HomeMy WebLinkAboutA044 - Staff Report on Developer Incentive Requests for Residential DevelopmentITEM #:47
DEPT:P&H
May 27, 2025
Staff Report
DEVELOPER INCENTIVE REQUESTS FOR RESIDENTIAL DEVELOPMENT
BACKGROUND:
City Council has recently implemented a number of pioneer infrastructure projects for water
and sewer extensions needed to serve three out of the four planned growth areas with the use
of the American Rescue Plan Act (ARPA) funds. These projects included two sewer extension
to the west, a short water main extension south, a large trunk line extension south, and a
sewer main extension east to commercial areas on E. 13th Street.
In addition to City initiated projects, City Council directed staff to propose options for a City
policy related to Pioneer Infrastructure and Oversizing costs related to new development that
is also consistent with Ames Plan 2040. Evaluating a policy for infrastructure incentives
is the last follow up item from the AEDC Short Term Housing Taskforce Letter from the
Winter of 2024. City Council has already completed adoption of the requested city-wide
ownership housing property tax abatement incentive and modifications to the Conservation
Subdivision Ordinance in response to the AEDC letter.
In addition to the 2024 letter, a number of developers have approached staff this spring
requesting consideration of development incentives to facilitate construction of
subdivisions within the Growth Areas of the City. The status of the development projects
range from previously approved master plans/subdivisions to pending annexation.
At this time there are five current development projects with various types and
magnitude of requests for financial assistance (See Attachment with overview of
project). The requests range from direct construction of infrastructure by the City to waiver of
collecting various fees.
Details of each request and staff's preliminary estimate of cost to the City is included
within the attachment. Providing all of the requested incentives will impact the
General, Park Development, Water, Sewer, and Road Use funds.
All together, the preliminary costs estimates of these requests total $9,970,000 to
$11,400,000, depending on the water territory buyout calculations. Some of the
developer's requests also suggest that in addition to direct assistance, use of Tax
Increment Financing (TIF) may be necessary to close financial gaps for the projects. To
support use of the TIF for developers, the developers support exempting their
developments from the city-wide property tax abatement program incentive.
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PROJECT SUMMARIES
Hayden's Preserve
This development is a 170 acre site with Master Plan approval for up to 620 units. The
developer intends to propose increasing the total units of this site to approximately 650 units
with a split of approximately 540 single family and 110 multi-family, along with 5.5 acres of
commercial. The single family is a combination of townhomes and detached single family.
The developer is focused on a first phase concept of development that could include 50
detached lots, 176 townhomes, and 110 apartment dwellings.
The developer's total ask is estimated at $3.5 million to $4.7 million, depending on water
territory buyout calculations. The developer indicates that this level of financial
support is needed to make development of the site competitive with sites they are
developing in other communities.
Auburn Trail
This development is 70 acres on the west side of Hyde with a master plan approval for 181
single family dwellings. The developer intends to increase density to approximately 200 units.
A first phase of development is unknown at this time.
The developer's total direct ask is estimated at $486,000 to $736,000, depending on
water territory buyout calculations. They also indicate that there is potentially an
additional financial gap depending on the final layout of the project and total number of
units to be developed.
Greenbriar
This development is a 150 acre site that is currently under consideration for annexation. At
the time of initiation of annexation in January, staff noted that infrastructure improvements
related to sewer, roads, open space would need to be addressed in a development agreement
at the time of annexation. No agreement has been reach as of yet, but he developer has
closed on purchase of the site.
Additionally, no land use plan for development has yet been approved for the site. Based upon
the Ames Plan 2040 designations, it will include commercial, multi-family, and single family
attached and detached homes. Staff estimates the plan may include 450 + dwelling units,
split between 250 multi-family units and 200 single family units, plus 5-8 acres of
commercial land.
Development of the site requires extension of an east west sewer from Hyde Avenue
that is related to the Hayden's Preserve project timing. The overall timing of Greenbriar
and the sewer extension is unknown and to be reviewed further this summer with the
developer.
The developers have indicated that a first phase of single family homes could be
started next year without the Hyde trunk line extension if a "slip lining" project for a
sewer segment in Moore Park is completed independent of the Hyde sewer extension.
Staff estimates the slip line project is $250,000 and could serve the southwest quadrant of the
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site, which may yield capacity for 100+ single family housing units.
Staff has considered an option to reserve area in a first phase of development to site a future
4th fire station facility. Such a facility is not in the CIP, but reserving an opportunity to locate a
smaller station house concept could be important as Greenbriar progresses.
The developer's total direct ask is estimated at $4.3 million, plus additional park
development costs that are not yet estimated. Additionally, the developer believes that
even with the requested infrastructure assistance that the project is not financially
feasible without an opportunity to generate a 20% return on investment of the land
development. Therefore, they claim that a TIF rebate may also be required to develop
the project.
Bluffs at Dankbar Farms Corner Outlot
This site is 20 acres in size and has been planned for 6 acres of commercial and single family
residential as part of the currently approved annexation and rezoning agreements related to
the residential development of the Bluffs at Dankbar Farms located further west.
The development agreement required turn lane access for the site and noted limited sewer
capacity for the site unless the developer made improvement to increase capacity. Based
upon meetings with the developer, they intend to apply for rezoning to 6 acres of commercial
and 14 acres of FS-RM to allow for senior living. Staff has not completed the evaluation of the
proposed use changes regarding sewer capacity or other needs such as emergency response
times for senior living.
The developer's direct ask is estimated at $1.2 million to complete turn lanes along
Cameron School Road and GW Carver. Because of the existing agreements, the
developer is required to make these improvements with the next Bluffs plat and
development of the corner site, which is anticipated to be within the upcoming year.
The developer indicates that the City assistance would facilitate a quicker rate of
development for their project and potentially the Bluffs to the west.
Domani I
The project has an approved PRD plan that is partially built out. The extension of Cottonwood
is triggered with the next phase of development. The approved agreement requires the
extension at the expense of the developer. The remaining two phases include 11 additional
Domani lots and 12 custom home lots for a total of 23 lots.
The developer's direct ask is estimated at $371,000 for the cost of the Cottonwood
extension as a 31-foot residential collector street.
OPTIONS:
While the initial assignment to staff was to evaluate policies regarding Oversizing and
Pioneer Infrastructure, it appears that even by introducing these two policies not all of
the financial assistance requested from the five developers would be consistent with
such policies because the requests also relate to development specific impacts.
As Council reviews these requests, it will need to consider:
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1) What types of development issues should receive City financial assistance?
2) What type of land use (single family, multi-family, commercial) should be prioritized,
if any, when determining who would receive financial assistance?
3) Should there be a priority given for near-term housing opportunities (for example,
within three years) to receive financial assistance?
4) What is the maximum amount of financial assistance to which the Council would be
willing to commit to each year to accommodate the developers' requests? (By total
amount or by each fund)
STAFF COMMENTS:
Although no specific decision is expected with the presentation of this report on May
27th, staff does hope to gain some understanding of the City Council's interest in a
policy for infrastructure assistance and financial limitations of the City.
This direction will assist staff with formulating options for future meeting to address
the developer requests in total, or by a specific development project or infrastructure
types.
Uniquely, the Greenbriar project is in the annexation process right now. Although City Council
directed staff to negotiate a development agreement concurrent with annexation, that has not
been possible to complete due to financial incentive requests. The annexation hearing will be
on June 10th, at that time Council may choose to continue with the annexation and defer a
development agreement until a late date or it could hold off on annexation until the
development agreement is finalized. Staff will recommend on the 10th to continue with
the annexation and defer the agreement until time of a rezoning request when more is
known about the project and its feasibility.
ATTACHMENT(S):
Development Project Overviews.pdf
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Development Overviews
•Hayden’s Preserve
•Auburn Trail
•Greenbriar (former Borgmeyer farm property)
•Commercial Area of Bluffs at Dankbar Farms
•Domani I (south)
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North Development Area
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South Development Area
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Hayden’s Preserve
•City complete east west sewer trunk line
•City pay for road creek crossing
•City complete turn lane improvements
•City reduce collection of water/sewer connection fees related to undeveloped open spaces (aprox. 21%)
•City reimburse developer for park land
•City waive traffic signal fair share payment
•City purchase Xenia Territory Buyout in lieu of developer
•City construct off-site trail along Hyde (Sturges/INHF property)
•Potential for TIF as developer rebate, exempt site from property tax abatement program
Existing Master Plan and Development Agreement- maximum of 620 units total for 170 acres
Proposed to change Master Plan, allow for more, townhomes, single family, reduce MF, keep commercial
Phase 1-Proposed 176 townhomes, 50 SF lots, 84 Multi Family Units, 24 MF units 5ac commercial
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Auburn Trail
•City purchase Xenia Territory Buyout in lieu
of developer
•City waive traffic signal fair share payment
•City reimburse developer for park land
•Developer did not identify other specific
costs reductions noting there may still be
a potential gap
•Proposed TIF as developer rebate for other
reimbursements, exempt site from
property tax abatement program
Approved Master Plan Zoning and
Development Agreement
Allows for single family dwellings
180-200 units projected
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Greenbriar
•City complete east west sewer trunk line to west side of Railroad
•City assist in extension of trunk line west through the property
•City complete off-site Moore Park sewer slip lining for first phase development
•City purchase Xenia Territory Buyout in lieu of developer
•City construct Stange Road Extension
•City construct all GW Carver improvements for turn lanes, shared use path, traffic signal
•City acquire parkland from developer
•Potential for TIF as developer rebate, exempt site from property tax abatement program
•NOTE-City may have an interest in acquiring site for temporary Station 4 facility, developer is willing to sell a property for a station house
Initiated Annexation, to include development agreement for sewer, road improvements, parkland, etc.
Plan 2040 designates as RN-4 for walkable mixed use and density neighborhood
Development Concept- 5-8 acres commercial//200 Multi Family Units//250 single family attached/detached dwelling types
Phase 1- May include SF units and/or Commercial
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Bluffs at Dankbar Farms
•City complete Cameron School and GW Carver improvements for Turns Lanes and any needed widening
•Traffic study indicated a need for an additional lane to create left turn lanes at Cameron School Rd and for turning access to the site.
•Previously evaluated roundabout option that was preferred improvement but deemed to not be feasible for a single developer. City accepted a traffic signal plan as future improvement. Developer has contributed to traffic signal already.
20 Acre Outlot corner of GW Carver/Cameron School
Approved Development Agreement for Developer paid Road and Sewer costs
Development Concept- 6 acres commercial and Change zoning to FS-RM for Senior Assisted Living (Staff evaluating impacts of proposed change to City resources)
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Domani I
Request-City construct extension of
Cottonwood as 31-Foot Street
Approved PRD Plan-
Final two phases include Domani Lots and
larger custom lots
Total of 23 Single Family lots to be platted
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Ansley
Cedar Lane is unpaved south of Middleton
Road. Council agreed to waive developer
requirement with future phase to pave south
of Middleton. Half of the paving cost is an
obligation of ISU. Estimated City cost for ½ of
project was $250,000.
Development Agreement for paving is
pending. Developer to provide engineered
drawings for City to bid and construct road at
a time determined by City Council
Approved PUD and Plat
Previous approval by Council of Cedar Lane paving
May request sidewalk waivers or deferrals in the future
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Financial Estimates -Hayden’s Preserve
Hayden's Preserve 170 ac
Preliminary City Cost
Estimates
Source Of Funds Options,
If a share is the City
15 Inch Sewer INHF Segment 1320 ft $ 792,000 ARPA/Sewer Fund
12 Inch Sewer Developer Use 900 ft $ 360,000 ARPA/Sewer Fund
Shared Use Path INHF/ Sturges 1320 ft (offsite gap)$ 250,000 ARPA, GO Bonds/Road Use
Greenway trail bridge already city cost future, previously agreed Park Development Fund/Grant
Water Connection Fees July 1 $1,689.00 /ac Reduce 21% for Open Space $ 60,297 Water Fund/no collection
Water buyout (Xenia) renegotiated per acre 4k assumption ($1.2 million
savings for developer if not City)$ 680,000 Water Fund
Sewer Connection Fee July 1 $2,554.00 /ac Reduce 21% for Open Space $ 91,178 Sewer Fund/no collection
Trafic Signal Bloomington (does not escalate)$ 85,000 ARPA, GO Bonds/Road Use
Turn Lane Hyde Into Site $ 200,000 GO Bond/Road Use
Park value of land 30k for 5.5 acres $ 165,000 Park Develoment Fund
East West Road Crossing Culvert $ 750,000 GO Bonds/Road Use
Total Ask Amount of City Assistance $ 3,534,748
Also requesting 10 years TIF up agreed upon limit for each Phase of
development
May propose redesign that also increases density of units to a total of 650
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Financial Estimates -Auburn Trail
Auburn Trail (70 acres west of Hyde)
Preliminary City
Cost Estimates
Source Of Funds Options, If
a share is the City
Traffic Signal-Off Site Bloomington/Hyde (escalates per year)$ 106,000 ARPA, GO Bonds Streets
Water buyout (Xenia) renegotiated per acre assumption ($250k
savings for developer if not City)$ 280,000 Water Fund
Park land purchase and improvements $ 100,000 Park Develoment Fund
Other unspecified requests
Total Ask Amount of City Assistance $ 486,000
Other requests or savings estimated at $400,000 depending on final
site design and unit counts//May request TIF
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Financial Estimates -Greenbriar
Greenbriar 155 acres
Preliminary City Cost
Estimates
Source Of Funds Options, If
a share is the City
Stange Collector Street Extension 3300 ft $ 1,800,000 GO Bonds/Road Use
Off site 12 inch sewer - ARPA/Sewer Fund
Off site 15 inch sewer - ARPA/Sewer Fund
12 Inch sewer extension under RR 500 ft to this site $ 250,000 ARPA/Sewer Fund
Sewer Connection Fees $4,419.00 /ac $ 662,850 Sewer Fund/no collection
Water Connection Fee (none required)none NA
On site sewer size 12 inch 500 feet oversized $ 150,000 Sewer Fund/GO Bond
Construct Slip Line of Sewer in Moore Memorial for 1st Phase $ 250,000 ARPA/Sewer Funds
Offsite Traffic Improvements(e.g. turn lanes, signal costs)$ 820,000 GO Bonds/Road Use
City acquisition of parkland and improvements no estimate available Park Develoment Fund
Xenia water buyout at $3000 per acre, previously negotiated $ 450,000 Water Fund
Total Ask Amount of City Assistance $ 4,382,850
Request for TIF rebate for remaining infrastructure costs, developer
estimate of $4,000,000 of potential need
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Financial Estimates -Bluffs at Dankbar
Bluffs at Dankbar -20 Acres (6 ac commercial and 14 ac senior living)
Preliminary City
Cost Estimates
Source Of Funds Options,
If a share is the City
Cameron School Road and GW Carver Turn Lanes $ 1,200,000 GO Bonds/Road Use
Total Ask Amount of City Assistance $ 1,200,000
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Financial Estimates -Domani I
Domani I-(23 single family units remaining)
Preliminary
City Cost
Estimates
Source Of Funds Options, If a
share is the City
Constructed Cottonwood Road as 31 foot Residential Collector Street $ 371,000 GO Bonds/Road Use
Total Ask Amount of City Assistance $ 371,000
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