HomeMy WebLinkAboutA027 - Review Draft Urban Revitalization Area and Plan for the Southeast 5th StreetITEM #:21
DATE:03-25-25
DEPT:P&H
SUBJECT:DRAFT URBAN REVITALIZATION AREA PLAN FOR THE SOUTHEAST
5TH STREET URA
COUNCIL ACTION FORM
BACKGROUND:
At the November 12, 2024 City Council meeting the Council reviewed a request from Furniture Mart
USA to initiate creation of an Urban Revitalization Area (URA) for the property located at 329 SE 5th
Street to enable Furniture Mart USA to qualify for partial Commercial Property Tax Abatement. City
Council determined that proving a partial property tax abatement incentive for a furniture store
would achieve an economic development to resolve an opportunity gap of lost furniture sales to
establishments outside of Ames, a substantial sales tax leakage category. Staff has drafted a URA
Plan consistent with Council direction in November that is attached to this report.
To provide economic development incentives, the Council must enact an ordinance to establish an
Urban Revitalization Area and approve by resolution a Plan as prescribed by Iowa Code Chapter
4 0 4 . Specifically, eligibility criteria of Section 404.1 (4) allow for a City to designate an area for
economic development. Chapter 404 prescribes the requirements of a URA Plan that are summarized
herein and included fully within the attached draft Plan.
There are two properties designated as the applicable area for the URA boundary, which include the
future Furniture Mart site property at 329 SE 5th Street and the neighboring Target (Dayton Hudson
Corporation) property at 320 South Duff Avenue abutting the Furniture Mart site to the west and north.
The Target property provides an access drive to the Furniture Mart site. (See Attachment A- Location
Map) The draft Plan includes two properties because under state law an 'Area' must encompass more
than one property. Staff recommends including the neighboring Target property, as it is not separated
by roads and is zoned Highway Oriented Commercial (HOC) as is 329 SE 5th Street. Based upon other
criteria in the Plan for new construction of a furniture store, URA will otherwise have no effect on the
Target property or its operations.
The URA Plan will have a short duration to encourage the expeditious construction of a furniture store.
The Plan will terminate on April 1, 2027. The Plan includes criteria for Qualifying Real Estate to be
eligible for a five-year partial property Tax Abatement schedule. Eligibility includes:
1. New Construction of a furniture store building of at least 90,000 square feet.
2. A minimum of 81,000 square feet of the building must be used for the display and sale of new
furniture, home furnishings, and related items.
3. The improvements must be consistent with approved Site Plans, have a building permit issued by
December 31, 2025 and have a certificate of occupancy by December 31, 2026.
The abatement schedule of initial improvement value will use a sliding 5-year scale:
1
Year 1-100%
Year 2- 80%
Year 3- 60%
Year 4- 40%
Year 5- 20%
If City Council finds the attached draft Plan to be in accordance with their direction to establish a
URA, City Council will next set a date of public hearing with a minimum of 30 days of time for
public notice. The soonest date for a public hearing that meets this notice requirement would be
May 13th.
ALTERNATIVES:
1. The City Council can direct staff to move forward with the process of notification and proceed to
hold a Public Hearing for designation of a SE 5th Street URA and approval of the Plan on May
13, 2025.
2. The City Council can direct staff to modify the draft Plan and to move forward with the process
of notification and proceed to a Public Hearing on May 13, 2025.
3. The City Council can direct staff to not move forward with the process if it does not believe the
proposed Urban Revitalization Area.
CITY MANAGER'S RECOMMENDED ACTION:
In November, a market analysis report was presented that identified an approximately $5.7
million dollar opportunity gap for furniture store sales within Ames. Council agreed that creation
of an Urban Revitalization Area (URA) could be justified to help incentivize construction of a
furniture store in the community to address this sales leakage. This action helps to provide an
identified needed amenity and help sustainability by reducing trips out of the community.
Last November, City Council determined that it would like staff to proceed with drafting a URA for this
purpose. Since that time, Furniture Mart representatives have submitted for a Site Development Plan
approval with the intent of starting construction this year. Staff is finalizing a Site Development Plan
and City Council is reviewing an Alternative Landscape Plan for the Site on this same agenda.
Therefore, it is the recommendation of the City Manager that the City Council act in accordance
with Alternative #1.
ATTACHMENT(S):
329 SE 5th Street Location & URA Map.pdf
Draft 329 SE 5th Street Urban Revitalization Plan.pdf
2
HOC
A
S-GA
S DUFF AVE
SE 5TH ST
SE 3RD ST
329 SE 5th Street Urban Revitilization Area´
329 SE 5th St reet Proposed URA (Shaded)
3
URBAN REVITALIZATION PLAN SOUTHEAST 5th STREET
Iowa Code 404 allows for a City to address revitalization needs of the community through
a process of designating revitalization areas. The purpose for revitalization includes
economic development. The primary purpose of the plan is to meet economic development
goals of the City Council for this area of City that is planned for commercial development
provide a partial property abatement incentive for qualified real estate that is consistent
with the criteria of the approved plan related to new construction of a retail furniture store.
The portion of the Act codified at Section 404.1 of the Iowa Code provides that the City
Council may, by ordinance, designate an area of the city as a revitalization area, specifically
in subsection (4) for economic development.
The following is the Urban Revitalization Plan for the Southeast 5th Street Urban
Revitalization Area. The plan contents are defined by Code of Iowa Section 404.2(2) and
are provided below.
a) Legal Description: SECTION:11 TOWNSHIP:83 RANGE:24 PARCEL AG S1/2 NE
SLIDE 269 PG 5 AMES AND TARGET ADDITION LOTS 2 & 3
b) Existing Valuations:
Address Parcel
Identification
Number
Owner Assessed
Valuation
Land
Assessed
Valuation
Buildings
329 SE 5th Street 0911275100 Furn USA IA
LLC
$504,000 $0
320 South Duff
Avenue
0911210020 Dayton Hudson
Corporation
$4,649,500 $7,581,800
c) Owners and Addresses:
Address Parcel
Identification
Number
Owner Owner Address
329 SE 5th Street 0911275100 Furn USA IA
LLC
140 E Hinks Ln,
Sioux Falls, SD 57104
320 South Duff
Avenue
0911210020 Dayton Hudson
Corporation
Dayton Hudson
Corporation, PO Box
9456 Minneapolis, MN
55440
d) Existing & Proposed Land Use:
Address Existing Zoning Existing
Land Use
Proposed Land Use
329 SE 5th Street Commercial-HOC Vacant Commercial
320 South Duff
Avenue
Commercial-HOC Commercial Commercial
4
URA District Boundaries
e) City Services: City services are already available to the area. No improvement or
expansions of City services are proposed by the City for the area.
f) Applicability of Revitalization: Revitalization shall be applicable only to that
subset of eligible property within the above legal description zoned commercial and
are otherwise Qualified Real Estate for new construction of a building that meets
the Qualifying Eligibility Criteria of this Plan.
5
g) Relocation: The plan does not require the displacement of any persons, and there
will be no relocation benefits provided.
h) Tax Exemption Schedule: The exemption period is for five (5) years per a sliding
scale of abatement of improvement value as Year 1-100%; Year 2-80%; Year 3 -
60%; Year 4- 40 %; Year 5 -20%.
i) Percent Increase in Value Required: The value-added requirement is a fifteen
(15) percent increase in actual value.
j) Federal, State, or Private Grant/Loan Programs for Residential Improvements:
There are no residential improvements proposed.
k) Duration: The Plan shall expire on April 1, 2027. All projects seeking tax
abatement approval consistent with this Plan must be completed by December 31,
2026 and have filed an application with the Planning and Housing Department by
February 1, 2027. Any project approved for tax abatement as being consistent
with this Plan prior to the expiration of the Plan will continue to receive property
tax abatement per the approved exemption schedule in accordance with state law.
Additional Qualifying Criteria
In order to be determined to be Qualified Real Estate the improvements must be in
compliance with these additional Criteria during the life of the tax abatement.
1. A furniture store building of at least 90,000 square feet. For purposes of a meeting
the definition as a furniture store, a minimum 81,000 square feet of the gross floor
area must be used for the display and sale of new furniture, home furnishings and
related items.
2. The building must conform to an approved Site Development Plan, including any
approved landscape plan (reso. #____ , and have received a certificate of occupancy
from the City of Ames prior to December 31, 2026.
3. A building permit must be issued for the project by the City of Ames prior to
December 31, 2025.
6