HomeMy WebLinkAboutA032 - Update on Applications Received for North Ames Voluntary Annexation of Multiple Properties Generally Between George W. Carver Avenue and Hyde AvenueITEM #:33
DATE:03-11-25
DEPT:P&H
SUBJECT:UPDATE ON APPLICATIONS RECEIVED FOR NORTH AMES VOLUNTARY
ANNEXATION OF MULTIPLE PROPERTIES GENERALLY BETWEEN
GEORGE W. CARVER AVENUE AND HYDE AVENUE
COUNCIL ACTION FORM
BACKGROUND:
On January 14, 2025, City Council initiated a voluntary annexation of approximately 400 acres of land
in north Ames along George W. Carver and Hyde (see attached Annexation Area Map). The initiation
occurred after the City received annexation petitions from the Robert J. Borgmeyer Trust and Margaret
A. Borgmeyer Trust, Northridge Heights Homeowners Association, and Erben and Margaret Hunziker
Apartments, LLC, for seven properties east of George W. Carver Avenue extending to Hyde Avenue
and south of Ames Golf and Country Club (AGCC). The Borgmeyer properties represent the largest
share of property ownership within the annexation area and a new development opportunity once
annexed.
The annexation of these properties triggered consideration by City Council of:
1) including non-consenting properties in the annexation territory that would otherwise become
islands, and
2) exercising provisions of previously agreed-upon covenants for future annexation of several
contiguous properties.
Along Hyde, properties with annexation agreements include the Sturges and Iowa Natural
Heritage Foundation (INHF)-owned properties.
Along George W. Carver, North of the Borgmeyer properties, the City also has annexation
agreements with the Ames Golf and Country Club (AGCC) and the homes in the rural
subdivision known as The Irons. Previously, the City waived certain subdivision standards to
allow rural subdivisions of these properties in exchange for agreements to annex in the future at
such time requested by City Council. In the case of the Irons, City infrastructure was not
available at the time of subdivision development and covenants for future City infrastructure
installation were also entered into with the annexation agreements, this was done in order to
allow for the development to occur at that time and not wait until development would be
contiguous with the City and have extension of City utilities.
In January 2025, staff provided Council options for the phasing of the annexation and deferring
annexation of the Irons and AGCC given the number of property owners involved. Ultimately, due to
the efficiency of processing one annexation, Council decided to initiate one annexation of the
entire potential annexation territory, including non-consenting properties and properties with
which the City holds annexation agreements (see attached map of the annexation area). Council did
consider the extended amount of time this option would take in order to obtain all the required
annexation applications from those impacted by annexation agreements, which could delay the
annexation of new development areas. This report provides an update on the status and overall
projected timeline of annexation.
1
PUBLIC OUTREACH:
Since the initiation, staff sent notice to property owners affected by the annexation agreements
requesting they submit voluntary annexation applications by February 28. Due to the large number of
homeowners in the Irons, staff held a meeting on February 17 for Irons residents at the AGCC. A
couple dozen people attended in person and virtually.
Staff has since received applications for the INHF and Sturges properties. Staff also received an
application from Hayden's Preserve, LLC, for its property along Hyde.
Staff has not received an application from Ames Golf and Country Club and has received only
four applications from the 34 residential lot owners in the Irons. Two of these property owners
have requested to withdraw their applications; however, the annexation agreement waives their
right to withdraw. The homeowners' associations and the have also not submitted applications.
Feedback provided to staff at the meeting and in other correspondence indicated that some Homeowners
have a misconception that utility service was to be available prior to annexation. The agreement has no
such provision, it was to be at the direction of the City Council. In addition, there was a common
opinion that if annexed prior to the extension of utilities, they would be paying City property taxes
without being provided full city services. Staff explained at the February 17 meeting that the City
property tax levy does not cover the cost of utility services as those are chargers by utilities for usage.
Property taxes provide for other services, such as police, fire, road maintenance, etc. Staff noted that it
is very common to annex properties prior to utilities being made available.
The infrastructure agreement for the Irons indicates that annexation is to occur first, not utilities first. A
copy of the annexation agreement and infrastructure installation agreement are attached. More
information on the outreach and points of discussion from the February 17 meeting are included in the
attached addendum, as well as a summary of communications received from the AGCC and Irons
residents.
Despite this clarifying information, staff believes there is still a general unwillingness to annex,
likely related to the costs Irons residents will incur from building a sanitary sewer main to serve
their subdivision once the City extends a main to the property line, as required by the
infrastructure covenant, and from the increase in property taxes. Residents do not believe there
are any additional benefits to them from City services.
ANNEXATION STATUS:
As a result of the many of Irons property owners and AGCC's noncompliance with the
annexation agreement, at this time nonconsenting property owners total more than 20% of the
annexation area, violating the 80/20 voluntary annexation rule provided for under state statute
for voluntary annexation. Staff believes that although the agreements require them to apply for
voluntary annexation, to meet state law we must in fact have their signed applications to include
them as voluntary. See Table 1 below for a breakdown of the acreage in the annexation area.
Table 1: Breakdown of Annexation by Acreage Based on Applications Received
Consenting (Property and City
ROW)
Nonconsenting (Property,
railroad, County ROW)
2
Acres 201.39 198.41 (AGCC is aprox. 133
acres of the total)
Percent of Annexation Area 50%50%
ANNEXATION PROCESS MOVING FORWARD:
Given the lack of applications needed to move forward with a voluntary 80/20 annexation as initiated
by Council, staff seeks addition direction from Council and has prepared several alternatives for
Council to consider for how best to proceed. The alternatives described below include additional
notification, bifurcating the annexation territory into parallel processes, or to provide an incentive for
immediate participation in the process. The alternatives for annexation have also been updated to reflect
plans for residential rezoning of the Irons at the time of annexation to minimize nonconformities with
traditional Agricultural zoning.
Part of Council's consideration of these options should include the annexation timeline balanced with
the goal of establishing new development land and efficiently executing the prior agreements for
annexation. A full list of steps remaining in the annexation process and timeline is included in the
addendum. Staff identified a goal of finalizing an annexation with state approval by October 2025, to
do that Council would need to have a hearing approving the annexation on June 24, 2025. Given the
notification steps involved to get to the point of a hearing, all necessary applications and a final
annexation plat will be required in April. This timeline aligns the goal of the developer of the
Borgmeyer property to seek rezoning and development approvals in the fall to prepare for development
in 2026.
ALTERNATIVES:
ALTERNATIVE #1:
a. Maintain the current 400-acre annexation territory boundary and direct the City Attorney
to send notice requesting annexation applications from the Irons and AGCC by March 31
and notifying those who remain noncompliant that court action will be pursued to compel
performance of the covenant.
b. Initiate rezoning of the residential lots that are part of the Irons to FS-RL to be effective
upon annexation.
This option would maintain the annexation area as initiated by City Council. The ultimate goal
would be to obtain applications representing enough property to proceed with the 80/20
annexation, even if not all signed the applications. The most critical is the AGCC.
The ability to secure performance of the covenant (i.e., compel applications) through court is set out in
the annexation agreement (see attachment). This option may involve additional time if a court decision
is needed to secure applications. Staff estimates 1+ years to have the issue resolved in Civil court.
Even if all Irons residents submitted applications, the acreage would still not be sufficient to
complete an 80/20 voluntary annexation that includes the AGCC if the AGCC was nonconsenting.
As its property is 135 acres, the AGCC's application is necessary to move forward with an 80/20
voluntary annexation. An acreage breakdown of the entire annexation area based on applications
3
received and if AGCC were to submit an application is included in Table 2 below.
Table 2: Breakdown of Annexation by Acreage Based on Applications Received Plus AGCC Acreage
Consenting with no other properties
Consenting (Property and City
ROW)
Nonconsenting (Property,
railroad, County ROW)
Acres 336.79 63.01
Percent of Annexation Area 84%16%
ALTERNATIVE #2:
Split the Borgmeyer related territory annexation from the Irons Subdivision and the Ames Golf
and Country Club and proceed in parallel to:
a. Initiate an 80/20 annexation of the approximately 238 acres along George W. Carver and
Hyde related to the Borgmeyer application.
b. At the same time, initiate a 100% voluntary annexation of properties that are part of the
Irons Subdivision and the Ames Golf and Country Club by proceeding with the City
Attorney notifying those who remain noncompliant that court action will be pursued to
compel performance of the covenant. Provide an update to Council within 90 days.
c. Initiate rezoning of the residential lots that are part of the Irons to FS-RL to be effective
upon annexation.
This option was provided to Council for consideration as part of the initial initiation of the annexation.
It would involve two concurrent annexations. One would be of the four consenting Borgmeyer
properties, the consenting Northridge Heights HOA property west of the railroad, and the consenting
Hunziker, INHF, Hayden's Preserve, and Sturges properties along Hyde. It would also include
nonconsenting territory, with three properties along George W. Carver, the railroad, and four privately
owned properties along Hyde Avenue. This would be an 80/20 v oluntary annexation with
approximately 84% consenting.
Additionally, staff would also proceed with annexation of the properties that are part of the Irons
Subdivision and the Ames Golf and Country Club to the north of the Borgmeyer properties separately.
The annexation of the Irons and AGCC could be 100% voluntary, given the annexation
agreement and proper submittal of the application forms. This may require court action to
obtain. However, with only application of the AGCC for annexation, all other lots in the Irons
could be annexed as part of an 80/20 voluntary annexation, as allowed under state statute to
create more uniform boundaries. This annexation process would have all the same steps of notice,
Council approval, and state approval. This is illustrated in Table 3 below.
Table 3: Breakdown of Annexation by Acreage with AGCC Consenting and Remaining Irons Lots
Nonconsenting
Consenting (AGCC Property
and City ROW)
Nonconsenting (Other Irons
Lots, railroad, County ROW)
Acres 135.56 26.1
Percent of Annexation Area 84%16%
4
Given the number of outstanding applications from Irons residents and the AGCC, this annexation
would likely occur after the annexation of the Borgmeyer properties. As part of this option, Council
would direct the City Attorney to send notice requesting annexation applications from the Irons
and AGCC by a deadline determined by staff. Staff would provide Council with an update on this
annexation no later than 90 days from this action on the status of the applications.
ALTRENATIVE #3:
a. Maintain the current annexation territory boundary and make another request for
annexation applications from the Irons and AGCC by March 31 with an offer to transition
City imposition of taxes over three years on a 75%, 50%, 25% abatement schedule.
b. Initiate rezoning of the residential lots that are part of the Irons to FS-RL to be effective
upon annexation.
The City has offered lower utility connection fees as incentive for voluntary annexations in the past. In
this case it seems that approach is unlikely to create much interest from Irons homeowners to submit
their applications. Iowa Code for annexations allows City Council to grant an incentive to all
properties within an annexation territory, consenting and nonconsenting, for the transition of
City taxes, not to exceed a schedule set by state statute. The maximum schedule is a sliding scale
over ten years applied to the City tax rates, not other taxing jurisdiction's. A transition could be offered
over three years on a 75%, 50%, 25% schedule.
Council should note, per state statute, a transition of taxes would be required to apply to all
properties that are part of the annexation area, including the planned new development site of the
Borgmeyer property which is currently undeveloped.
This option could maintain the annexation area as initiated by City Council and be offered to all
properties part of the annexation area. If Council selected to bifurcate annexation as described in
Alternative 2, it could be applied to one or both annexations.
This option may help address Irons residents' concerns regarding increased property taxes and result in
more applications than Alternative 1.
After annexation, properties will be subject to the City of Ames levy, but no longer subject to the Rural
Service Basic levy. Other levies (school district and county) will remain. City levy rates will apply to
the 2026 valuation, payments for which are due in fall 2027 and spring 2028. County payments will
continue to apply to previous valuations.
Existing Property owners would effectively pay half of the City levy otherwise assessed over the
three-year period. Some new construction housing in the Borgmeyer development could benefit
from the transition of taxes and the current city-wide abatement program, potentially adding
some additional value to future homebuyers in that development. However, these benefits would
only apply through 2028.
In total, for residential properties in the Irons, the City would forego an estimated $152,778 in tax
revenue and gain $152,778 with the 3-year abatement schedule. This calculation does not include
the AGCC, which is classified commercial for tax purposes and valued around approximately
$3.4 million. Table 4 shows the estimated City tax payments and savings of the average residentially-
5
classified property with their 2024 valuations in the Irons under the proposed three-year transition
schedule.
Table 4: Potential Transition Schedule for City Taxes Based on Average Residentially Classified Non-
HOA Property in the Irons with 48% Rollback and 2024 Valuations
Year 1 (75%)Year 2 (50%)Year 3 (25%)Total
Average City Tax
Paid $788 $1577 $2366 $4732
Average Savings on
City Taxes $2366 $1577 $788 $4732
CITY MANAGER'S RECOMMENDED ACTION:
Alternative 1 is consistent with Council's original direction, but will likely require an extended timeline
to complete if court action is required.
If Council is concerned about delaying the development of the Borgmeyer property, Alternative 2 would
break down the annexation into two annexations. With this alternative, staff would restart the
annexation process of the AGCC and Irons and report to Council on its status within 90 days. The
Borgmeyer component would proceed immediately.
If Council determines to try and proceed quickly with an annexation, staff believes Alternative #2 is
most consistent with prior policies of the City and its existing covenants. Therefore, it is the
recommendation of the City Manager that the City Council adopt Alternative #2.
ATTACHMENT(S):
Annexation Area Map.pdf
Infrastructure Installation and Conservation Managemnet Agreement.pdf
Covenant and Agreement for Annexation.pdf
ADDENDUM.pdf
6
W 190TH ST
HY
D
E
A
V
E
G
EO
RG
E
W
C
ARVE
R
AV
E
Annexation Area
0 0.1 0.20.05 Miles ¯Legend
AMES
INCORPORATED
LIMITS
Parcels
Annexation Area
AGCC and
The Irons
Borgmeyer
7
8
9
10
11
12
13
14
15
16
17
18
ADDENDUM
ANNEXATION TIMELINE
STEP DEADLINE/DATE
City Council Action on How to Proceed March 11, 2025
Final Applications Received March 31, 2025
Final Annexation Plat April 30, 2025
Notices for PZC May 14, 2025
Consultation with County Supervisors and
Township Trustees and Other Notices to
County Attorney and Auditor as Required by
State Statute
May 15, 2025
Planning and Zoning Commission Hearing May 21, 2025
Notices and Publications for City Council
Hearing as Required by State Statute
June 4, 2025
City Council Hearing June 24, 2025
City Development Board Submittal July 11, 2025
City Development Board Application
Consideration
August 13, 2025
City Development Board Hearing September 10, 2025
30-Day Waiting Period for Annexation
Finalization Concludes
October 10, 2025
Borgmeyer Rezoning and Preliminary Plat
Planning and Zoning Commission Hearing
November 5, 2025
Borgmeyer Rezoning and Preliminary Plat
City Council Heating
November 25, 2025
BACKGROUND ON OUTREACH
After the January 14, 2025, annexation initiation, staff sent notices to AGCC and the Irons
residents. The notice to Irons residents was mailed January 31. It outlined the Annexation
Agreement that is in place and requested that enclosed annexation applications be returned by
February 28. It also invited residents to a meeting at the Ames Golf and Country Club to discuss
the annexation process and timing on February 17.
February 17 Meeting
Due to the number of residents who reside elsewhere in the winter, the meeting was also
offered via Zoom. Owners of approximately 20 of the 34 residential lots attended, as well as
representatives of AGCC and Bella Homes, the developer of the Irons subdivision.
Staff prepared a presentation and handout and provided background on why there is an
annexation agreement. AGCC is within the City’s two-mile Urban Growth Area and subject to
joint City and County subdivision review. In May 2014, the AGCC requested that the Ames City
Council grant certain waivers to the City’s subdivision standards so that they could pursue a
rural subdivision. While the City has planned to serve the area with infrastructure, the
development, approved in 2016, preceded the availability of City utilities. In return for granting
waivers, AGCC and Bella Homes signed and submitted covenants that bind current and future
19
owners to apply for annexation at the time the City requests and pay for the cost of connecting
to City water and sanitary sewer when brought to the site.
Questions and other topics discussed included:
What codes and ordinances will apply post-annexation?
Zoning Ordinance—Properties will be subject to all the zoning requirements of the City.
Residential lots in The Irons will be rezoned FS-RL (residential low-density floating zone)
concurrently with annexation.
Building Code—New additions and buildings would be required to comply with City’s
adopted Building Code(s).
Rental Code—The City requires registration of rental properties and compliance with the
Rental Code if a dwelling were to be rented.
How will my taxes change after annexation?
After annexation, properties will be subject to the City of Ames levy, but no longer subject
to the Rural Service Basic levy. Other levies, for example school district and county, will
remain. The assessor will also change to the City Assessor for valuation, likely in January
of 2026 based on the current annexation timeline.
City levy rates will apply to the 2026 valuation, payments for which are due in the fall of
2027 and spring of 2028. County payments will continue to apply to previous valuations.
How will road maintenance be handled after annexation?
Irons Court and Stange Road are publicly dedicated streets. Maintenance will be the
responsibility of the City and subject to City right-of-way standards.
Irons Way is a private street. It will continue to be maintained as a private street by the
owners.
What changes to my utility providers will occur post-annexation?
There will be no immediate changes to utility service providers (property owners will retain
Xenia, private septic, Midland, and Alliant).
Long-term, City water and sanitary sewer infrastructure will be brought to the Irons
Subdivision boundary with the development to the south. This is not anticipated to occur
for several years.
Midland and Alliant will continue to provide electricity and gas.
Am I required to disconnect from Xenia and hook up to City water service when available?
The residential lots in the Irons, except those with frontage on W 190th, are also subject to
a covenant with the City of Ames to connect to City water when available. This does not
apply to the Ames Golf and Country Club.
The water lines and mains in the subdivision were constructed to City specifications but
currently connect to a Xenia water main and receive service from Xenia. When City water
is brought to the site, property owners would be responsible for the cost of switching from
20
Xenia to the City water main. The switch will occur at one connection point (at a valve on
the water main), not individual service lines.
Am I required to hook up to the sanitary sewer when available?
The residential lots in the Irons, except those with frontage on W 190th are also subject to
a covenant with the City of Ames to connect to City sanitary sewer when available. This
does not apply to the Ames
Golf and Country Club.
There is a sanitary sewer
easement (see below map)
along the residential lots, but
no constructed main. Property
owners will be responsible for
the cost of installing a sanitary
sewer main and service lines to
the homes. Property owners
will also be required to
abandon the existing septic
systems and responsible for
related costs.
Without a design, there is not a
cost estimate. The sanitary
sewer project could be done as
a private project or potentially a
Special Assessment could be
sought. Property owners as a
whole could ask City Council to
complete the sanitary sewer
installation as a City-
administered project to be paid
back by property owners
through a Special Assessment
over several years.
Additionally, a connection fee will apply at the time of connection based on the acreage of
a property ($2,554.00 per acre after 7/1/25, 5% annual increase).
Do City property taxes pay for utilities? Is the City paying for the sewer and water infrastructure
for the developer of the Borgmeyer property?
Property taxes do not pay for City utility services. Monthly utility bills cover these costs.
The cost of extending utilities is on developers or, when extended as part of a City project,
paid for through a connection district or special assessment on benefitting properties. The
City participates in the cost of infrastructure if it is required to be oversized beyond the
needs of the area to be subdivided.
Communications Post-February 17 Meeting
After the February 17 meeting, staff and City Council received several email communications
expressing concern and/or opposition to the annexation. One was from Daryle Vegge on
February 21 indicating that the residents of Irons Way (17 attached homes in the Irons
21
subdivision) oppose the annexation and requesting that it be delayed indefinitely until necessary
to avoid the creation of an island.
Staff also received an email from the President of AGCC on February 28 indicating that the
AGCC Board had considered submitting the annexation application at a Board meeting. They
indicated that they were under the misconception that the annexation request would not occur
until utilities were available and asked several other questions to which they requested answers
before they agreed to apply. Questions included:
1. Can you share how the legal process of annexation works regarding a property such as
AGCC which has been in existence in Story County since the early 1970s?
2. How will this annexation affect property taxes? It's our understanding that AGCC would
be required to pay approximately 20% more in property taxes beginning the year
following annexation yet the utilities will not be available at that time. Why should AGCC,
as well as The Irons, be subjected to a substantial increase to property taxes when the
full-spectrum of city services isn't available at that time?
3. With regards to Property Taxes, specifically for AGCC, can you provide a detailed
description of the property tax break-down if annexed into the City of Ames? What
specific services does AGCC then receive as a result of annexation?
4. Regarding the valuation assessment of the AGCC property, can you provide details as to
how AGCC will be assessed going forward.
On March 3, staff responded. Staff provided information on the process for annexation and
indicated that it was not different for previously developed properties. Staff also provided
information on when City tax payments would be due (approximately 20 months after
annexation) and a Story Couty tool to estimate taxes. Staff also provided a breakdown of the
City levy and the services it covers, indicating that property taxes do not pay for City utility
services.
Staff has not heard back from AGCC representatives or received an application.
22