HomeMy WebLinkAboutA002 - Council Action Form dated January 23, 2024 ITEM#: 28
DATE: 01-23-24
DEPT: P&H
COUNCIL ACTION FORM
SUBJECT: PREAPPROVAL OF INDUSTRIAL TAX ABATEMENT FOR R&D BUILDING
(CHEVRON)AT 300 SOUTH BELL AVENUE
BACKGROUND:
Iowa Code 472B allows for a partial tax abatement of certain industrial properties. The City has
adopted an ordinance allowing for this partial tax exemption on a city-wide basis as part of Municipal
Code Chapter 24 -Taxation. Section 24.8 of Municipal Code allows for a five-year sliding scale of
partial tax exemption (75%, 60%, 45%, 30%, 15%) for developments that meet the use definitions of
the State for R&D, Warehouse, and Distribution facilities. The City allowance, as adopted in Chapter 24
for industrial tax abatement, extends until 2030 .
The granting of the industrial exemption has been non-discretionary action since adoption of the
incentive, meaning if the project meets the State definitions and the property owner files the exemption
form with the City Assessor, it is granted. The request before the Council is new to the City in that
Chevron REG has requested preapproval of its new R&D facility at 300 S Bell Avenue to ensure
that the total value of the finished project is eligible for the industrial tax abatement. The
industrial tax exemption process is different than most tax abatement exemptions in terms of its timing.
The industrial tax exemption must be claimed in the year that an improvement is first assessed whether
the project is complete or not.
In this case, Chevron has begun its building and will have a partial improvement with a value this
January. Without a preapproval of the multi-year construction project, the incremental value of the
project that is eligible for exemption will be less than with preapproval. The preapproval process is
defined in Iowa Code 427B and allows City Council by ordinance to grant an approval that allows for
full value capture for a multi-year project. With preapproval, the property does not file for the
exemption until completion of the full project.
The Chevron building has been approved for a Minor Site Development Plan by City staff and has
received building permits to start construction of the new 42,060 square foot building. The site layout
and architectural elevations of the building are attached for reference. The approved plan complies with
zoning standards of the City of Ames.
ALTERNATIVES:
1. Approve on first reading an ordinance granting preapproval to the project referenced as 300 South
Bell Avenue for a period of three years (December 31, 2027) for completion of a building in substantial
conformance to the general site layout and building design shown in Attachment A as determined by the
Planning and Housing Director, including a certificate of occupancy from the City of Ames.
2. Decline to approve on first reading an ordinance granting preapproval of the project.
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CITY MANAGER'S RECOMMENDED ACTION:
The question of preapproval has not come before the City in the past regarding the industrial tax
abatement incentive. Without preapproval a project can still apply for the industrial partial tax
exemption for qualified real restate. However, the value of the incentive may be less when factoring in
partial improvements. With preapproval, the property owner will pay taxes on the partial improvements
and then upon completion of the full project, they will be eligible for an exemption of the full value of
the project for five years in accordance with the sliding scale. The proposed use is consistent with
City zoning standards and the intent of the City's industrial tax abatement program even though
it will not be completed within one assessment year. It should be noted that upon completion of
the building, its use will still need to comply with Iowa Code 427B requirements for exemption
eligibility. Therefore, it is the recommendation of the City Manager that the City Council adopt
Alternative#1, as described above.
ATTACHMENT(S):
Attachment A -Development Plan
Ordinance 300 South Bell Avenue.PDF
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A201 4
ORDINANCE NO.
AN ORDINANCE TO GRANT PRIOR APPROVAL FOR
AN INDUSTRIAL TAX EXEMPTION FOR AN
INDUSTRIAL PROJECT AT 300 SOUTH BELL AVENUE
BE IT ENACTED,by the City Council for the City of Ames,Iowa,that:
Section One:
"Renewable Energy Group, Inc.,has proposed an industrial construction project for the
property located at 300 South Bell Avenue in Ames. The property owners have applied for prior
approval of the partial Industrial Tax Exemption per Iowa Code 427.134(2).
A process for prior approval of an Industrial Tax Exemption for a particular property and
project is set out in Iowa Code sections 42713.4 and 427B.1, and that process has been followed.
The Ames City Council finds that the proposed project meets the requirements of Iowa
Code Chapter 427B, and Ames Municipal Code 24.8, and the project is in conformance with the
zoning plans of the City of Ames.
The partial Industrial Property Tax Exemption for this property and project is hereby
granted prior approval by the Ames City Council for a period of time ending December 31, 2027,
for completion of a building in substantial conformance to general site layout and building design
as determined by the City of Ames Planning and Housing Director, including a certificate of
occupancy from the City of Ames. The approved project will not be entitled to the exemption
unless/until the property owner files an application by February 1 of the year for which the total
value added is first assessed for the approved completed project and the project is found to be
qualified real estate."
Section Two. This ordinance shall be in full force and effect from and after its passage
and publication as required by law.
Passed this day of ,2024.
Renee Hall, City Clerk John A. Haila,Mayor
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