HomeMy WebLinkAboutA047 - Hearing on Establishing an Urban Revitalization Area and Plan for properties located at 329 SE 5th Street and 320 South Duff AvenueITEM #:54
DATE:05-13-25
DEPT:P&H
SUBJECT:PUBLIC HEARING ON ESTABLISHING AN URBAN REVITALIZATION
AREA AND PLAN FOR PROPERTIES LOCATED AT 329 SE 5TH STREET
AND 320 SOUTH DUFF AVENUE
COUNCIL ACTION FORM
BACKGROUND:
City Council reviewed a draft Urban Revitalization Area (URA) at its March 25 City Council
meeting. Council set a date of hearing for May 13 to consider approval of the URA and Plan.
Additionally, Council directed staff to follow up with Furniture Mart representatives regarding
establishment of a pedestrian easement at the northwest corner of the site in coordination with
Target.
Furniture Mart USA has requested Council 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. 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)
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. 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 404. 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.
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, the 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:
New Construction of a furniture store building of at least 90,000 square feet. 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. 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.
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The economic incentive is partial property tax abatement schedule of: Year 1- 100% Year 2-
80% Year 3- 60% Year 4- 40% Year 5- 20%.
PEDESTRIAN EASEMENT:
At the March meeting Council discussed options to improve pedestrian access along the west side of the
site, which abuts Target's driveway that extends to SE 5th Street. A full sidewalk improvement was
determined to not be feasible at this time as it would require use of Target's property, which is not a
party to the application. Troy Eichmann of Furniture Mart indicated to Council a willingness to
consider an easement suggested by staff to improve access to a CyRide stop on Target property.
Staff has been in contact with Mr. Eichmann since the last Council meeting and reviewed a schematic
pedestrian crossing for the northeast corner with him. Although the design is likely acceptable to
Furniture Mart, a final easement agreement has not yet been completed. Furniture Mart has
requested staff make contact with Target and continue to work on the concept with them,
preferring to provide an easement if Target consents as well.
Based upon timing, staff indicated that may or may not work and an easement could be drafted
that is conditional if necessary to secure an option now for the sidewalk crossing that could
eventually be coordinated with Target at future date when Target triggers site improvements.
Staff will provide an additional update to Council prior to third reading and approval of the URA.
ALTERNATIVES:
1. Approve on first reading an ordinance designating the URA and approving a resolution for the
URA Plan as proposed.
2. Direct staff to modify the proposed URA Plan and place on a future agenda for approval.
3. Decline to approve the URA and Plan.
CITY MANAGER'S RECOMMENDED ACTION:
Staff has prepared the proposed URA as directed by City Council in March and taken the necessary
notification and publication actions to bring this item to Public Hearing. No changes to the draft have
been made. At the time of writing of the report no public comments have been made to staff about the
proposal.
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.
Therefore, it is the recommendation of the City Manager that the City Council adopt Alternative #1, as
described above.
ATTACHMENT(S):
Attachment A- 329 SE 5th Street Location URA Map.pdf
Attachment B- Urban Revitalization Plan 329 SE 5th.pdf
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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)
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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
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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.
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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.
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