HomeMy WebLinkAboutA001 - Council Action Form dated February 24, 2026ITEM #:26
DATE:02-24-26
DEPT:P&H
SUBJECT:RESOLUTION APPROVING A REQUEST FOR PROPOSALS (RFP) FOR
THE SALE OF SINGLE-FAMILY MARKET-RATE LOTS LOCATED IN THE
BAKER SUBDIVISION.
COUNCIL ACTION FORM
BACKGROUND:
The City Council’s affordable housing goals are to increase the supply of housing stock in the
community. The designation of a census tract in West Ames as a Neighborhood Revitalization
Strategy Area (NRSA) has provided a unique opportunity to utilize our Community
Development Block Grant (CDBG) funds to create a mixed-income housing development
known as the Baker Subdivision.
Twenty-six lots were created for single-family home development, and under the NRSA, 51%
(14 lots) are required to be specifically for low and moderate-income households. However,
the remaining 12 lots (49%) can be for market-rate housing. To date, the development of the
southern portion of the subdivision has been completed, with eight of the 14 LMI lots being
sold to Habitat for Humanity and the completion of 38 Low Income Housing Tax Credit
(LIHTC) units on lot 27.
The City is now ready to proceed with the completion of the 18 remaining lots on the north
portion of the subdivision. Of the remaining 18 lots, 6 are LMI, and 12 are market-rate.
City staff has prepared a Request for Proposals (RFP) to sell up to 6 of the 12 market-
rate lots in 2026. However, only the following lots are available to select to purchase: 9, 13,
14, 16, 17, 21, 22, 23, and 26. Lots 18, 19 & 20 have some geothermal well location concerns
that need to be resolved before these lots can be sold.
The RFP is designed to solicit offers for the purchase of lots with minimum submittal
requirements and scoring criteria to evaluate proposals. Construction on the purchased lots
will be by private parties, not the City. The RFP process would allow for an individual or a
builder to make a proposal to buy a lot(s), subject to meeting the minimum requirements of the
RFP. City Council would ultimately select the proposal(s) that best meet the interests of the
City for the construction of market-rate housing that is consistent with the character of the
area.
The market-rate lots are identified within the covenants that were approved by the City Council
for the development, see attached exhibit. The market rate lots are subject to certain
minimum standards of the covenants, regardless of the RFP process, which include:
House Size: 1-story minimum of 1200 sq. ft./ multi-story minimum of 1250 sq. ft.
Basement: Required with all homes and must have an egress window. It may be
unfinished.
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Builder Experience: Construction of a home must be done by an experienced builder
who has completed at least three homes within three of the past seven years.
Owner Occupied: The home must be the primary residence of the owner and cannot be
rented out.
Geothermal: All homes must be connected to and utilize the geothermal system for
heating and cooling.
Construction Timing: House construction must begin within 6 months of closing on the
purchase of a lot. Additionally, a home must be completed within 12 months of starting
construction.
Timing lot sales is important for two reasons. The City has to balance the timing of
receiving payment for the lots with federal requirements for spending program income
in relation to the annual timeliness test in the spring of each year. Staff believes that if
six lots are sold and the revenue from the sales of the lots occurs between July 1st and
October 1st, it would allow the City to account for this revenue with the funding of an
infrastructure project in a low-income census tract neighborhood before the date of the
timeliness test in May 2027. Otherwise, staff believes that revenue from lots sales should not
occur until after July of 2027 to again allow for time to expend the funds and meet the
timeliness test.
Additionally, it is possible that a builder may propose to buy multiple lots from the City with the
goal of seeking state Workforce Housing Tax Credits (WHTC). To be eligible for this program,
a builder would need to have a purchase agreement for at least four lots in order to apply by
the June deadline. However, notice of award of the grants does not typically occur until
August or September, and the purchase window extending to October 1st would allow a
builder to proceed. Starting construction in October is still feasible in relation to the weather as
well.
Minimum submittal requirements of the RFP include:
1. Identify the type of home design and style intended to be built on the lot.
2. Builder readiness in the form of identifying either a contractor or development entity that
meets the minimum experience requirement of the covenants,
3. Proof of financing or pre-qualification of a loan to verify financial viability to complete the
lot purchase and build a home within 12 months,
4. Identify which market rate lot(s) they desire to purchase, and
5. Date of closing with any contingencies, such as WHTC.
6. House design concept, include a limitation that if purchasing three or more lots that at
least two house plans must be provided. Additionally, no lot may have an identical
house design on an abutting lot.
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Evaluation of the proposal involves three scoring categories weighted primarily according to:
1) House design compatibility with the neighborhood (50 points)
The RFP identifies a variety of design elements that support aesthetic compatibility, including
an enclosed garage, traditional pitched roofs, covered entries, use of varied materials on
gabled faces, decorative bands and eave extensions, fenestration, facade relief, and garage
to front door relationship. The intent is to identify an overall cohesive design quality without
specifying a specific style.
2) Quantity of lots purchased (30 points)
A proposal is awarded 4 points per lot plus 1 point for closing in 2026.
3) Price of the lot (20 points).
Points are awarded on a per lot basis, not as a package for multiple lots. The highest price in
relation to the minimum lot price will be awarded the most points.
Purchase price is an important consideration related to compliance with CDBG requirements.
As an RFP, the proposal process will create a market price offer for the lots. Staff has included
a minimum sales price based upon the City investment of CDBG funds in acquisition and
development of the site.
Staff estimated total CDBG costs of $2.134 million for acquisition, Tripp Street extension, and
subdivision related improvements. Staff has estimated that 65% of the expenditures ($1.387
million) benefited the creation of the 26 single family lots and 35% for the creation of the
Creekside Townhomes affordable housing apartment site, park site, and other neighborhood
improvements.
These CDBG costs average out to approximately $53,335 on a per lot basis. Actual lots sizes
vary so a range of value per lots is more representative of the total. Staff recommends
establishing a minimum price of $50,000 with a higher cost for larger lots. The RFP
includes a list of minimum lot prices.
As an FYI, staff has had relatively recent appraisals of lots in the subdivision from 2023 and
2025 that identified a range of values between $61,000 and $75,500, but there are very few lot
sales to use as comparables, which creates some uncertainty in the actual value. Council
could elect to set higher minimum sales prices in the RFP using these appraisals even
though staff has set a somewhat lower minimum cost within the draft RFP.
If City Council approves the RFP, staff will issue the RFP by March 1st and allow for 30 days
to receive proposals. Staff has tentatively identified April 14th for review and approval of
proposals by City Council. Once a proposal(s) is selected, a notice of a public hearing and
approval of an option or purchase agreement will be required by the City Council.
ALTERNATIVES:
1. Approve the attached RFP for the sale of six (6) market-rate lots available within the
Baker Subdivision.
2. Direct staff to modify the RFP and then to proceed with the RFP for the sale of six (6)
market-rate lots within the Baker Subdivision.
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3. Take no action and request additional information or changes.
CITY MANAGER'S RECOMMENDED ACTION:
Staff believes the RFP process is the best method available to address the priorities of selling
market-rate lots and having a variety of housing types in the subdivision. It should be
emphasized that the RFP is only for to sale six (6) of the twelve market rate lots in this
first phase, it does not involve the City in the construction process of actual homes.
Staff believes the proposed timing and minimum sales prices allow for appropriate
planning and funding of other projects with the program income to meet the annual
timeliness test. Staff will return to Council with a separate discussion on how to
complete housing construction on the remaining affordable lots once this process for
market rate lots is complete. Therefore, it is the recommendation of the City Manager that
the City Council approve Alternative #1.
ATTACHMENT(S):
Recorded Restrictive Covenants Baker Subdivision-Attachment A.pdf
Draft Request for Proposals for SFH Construction Market Rate Lots-Baker Subdivision
2026.pdf
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ATTACHMENT A
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DRAFT Request for Proposal No. 2026-XXX
Request for Proposals for the Sale of
Single-Family Market Rate Lots
in the Baker Subdivision
Ames, Iowa
February XX, 2026
For questions concerning the Request for Proposal, project requirements,
and procedures, contact: Purchasing Division:
Karen Server, Purchasing Manager
Phone: 515-239-5127
E-mail: karen.server@cityofames.org
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Table of Contents
I. Introduction...................................................................................................................................3
II. General Information......................................................................................................................5
III. Minimum Development Requirements ........................................................................................6
IV. Buyer’s Minimum Responsibilities/Requirements........................................................................7
V. Financial Incentives .......................................................................................................................8
VI. Competitive Requirements and Scoring...................................... .................................................9
VII. Security Requirements .............................................................................................................. 9
VIII. Submittal Requirements ........................................................................................................... 10
IX. Review Process and Selection Criteria ……………………………………………………………………………………. . 11
X. Contract Negotiations: .............................................................................................................. 12
XI. Questions/Contact Persons: ..................................................................................................... 12
XII. Definitions .............................................................................................................................. 12
Attachment A .................................................................................................................................13
Baker Subdivision Covenant
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I. Introduction
The City of Ames, Iowa, is seeking Request for Proposals (RFP) from individuals or Buyers with
qualified, experienced single-family housing developers/builder(s) interested in the purchase of
single family lots(s) to construct single-family homes within the City-owned Baker Subdivision in
West Ames (former Ames Middle School site). This subdivision is located in the City’s first
Neighborhood Revitalization Strategy Area (NRSA), which allows for flexibility in the development
of mixed-income housing units. Additionally, as a unique opportunity, this subdivision represents
the City’s first geothermal residential development to address the City’s goals for creating
sustainable environments.
Ames, like many communities across America, has a continuing need for more affordable housing
for both low- and moderate-income and higher-income households. Using its Community
Development Block Grant (CDBG) funding, the City of Ames purchased this 10+ acre infill site for
the sole purpose of creating mixed-income housing options for the community.
The area south of Tripp Street within this subdivision has been developed with both single-family
homeownership units and multi-family townhome rental units. The area north of Tripp Street is now
being made available to build single-family homes for market-rate homebuyers.
The interested Buyer may select to submit proposals to purchase 1 to 6 of the following available
Lots 9, 13, 14, 16, 17, 23, and 26 (see map below)
The City is particularly interested in proposals that address the following objectives:
• Constructing ownership single-family homes of a size and scale compatible with the
neighborhood character based on the Covenants (see Attachment A) created for this
subdivision.
• Creating a variety of housing choice styles to address, including but not limited to ranch,
two-story, split-level, etc.
• Addressing family and workforce housing needs;
• Including design characteristics and features compatible with surrounding homes.
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Proposals will be evaluated for completeness of the required submittals and project scoring preferences
described below. City Council will ultimately review a report prepared by staff that describes the
background of the Buyer and the proposed project’s attributes. City Council will ultimately select the
proposal it finds to be most desirable for the sale of lots and construction of ownership housing within the
timeframe of this Request for Proposal but reserves the right to reject any or all proposals for development
of the site.
The City reserves the right to waive any minor informalities or irregularities, which do not address the
heart of the proposal, or to reject any and all proposals. Proposals, which take exception to the Request
for Proposal (RFP), may be considered non-responsive and may be rejected. Those submitting a
response to the Request for Proposal will receive no reimbursement from the City for time or costs for
the proposal.
General Information
The following information is provided to assist the Buyer by summarizing the important facts regarding
the criteria and format by which the Request for Proposal process will proceed.
A. Timetable of Events:
Pre-Proposal Meeting: Tuesday, March 11, 2026
1:30-3:00 p.m. (local time)
Ames City Hall Council Chambers
515 Clark Avenue, Ames, IA
-Proposal Deadline: Tuesday, March 31, 2026,
by 2:00 p.m. local time
-Final Selection (Tentative): Tuesday, April 14, 2026
-Purchase Agreements (Tentative) May 12, 2026
B. All proposals with supporting documentation must be submitted to AmesBids no later than 2:00
PM (local time) on Tuesday, March 31, 2026.
The preferred method is to submit proposals in AmesBids at amesbids.ionwave.net in the
format required, including these proposal documents with all prices and requested data
properly filled in, prior to the time and date proposals are due. If technical issues occur while
submitting the proposal, contact the Purchasing Manager for the proposal and determine an
alternate method to receive the proposal. Failure to submit the required information may
deem the proposal non-responsive. The proposal shall include an acknowledgement of receipt
of all addenda. Addenda numbers shall be filled in the proposal response.
No verbal or faxed submittals will be accepted. Submittals shall have a subject line of Request for Proposal No. 2026-XXX.
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C. Proposals may be withdrawn only by written request of the Buyer prior to the opening of the
proposals. After the opening of the proposals, all offers shall remain valid and irrevocable for a
period of 60 days from the date of the submittal and through negotiations on a final agreement(s)
with the selected Buyer(s).
D. Proposals not meeting the minimum requirements or submittal requirements will not be
considered.
E. The Site is zoned R-L (Residential Low Density). All construction must be completed in accordance
with City standards.
F. The City of Ames reserves the right to require additional information at any time during this
process to help clarify the intent of the Buyer or project details.
G. All lots are subject to covenants, see attached.
II. Minimum Development Requirements
Proposals submitted shall meet the minimum Baker Subdivision Convenance.
The City will remain flexible to allow a Buyer to create an attractive single-family home design,
however, the following minimum design requirements apply:
A. Subdivision covenants include minimum building size and design requirements for market-rate
lots. Refer to Attachment A.
B. Covenants indicate minimum builder experience requirements for home construction.
C. Covenant for each dwelling to be used as the primary residence of the Owner; no rental homes
are permitted.
D. All applicable provisions of the City of Ames Municipal Code, including Zoning Ordinances,
Subdivision Regulations, Stormwater, and Building Codes, shall apply.
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III. Buyer Minimum Responsibilities/Requirements
As part of this Request for Proposal, the Buyer agrees to the following minimum responsibilities/
requirements as part of the Request for Proposal and to develop the project:
A. The selected Buyer will be responsible for paying for the development of the site, home
construction, and construction costs for frontage improvements and infrastructure extensions
to serve the new homes, including any missing or damaged sidewalks. The City has no
responsibility for any additional costs to make the lots ready for construction or to receive a
certificate of occupancy for a completed home.
B. The selected Buyer shall reimburse the City for the cost paid to create the abstract of title to the
Real Estate.
C. Enter into a purchase agreement for the purchase of the property. The purchase agreement is
subject to further approval by the City Council under Iowa law (§364.7) and shall be completed
with the City of Ames within 30 days, unless extended, from the date of acceptance of the
proposal by the City Council.
D. The Buyer will be responsible for ensuring that the housing units are constructed on the site as
outlined in their agreement with the City of Ames.
V. Financial Incentives-Land Sale Price, Tax Abatement, Electric Rebates
A. The lot sale prices are expected to be market-rate and include a minimum price as specified
below:
Lot Number Minimum Purchase Price
B. The City has an established partial property tax abatement program for the construction of new
owner-occupied housing. Homeowners can apply for a 5-year sliding scale of property tax
abatement of 100%, 80%, 60%, 40%, 20% for the value of the home up to the first $500,000 of
value. Houses that are the primary residence of the owner and for which the owner files the
requisite paperwork by January 31, 2028, will be eligible.
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C. Ames Electric provides electrical service to the development. Ames Electric offers rebates for
certain electric equipment and appliances, including a whole-house design rebate for “net zero
ready” full electric homes. The rebates can be to the homebuilder or the homeowner. Current
information is available at the Ames Electric Smart Energy program.
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VI. Submittal Requirements
All proposals with supporting documentation must be submitted in AmesBids prior to 2:00 PM (local time) on Tuesday, March 31, 2026.
• No verbal or faxed submittals will be accepted. • Submittals shall have a subject line of RFP No. 2026-XXX for the sale of single-family lots in the Baker Subdivision.
• All late or incomplete submittals will be rejected.
A. Proposals must contain, at a minimum, the following information:
1. Buyer’s description of project readiness and experience:
a. Identify the builder, developer, or contractor that meets the minimum building
experience standard of the covenants.
b. Provide financing information for house construction to meet the building
timelines of the covenants. This may include financial statements, a lending
institution letter of support, or a pre-qualification for a construction loan from a
financial institution.
c. Proposed Closing Date(s) for the purchase of the lot with final proof of financing.
2. Identify which Lot(s) and the proposed purchase price for each lot.
a. Identify an order of preference for lots in case of multiple bids for the same lot
or if purchasing one lot.
b. Identify any specific contingencies related to completing the purchase, such as
applying for Workforce Housing Tax Credits.
3. If purchasing three or more lots, at least two different house plans must be
included. In no event can an identical house plan be on abutting lots to the side of the
lot.
a. Representative House Plan and Elevation of proposed house type(s) for design
intent. Actual building plans are not required with the proposal, but the
information on the type of house, square footage, features, etc. It is a component
of the scoring and evaluation.
4. The proposal shall contain the full name of the person, firm, or corporation
submitting the proposal and the address of the person, firm, or the president of the
corporation.
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The proposal must contain a statement to the effect that the proposal is firm for a
period of not less than 60 days after the closing date of this request and through
negotiations.
No officer, member, or any other person holding any position with the City of Ames,
Iowa, either appointed or elected, shall be or shall become interested directly or
indirectly with the person, firm, or corporation submitting a proposal or in any portion
of the profits derived by the selected Builder from this project. This exclusion does not
pertain to persons who are appointed to State-created authorities.
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VII. Review Process and Selection Criteria
A. All proposals will be reviewed by City staff for eligibility, completeness, and feasibility.
B. Proposals which meet the minimum requirements will be evaluated by the City. A proposal must be deemed responsive to the Request for Proposal to be referred to the City Council.
C. Proposals that are deemed ineligible or infeasible will not be considered and will not
be reviewed. The Buyer will be notified by e-mail.
D. Evaluation of Proposals:
Staff will review the submitted materials for completeness related to required submittals and
scoring preferences. Follow-up questions and interviews will be conducted as needed during the
review period.
House Design and Character (Maximum of 50 points)
Conceptual house plans will be awarded points based on types of features proposed with the
house that are complimentary to the residential character of the area, including: an enclosed
garage, differentiated materials for gable faces and siding, include use of decorative bans, clipped
gables, extended eave/roof elements across facades, covered porches, accentuated front entries
that are in front of garages, no recessed entries located more than 15 feet behind a garage face,
no narrow recessed entries between facades, use of traditional gabled and hipped roofs,
proportional window placement and design.
The overall combination of features creating an aesthetically balanced and desirable front facade
will be the final combined score.
Quantity of Lots and Timing (Maximum of 30 points)
Each lot purchased will be awarded 4 points, with 1 point for each lot to be purchased by October
1, 2026.
Purchase Price (Maximum of 20 points)
Scoring of proposals (Maximum of 100 points)
Purchase price will be evaluated in relation to the maximum price and the size of the lot proposed
for purchase. Each lot price will be evaluated independently, not as a combined sum if buying
more than one lot.
E. Evaluation Selection Process:
The selection of the preferred Buyer(s) will utilize the following steps:
The final selection will be based upon:
1. The City Council’s determination of the best proposal that meets the goals and objectives of the City;
2. A satisfactory agreement between the Buyer(s) and the City is finalized;
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VIII. Contract Negotiations:
The City reserves the right to reject any and all proposals and to negotiate the terms of the contract,
including but not limited to purchase price, performance timelines, and house design, with the
selected Buyer prior to entering into any written agreement.
IX. Questions/Contact Persons:
Questions concerning the content of this proposal, or the review process may be directed to Karen
Server, at City of Ames, Purchasing Division through AmesBids questions section; by email at
karen.server@cityofames.org; or by phone at 515-239-5127.
X. Definitions
Certain words or phrases in this document are critical to a thorough understanding of the objectives and
goals of the City for this project. The following definitions are offered to aid prospective Developers in
the preparation of this Request for Proposals.
A. Building and Fire Codes: Chapter 5 and Chapter 8 of the Ames Municipal Code.
B. Buyer/Builder/Developer: Any individual, corporation, partnership, non-profit organization, or
similar entity that has expressed an interest, or has been identified as having an interest, in
purchasing a lot to construct a single-family detached home for ownership purposes.
C. City: This means the City of Ames, Iowa, its elected and appointed officials, and all staff persons
employed by the City of Ames.
D. Restrictive Covenant: A provision in a deed limiting the use of the property and prohibiting certain
uses.
E. Stormwater Treatment: Chapter 5A and Chapter 5B of the Ames Municipal Code.
F. Subdivision Ordinance: Chapter 23 of the Ames Municipal Code.
G. SUDAS- Iowa State Uniform Design and Specifications
H. Submittals: Those written and graphic documents prepared by Buyers that explain the strategy,
approach, and specific elements that Buyers proposes to use in meeting the City's objectives
I. Zoning Ordinance: Chapter 29 of the Ames Municipal Code.
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form HUD-51915-A (1/2014) Previous editions are obsolete Page 12 of
ATTACHMENT A
Baker Subdivision Convents
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