot 4 a distance of 180 feet to the west ROW of
Duff Avenue; thence east a distance of 80 feet more or less across said ROW to the
northwest corner of Lot 7 of Blair's 2nd Addition: thence east along the north line of said
Lot 7 a distance of 180 feet to the northeast corner of said Lot 7; then south along the
east line of said Lot 7 a distance of 60 feet to the southeast corner of said Lot 7; thence
west along the south line of said Lot 7 a distance of 60 feet; thence south a distance of
60 feet to the north ROW of East Sixth Street; thence west along said north ROW a
distance of 120 feet more or less to the east ROW of Duff Avenue; thence west across
said ROW a distance of 80 feet more or less to the west ROW of Duff Avenue; thence
south along said ROW a distance of 306 feet more or less to the Point of Beginning.
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