HomeMy WebLinkAboutA001 - Council Action Form dated May 27, 2025ITEM #:38
DATE:05-27-25
DEPT:P&H
SUBJECT:PURCHASE OPTION AND TAX CREDIT LETTER OF SUPPORT FOR
SURPLUS CITY LAND AT HARRISON ROAD AND WELBECK DRIVE
COUNCIL ACTION FORM
BACKGROUND:
O n May 13, the City Council reviewed a proposal from the Keystone Equity Group (KEG)
advanced by the Ames Regional Economic Alliance (AREA) for development of 12 homes on
the surplus City land east of the intersection of Harrison Road and Welbeck Drive (Location
Map and Concept Plan Attached). City Council determined the proposal was consistent with
its infill housing development goals and set a date of hearing regarding an option agreement
for the sale of the site for $1 to KEG in recognition of the plans to submit the project for
approval of Workforce Housing Tax credits for ownership housing.
Staff has prepared an option agreement for the purchase of the property. Additionally, the
Council is being asked to approve a resolution of support for the state's workforce Housing
Tax Credit program (Resolution Attached).
The Option Agreement includes a number of contingencies before the closing on the
purchase of the property:
1. Developer must apply for and receive approval of state Workforce Housing Tax credits.
2. Developer must enter into a future development agreement for terms of the sale
consistent with the March MOU, such as development of 12 ownership housing units,
energy efficient all-electric homes, timing to proceed with subdivision and construction,
etc.
3. Developer must complete all entitlements and receive a Final Plat approval by
December 31, 2025.
Upon completion of these requirements, the Developer will be able to close on the
purchase of the site for $1.
PUBLIC NOTICE:
The sale of public land requires a public hearing before the sale can be approved. A notice of
public hearing was published in the Ames Tribune. Planning staff provided additional mailed
notice to neighborhood property owners that were previously invited to a 2024 neighborhood
meeting regarding development of the site. Approximately 110 notices were sent.
At prior meetings, neighborhood members spoke against development of the site, valuing it as
informal open space.
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ALTERNATIVES:
1. Approve the attached Option Agreement and Resolution of support for the state
Workforce Housing Tax Credit program. Note the developer will need to fully execute the
document to allow for it to be recorded.
2. Make modifications and approve the Option Agreement and Resolution of support.
3. Hold a public hearing and request additional information from staff with no approval at
this time.
4. Deny approval of the Option Agreement and Resolution of support.
CITY MANAGER'S RECOMMENDED ACTION:
The City Council has previously adopted a goal for the development of additional infill housing.
An interested developer has been identified, and a design concept has been prepared that
provides for 12 ownership units to be constructed on this property. Therefore, it is the
recommendation of the City Manager that the City Council adopt Alternative #1, as described
above.
ATTACHMENT(S):
Harrison Welbeck Location Map.pdf
Harrison CONCEPT LAYOUT.pdf
Ames Resolution Supporting Workforce Housing Tax Incentive Application for Keystone
Equity.docx
Option Agreement.pdf
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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
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RESOLUTION NO. X
A RESOLUTION IN SUPPORT OF WORKFORCE HOUSING TAX CREDIT INCENTIVE
APPLICATION FOR SUBMISSION TO THE IOWA ECONOMIC DEVELOPMENT
AUTHORITY (IEDA) FOR A HOUSING PROJECT BY KEYSTONE EQUITY IN
AMES, IOWA
WHEREAS,Keystone Equity, has requested support from the City of Ames for its application to the
Iowa Economic Development Authority (IEDA) for state tax incentives under the Workforce Housing Tax
Credit Incentive Program in support of the construction of 12 affordable owner occupied housing units in the
City of Ames; and
WHEREAS,the Keystone Equity project will address a critical need for affordable owner occupied
housing in the City of Ames; and
WHEREAS,the IEDA’s Workforce Housing Tax Credit allows tax incentives for developers that
include a refund of sales, service or use taxes paid during construction; and
WHEREAS,Keystone Equity intends to apply for Iowa Workforce Housing Tax Credits to support its
plan that includes the construction of 12 affordable owner occupied housing units within the City of Ames
; and
WHEREAS,the City of Ames will support the creation of the 12 affordable owner occupied housing
units with a $1 land incentive as well as 5 year sliding scale tax abatements.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF AMES,
IOWA:
Section 1.The City of Ames offers its full support for the Keystone Equity housing project in Ames, Iowa, and
the associated Workforce Housing Tax Credit Incentive Application to the Iowa Economic Development
Authority.
Section 2.The City Council authorizes City staff to assist in the preparation of the application and related
materials deemed necessary for the submission.
Section 3. The Mayor and the City Clerk authorized and directed to sign any forms required to evidence the
City’s support for the application by the Keystone Equity as described above, upon approval of the same by the
City Attorney.
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PASSED, ADOPTED AND APPROVED this 27th day of May, 2025
APPROVAL BY MAYOR
I hereby approve the foregoing Resolution No. X by affixing below my official signature as Mayor of
the City of Ames, Iowa, this 27th day of May, 2025.
_______________________
John Haila, Mayor
ATTEST:
___________________________
Renee Hall, City Clerk
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OPTION AGREEMENT
THIS AGREEMENT, made and entered into on this _______ day of May 2025, (the
Effective Date”), by and between Keystone Equity Group, L.L.C., and Iowa limited liability
company, whose address for the purpose of this Agreement is (the “Buyer”) and the City of Ames,
Iowa, a Municipal Corporation, (the “City”) whose address for the purpose of this Agreement is
515 Clark Avenue, Ames, IA 50010. Buyer and the City are individually a “Party” and jointly the
“Parties” to this Option Agreement.
WHEREAS, the City owns the real property legally known as “Lot J, Bloomington
Heights West Plat 3, Ames, Story County, Iowa” (the “Real Estate”).
WHEREAS, Buyer desires to obtain an option, in accordance with the terms herein, to
purchase the Real Estate from the City, subject to the terms outlined below.
WHEREAS, the Parties have reached an agreement on the terms and provisions for the
option to purchase and wish to herein reduce their agreement to writing for formal execution and
acknowledgement.
IT IS THEREFORE AGREED as follows, to-wit:
1. Optioned Property: City hereby grants to Buyer the exclusive right of option to
purchase the Real Estate legally described above, subject to the contingency described
in paragraph 3 below.
2. Option Payment: City hereby acknowledges as consideration for this option, the
receipt of the sum of ten dollars and no cents ($10.00), plus the mutual covenants and
agreements contained herein, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged.
3. Option Term: Buyer shall have the exclusive right to exercise the option for a period
no earlier than August 1, 2025, following and contingent upon the following: (1)
S P A C E A B O V E R E S E R V E D F O R O F F I C I A L U S E
Return document to: City Clerk, 515 Clark Avenue, Ames IA 50010
Document prepared by: Victoria A. Feilmeyer. City of Ames Legal Department, 515 Clark Ave., Ames, IA 50010 – 515-239-5146
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Buyer’s timely application and successful award from the Iowa Finance Authority of
Workforce Housing Tax Credits (“WHTC”) to construct ownership housing upon the
Real Estate pursuant to Buyer’s timely application in the 2025 WHTC cycle, and (2)
Buyer’s receipt of Final Plat approval by the Ames City Council by December 31,
2025, for a major subdivision upon the Real Estate. In the event either condition fails
for any reason, the Option shall expire, and neither Party shall have any further rights
and/or duties hereunder. Notwithstanding the foregoing, Buyer shall have no right to
exercise the Option after December 31, 2025.
4. Purchase Price: The purchase price to be paid by Buyer at Closing shall be one dollar
and no cents ($1.00).
5. Closing: Unless the Parties mutually agree to a deferred date, possession shall be
delivered and closing shall occur within thirty (30) days after Buyer exercises said
option, executes the below noted Development Agreement, and receives from the City
of an abstract showing marketable title. Recording fees shall be the responsibility of
the Buyer.
6. Access to Real Estate: City agrees that during the Option Term, Buyer and Buyer’s
employees, designated agents and contractors shall have the right upon 24 hours
advance notice to the City to enter the Real Estate for purposes of conducting any
inspections and/or tests as provided hereunder. Buyer, at its sole expense, may inspect
and make soil and other tests at any reasonable time during the Option Term. Buyer
agrees to repair any damage to the Property caused by Buyer’s exercise of its rights
under this section. Buyer shall indemnify and hold City harmless with respect to all
costs and expenses (including, without limitation reasonable attorneys’ fees) incurred
by City due to Buyer’s (i) entry onto the Real Estate, and (ii) failure to repair any
damage to the Real Estate caused by Buyer’s entry onto the Real Estate. In the event
the Buyer does not exercise the Option granted herein, the indemnity granted by Buyer
to the City shall survive this Agreement.
7. Development Agreement: This Agreement is further contingent upon both Parties
executing a Development Agreement acceptable to the City and approved by the Ames
City Council prior to Closing. The Development Agreement shall be drafted and
recorded by the City and shall effectuate the terms and covenants contained in a
Memorandum of Understanding attached as Exhibit ‘A’ which was approved on March
25, 2025, by Resolution No. 25-122.
8. Abstract and Title: The City agrees to deliver forthwith to Buyer for Buyer’s
examination an abstract of title to the Real Property continued to the date of this
Agreement showing merchantable title in conformity with this Agreement, Iowa State
Bar Association’s Iowa Land Title Standards, and Iowa land title law. The City shall
advance the costs of preparing an abstract of title for Buyer’s examination. After
Buyer’s examination, the abstract shall be held by the City. Provided that the Parties
close this transaction as set forth in paragraph 5 herein, Buyer shall reimburse the City
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for the cost paid to create the abstract of title to the Real Estate. Seller shall deliver the
abstract to Buyer. The City agrees to pay for any additional abstracting which may be
required by acts, omissions or change in the legal status of the City occurring before
delivery of deed.
9. Real Property Taxes. The City shall be responsible for all property taxes, if any, due
on the property prior to the closing date. After the closing date, Buyer agrees to pay,
before they become delinquent, all other real property taxes levied upon the Real
Property.
10. Assessments: City shall pay all assessments which are liens as of the date of closing.
11. Insurance: City shall retain liability insurance on the premises until the date of closing
when possession is transferred to buyer.
12. Deed: At the time of closing, the City shall execute and deliver to Buyer a Deed
without Warranty conveying to Buyer the City’s interest in the real property.
13. Condition of the Property: City shall maintain the Real Property in the condition
substantially the same as it exists on the date of this Agreement until the date of
Closing, except as provided by this Agreement and except for ordinary wear and tear.
14. Failure to Exercise Option: In the event Buyer fails or neglects to timely exercise the
option or in any other manner fails to timely fulfill the terms of this Agreement, all
sums paid to the City shall be forfeited to and become the property of City and neither
party shall have any further rights or claims against the other.
15. Assignment: It is expressly agreed and understood that neither Party shall assign their
interest and/or benefits of this Agreement without first obtaining prior written consent
from the other Party. Either Party may choose to refuse consent of said assignment for
any reason or for no reason at all.
16. Successors and Assigns: Should either party agree to allow an assignment of this
Agreement, this Agreement shall become binding upon and insures to the benefit of
successors and assigns.
17. Entire Agreement: This instrument constitutes the entire agreement between the
parties with respect to the subject matter thereof and supersedes all prior oral or written
agreements, statements, representations, and promises. No addition to or change in the
terms of this Agreement shall be binding upon the parties unless it is expressed in a
writing signed by the parties.
18. Modification of Agreement: Any modification of this Agreement or additional
obligation assumed by either party in connection with this Agreement shall be binding
only if evidenced in writing signed by each party.
19. Interpretation: This Agreement shall be governed exclusively by and construed in
accordance with the laws of the State of Iowa. The paragraph headings in this
Agreement are for convenience only and in no way define or limit the scope or intent
of any provisions of this Agreement. This Agreement may be executed in any number
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of counterparts, each of which shall be regarded as an original and all of which shall
constitute but one and the same instrument.
20. Venue: Venue for any dispute shall be in the appropriate state or federal court in the
State of Iowa.
KEYSTONE EQUITY GROUP, L.L.C.,
an Iowa limited liability company,
Dated ___________________, 2023.
By:
Khoa Bui, Manager
STATE OF IOWA, COUNTY OF _____________, SS.:
This instrument was acknowledged before me on ____________________, 2025, by Khoa Bui, as Manager
of Keystone Equity Group, L.L.C.
NOTARY PUBLIC
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Passed and approved on ________________________. 2025, by Resolution No. 25-________ adopted by
the City Council of the City of Ames, Iowa.
CITY OF AMES, IOWA
By:
John A. Haila, Mayor
Attest:
Renee Hall, City Clerk
STATE OF IOWA, COUNTY OF STORY, SS.:
This instrument was acknowledged before me on _______________________, 2023, by John A. Haila and
Renee Hall, as Mayor and City Clerk, respectively, of the City of Ames, Iowa.
NOTARY PUBLIC
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