HomeMy WebLinkAboutA001 - Council Action Form dated March 25, 2025ITEM #:20
DATE:03-25-25
DEPT:P&H
SUBJECT:PARTNERSHIP WITH AMES REGIONAL ECONOMIC ALLIANCE TO
IDENTIFY A DEVELOPER FOR SURPLUS CITY LAND AT HARRISON AND
WELBECK INTERSECTION
COUNCIL ACTION FORM
BACKGROUND:
The City owns a property located on the west side of the intersection of Welbeck and Harrison in north
Ames. The property was originally anticipated to be used as right-of-way for a street crossing of the
railroad tracks, but no companion right-of-way was created on the west side of the tracks at this
location.
Since the land no longer has any potential street use, the City Council requested staff explore the
possibility of developing an infill housing project at the site. Supporting infill housing is consistent with
economic development goals of the City for production of additional housing in support of needed
expansion of workforce for current and expansion of industry and business in the City and region.
City Council reviewed potential housing opportunities for this land on May 14, 2024 (Location Map
Attached). Subsequently, City Council directed staff on June 25th to proceed with issuing a Request for
Proposal (RFP) for development of the site. At that time, City Council determined the site should be
built with 5-12 dwelling units, attached or detached, and include a covenant for owner-occupied
housing. Council did not require, but indicated a preference, for a project that could be high efficiency
and all electric. Council did not indicate a housing cost or income limitation for development of
housing on the site. The land would be made available to a developer for little as $1, depending on the
proposal.
Subsequently, the City received no proposals last summer for development of the site. Planning
staff reached out to handful of perspective developers that received the RFP and found a variety
of reasons for not submitting based upon timing and capacity of the developers to take on such a
project.
Since that time, staff has been in contact with the Brenda Dryer from the Ames Area Economic
Alliance to discuss opportunities to support additional housing construction within the City. It should
be noted that she has worked successfully with other communities in Story and Boone Counties to
assist builders with submitting applications to the State for Workforce Housing Tax Credits to
construct ownership housing. Brenda believes that potential builders she has worked with in the past
might be interested in the site for construction of ownership housing utilizing the state Tax Credit
program.
WORKFORCE HOUSING TAX CREDIT PROGRAM:
The state Workforce Housing Tax Credit program is competitive grant program for builders of housing
that offers certain sales tax rebates and an income tax credit of up to $15,000 for housing in urban areas.
Owner-occupied housing applications must include at least four lots.
1
The program has a cost cap for construction of $310,000 to maintain consistency with its purpose of
workforce housing and not luxury housing. There is no household income limit for purchasing the
home. Timing for the program is important since applications are only accepted once a year and a
builder must have control/option to buy of a site for the proposed housing construction.
Applications are due in June and results are typically released in August. A builder cannot incur any
costs for construction until notice of award. The application must include a specific site, concept plans
for the project, and a resolution of support from the local community that identifies a local match worth
at least $1,000 per house will be provided. The local match can be dedicated land, tax abatement, or
other financial consideration.
MEMORANDUM OF UNDERSTANDING (MOU):
To accomplish this new housing development, the parties are proposing entering into a
Memorandum of Understanding (MOU) that allows Brenda to exclusively seek out a qualified
developer and builder for the site, rather to once again issue a RFP to solicit interest from those
wishing to develop this site.
The intent is to follow the parameters established last year with the RFP and to have Brenda identify a
single-qualified developer to acquire the site for housing construction. Additionally, the intent is for
housing to be built under the Workforce Tax Credit program, which focuses on moderately priced
housing and provides financial rewards to the builder for constructing such houses.
A summary of other terms includes:
Development of 8-12 dwellings, attached or detached, under FS-RL zoning or PUD Overlay
Owner occupied
Average sale price targeted at $300,000 or less
Developer incurs cost of development of the site
Target construction starting October 2025
Participation in the state Workforce Housing Tax Credit program
Consider designing homes as high efficiency all electric homes, subject to Ames Electric rebate
programs
City commits to offering land for sale at a price as low as $1
City commits to resolution of support for a selected development project to apply for Workforce
Housing Tax Credits
City local match will come in the form of the existing city-wide Owner-Occupied Housing Tax
Abatement program
Staff believes that this new strategy is a good option to secure a developer for the site since the
RFP process last year was unsuccessful.
The proposed MOU is attached for Council's review. It should be emphasized that if a developer is
identified, a formal developer agreement would be needed to proceed with the sale of the land and
development of the project.
2
ALTERNATIVES:
1. Approve the attached Memorandum of Understanding with the Ames Regional Economic
Alliance.
2. Modify the proposed MOU.
3. Decline to approve the MOU and provide alternative direction to staff.
CITY MANAGER'S RECOMMENDED ACTION:
The RFP process in 2024 did not yield a proposal for housing development at the site located at
Welbeck and Harrison. Staff found that it was difficult to attract interest in the site based upon the
property size and the proposed timing of its development. Additionally, it was difficult to attract
attention to the site for builders that had not worked in the community previously.
Utilizing this new strategy that allows identifying an interested developer and working through
options with that one developer is a reasonable approach at this time to successfully develop this
site.
In addition, requiring participation in the State Workforce Housing Tax Credit program should
yield the type of workforce housing the City Council is seeking for the community. Therefore, it is
the recommendation of the City Manager that the City Council approved Alternative 1.
ATTACHMENT(S):
Harrison Welbeck Location Map.pdf
MOU Housing -City March 2025.docx
3
SITE
CHARACTERISTICS
•Site Acreage –
1.8 acres
•Existing Zoning –
Residential Low
Density Zone (RL)
•Lot J - Bloomington
Heights West Plat 3
•Conveyed to the
City of Ames in 2004
4
Memorandum of Understanding for Harrison Road
Development between the City of Ames (City) and the Ames
Regional Economic Alliance (Alliance)
Upon execution of this agreement between the above two entities the following are
mutually agreed upon terms for the development of property located at Welbeck Drive
and Harrison Road within the Bloomington Heights subdivision. The intent of the
agreement is for the Alliance, represented by Brenda Dryer, to identify a developer of
ownership housing for the purpose of City selling the land to the identified developer
upon presentation of a conceptual development plan.
The Alliance will work to attract a housing developer who will:
-Subdivide this property into a market rate single family housing subdivision with
FS-RL base zoning, which may include a rezoning to a PUD Overlay.
-Develop the subdivision, including extending street, utilities, and storm water
infrastructure at their expense.
-Develop at least a minimum of 8 and no more than 12 single family attached or
detached homes.
-Target a projected average sale price for each home to not exceed $300,000.
-Enact a covenant for owner occupied housing in the subdivision that each home
will be the primary residence of the owner.
-Develop the project in accordance with City standards and requirements.
-Target first home construction starting on or before October 31, 2025.
-Consider the opportunity to design and construct high efficiency, all electric
homes, subject to availability of Ames Electric rebates for such home design and
equipment within each home.
The City will:
-Offer the land for as low as $1 to the identified developer to encourage this type
development of infill housing.
-Agree to provide a resolution of support for the selected developer’s application
for State of Iowa Workforce Housing Tax Credits for the 2025 funding cycle and if
needed for subsequent funding cycles.
-Utilize the existing Citywide Ownership Housing Urban Revitalization Area 5-year
sliding scale property tax abatement of 100%, 80%, 60%, 40%, 20% as the
required local match for the State of Iowa application.
Agreed upon this date ______ March 2025 by:
__________________________________________________
Mayor, John Haila Daniel A. Culhane, President & CEO
City of Ames Ames Regional Economic Alliance
5