HomeMy WebLinkAboutA028 - Staff Report on 608 Burnett Zoning Text Amendments and Incentive RequestITEM #:32
DEPT:P&H
May 12, 2026
Staff Report
608 BURNETT ZONING TEXT AMENDMENT AND INCENTIVE REQUEST
BACKGROUND:
On April 12th, City Council identified consideration of the request from Luke Jensen for
changes to development standards and for incentives regarding a project at 608 Burnett as a
priority for the Planning Division. The developer seeks a number of related changes to
facilitate redevelopment of a parking lot into a 4-story 38-unit +/- apartment building including a
new property tax abatement option.
608 Burnett is a Neighborhood Commercial (NC) zoned property located midblock between
6th and 7th Street. All of the blocks between 6th and 7th Street from Clark to Duff are also
zoned Neighborhood Commercial. See map below. The developer notes the site was identified
as a potential housing location within Ames Main Street's "Downtown Guiding Vision."
This area has the highest concentration of NC zoning in the City and is a hybrid transitional
zoning district for commercial and residential uses. The NC contrasts greatly in its mix of uses
and design requirements compared to the Downtown Service Center (DSC) that applies to the
traditional Downtown Area south of 6th Street. Both areas have a “Core” land use designation
within the City's Ames Plan 2040 (see page 62) reflecting the existing Downtown and
commercial types of land uses as wells as the general planning for intensification of
commercial mixed use in this area.
ZONING CHANGES:
Although NC zoning allows for apartments, several current standards differ from the
concept of the developer. Staff believes the most pertinent issues would include
building height, roof type, floor area ratio, setbacks, certain design guidelines, and the
parking rate. The developers sees the project as “Downtown Housing” and desires
standards more akin to DSC zoning for parking and setbacks, but without other requirements
for mixed use that exist in DSC.
The priority policy issues for zoning changes are likely the requested parking
reductions, along with building height and design requirements. The developer seeks
approval of a parking rate of approximately 1 space per unit, for up to 2-bedroom units.
If this were to be the standard, parking would be 38 spaces, where otherwise 60 spaces
would be required based upon the conceptual mix of units as described to staff. The
developer proposes for some parking to be within a ground floor podium and the
remainder as uncovered parking lot. The building would not extend the width of the lot
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lot, but instead it would be perpendicular to the street. The outdoor parking lot would
be subject to standard landscaping setback and tree requirements.
The height and design issues are a question of Council's intent for the area as a
transition from traditional Downtown to the Old Town residential neighborhood to the
north and what a compatible type of structure would be, if it did not meet the current
requirements. There are examples of other taller buildings in this area and based upon final
design elements the idea of a 4-story structure could be found to meet the goals of the City for
this area. Upper floor step-back and roof design could be important considerations if allowed
as a 4-story building. A project of this size in NC would require a public hearing and approval
of Special Use Permit by the Zoning Board of Adjustment, which addresses overall building
size and design compatibility along with function of a site.
The developer intends to put ground floor space along Burnett to shield the parking podium
from the street. The area may be a residential unit or residential amenity space, it is not likely
to be commercial space.
INCENTIVES:
Staff has not reviewed any specific developer justification or pro forma for the project. The
request states city requirements have additional costs and incentives are needed. At this
point staff does not know what these costs are that are different compared to anywhere else in
the community. The level of requested abatement (10 Year at 75% abatement) exceeds
any other incentive option that exists in the DSC or CSC zoning districts, which are
similar areas that allow for larger redevelopment projects.
Since this request has been made, the State has made changes to how property tax
incentives and New Valuations are accounted for within the General Levy. These
property tax changes could have long term impacts to City budget where the
incremental improvement value would never be included as New Valuation.
Additionally, the proposed 10 year 75% abatement schedule is not a current schedule utilized
within Ames. If Council believes some incentives are appropriate as requested, there are
issues to be addressed about how it can be best accomplished. This issue of incentives
with a proposed 10-year 75% tax abatement must be explored in greater detail for its
ramifications to all of Downtown and other URAs.
If City Council were to extend the Downtown URA boundary to include this site, it has options
for a 3-year 100% tax abatement or a maximum 10 year partial sliding scale tax abatement,
which is consistent with other URAs in the City. Additionally, the Downtown URA qualifying
criteria assume a mixed-use building and conformance to Downtown Design Guidelines that
may or may not fit the project as proposed.
Creating a new URA would require at least two properties to be included in accordance with
state law, the 608 Burnett site may meet this prerequisite as the site appears to be two lots,
but shown as one property at this time. With a new URA, City Council could choose the
qualifying criteria and abatement schedule. However, under current law if a custom schedule
is created it may also be required to be offered for other URAs as well.
The developer also plans to seek Workforce Housing Tax Credits (WHTC). Note that per the
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state WHTC program requirements, some form of local match per unit is required to support
the application. For a 38 unit project, a value of at least $38,000 is needed. It would appear
one year of tax abatement would be worth at least $38,000 under current state taxation and
abatement policies, if the project exceeds a value of $5 million.
OPTIONS:
Option 1- Explore changes to zoning standards for all NC zoned properties between 6th
and 7th
The site is one of many similarly situated NC zoned properties between Duff and Clark. If City
Council does not believe the current NC zoning is adequate to address current uses,
transitions, and planned limited levels of redevelopment, changes as requested by the
developer would be appropriate. This option would explore potential changes on a district
basis and may result in a wholly new special purpose zoning district to an updated concept of
Downtown transition.
This option would need outreach and consultation with owners in the area and the Old
Town neighborhood to the north. Prioritization in the work plan would be required.
Option 2 - Explore changes to zoning standards intended to address the Burnett site
only at this time
The same types of issues would be considered, but the result would likely be more generic in
its applicability to NC zoned properties and rely upon the current Special Use Permit process
to assess future projects.
This process likely includes less consultation because of the assumption of the Special
Use Permit process allowing for public comment at a public hearing for the specific
type of project. Therefore,
this option likely takes less time than Option 1 because it is focused on this particular
request and not other potential interests for this area, but is still needing to be
prioritized with the work plan because of the significance and number of desired
changes.
The Developer would propose the changes as a Zoning Text Amendment. This is the
Developer's preferred option due to the potential of a sooner approval than Option 1.
Option 3 - Current Zoning- No Changes
The Developer could construct an apartment building within the standards of the current
zoning of NC with no changes by City Council. The overall building size would be smaller
primarily due to limitations related to height and accommodation of parking on site to serve the
use. Current NC design standards would apply, and the project would require ZBA approval
as a Special Use Permit.
Option 4- Financial Incentives
Separate from zoning issues, is the question of financial incentive amount, type, and qualifying
standards. As mentioned above, the rationale and process that would best fit the project is not
fully fleshed out at this time. If tax abatement is offered, a site specific URA that conforms
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to standard abatement schedules would be consistent with other projects and the least
likely to have ramifications to other URAs.
As noted above, the recently adopted budget legislation by the State Legislature will have
some long term impacts related to incentives and, therefore, a more in-depth discussion about
the City Council's use of tax incentives before any decisions about future abatement or TIF
incentives are offered.
Option 4 - Workforce Housing Tax Credit Support
The developer has requested the City support an application to the state for workforce housing
tax credits. A letter of support would address that the City will provide for at least $1,000 of
financial assistance per unit and that the zoning will allow for the use, or it is in the process of
being changed. The WHTC application needs to be submitted by the applicant by June 10th
at 4:30 p.m. If Council is interested in considering a letter of support, a draft letter could be
placed on a future agenda for Council approval, but a source of funding ($38,000) would have
to be identified.
STAFF COMMENTS:
The developer has presented his concept at a Old Town Neighborhood meeting to get
preliminary feedback. Staff did not attend this meeting.
The question is not whether infill housing should be allowed on this site. The idea for
infill housing is consistent with the City's Ames Plan 2040 and Ames Main Street's
Downtown Guiding Vision. However, the questions that need to be answered are the
details of what is intended with redevelopment in this area. Although the request is
intended facilitate this project, staff believes the questions brought up by the developer have a
broader application for discussion of all of the area adjacent to Downtown between 6th and
7th, Duff to Burnett.
The requested zoning changes do not currently fit well within any specific type of
zoning that already exists. Staff has not presented a specific approach on what to do at
this point and would await City Council’s direction on scope to define exactly what type
of zoning amendment(s) would be best between changes to NC zoning or a new type of
Zoning District applied to his area. With any option, work plan prioritization is needed,
for which the developer is requesting to be an immediate priority.
The issues of zoning and financial incentives are distinct elements of the developer's request.
City Council can choose to address Options related to one or both of the requests.
Regardless of the selected option(s), final approval of zoning changes, incentives, and
a project are unlikely to occur in the next 60 days, as requested by the developer.
It should be noted that a representative from the United State Postal Service (USPS)
contacted staff to gain an understanding about the proposed project. The USPS currently
has month to month lease for the property and utilizes 54 parking spaces on the site for mail
truck and employee parking. They have expressed concerns about impacts to their
operations if they cannot continue to lease the property. However, the issue of a lease
is a matter for the owner and USPS that does not involve the City. Potentially some City
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parking lot spaces could be leased on a multi-year basis for the mail trucks, but not enough to
accommodate their total need. To date there has been no formal proposal for parking from
USPS.
ATTACHMENT(S):
608 Burnett Zoning.pdf
L. Jensen - Burnett Site Referral.pdf
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Zoning Map Excerpt
608
Burnett
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Hall, Renee
From:Diekmann, Kelly
Sent:Friday, April 10, 2026 2:11 PM
To:Hall, Renee
Subject:Non-Agenda Luke Jensen Burnett Site Referral
Renee, please include in the Non-Agenda Packet this week.
On Wed, Apr 8, 2026 at 2:49 PM Luke Jensen <luke@resgi.com> wrote:
Mayor and Council,
I’m reaching out regarding the Downtown Ames vision plan presented and CC (maybe)
adopted last year. I’m interested in bringing forward a high-density, urban multifamily
project that supports the goal of creating a true “18-hour downtown.” Increasing
downtown residents to support retail, restaurants, and activity makes total sense. We
need more people living downtown to build on the current energy.
I have identified a development site at 608 Burnett which is currently a .5 acre parking
lot. My plan includes roughly 38 modern rental units comprising studios, 1 beds and 2
bed units. There would be some amenity space for residents along with both structured
and surface parking. The property would be geared towards urban dwellers who
appreciate and value the location and proximity to the urban core area along with
employment and entrepreneurial opportunities. Additionally, the draw is strong towards
cultural and civic opportunities in the area.
The property is located in the Neighborhood Commercial zoning district. This zoning
needs some modernization to meet the goals of the Downtown Ames vision
plan. Specifically, we need to look at the following ( I think can be achieved in a text
amendment):
Building height/stories-I need to go taller to create some density given the scarcity
of the available land. I am proposing a 4 story building with a flat roof. Roughly 42’-
45’ tall.
Parking: parking ratios are outdated and far too automobile dependent. As the
parking requirements stand today I am ~20 spaces short of meeting the
standard. I’m trying to supply adequate parking of 1 space per unit. Many of the
residents will choose this area as there are far more multimodal transportation
opportunities being in the urban core.
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Updated and competitive Development Toolkit
o Urban Revitalization Tax Abatement
At today’s land and construction costs and market rents, a project that
meets the City’s urban design expectations does not financially pencil
without meaningful economic tools in place.
I am proposing a 10 year 75% tax abatement program. This would get
some immediate revenue to the city and not wait 7-10 years like some
of the other communities programs.
I believe Ames is ready to see downtown momentum and I believe we need one project to
"go" to give courage and confidence in market support and viability.
I’m ready to move a high quality project forward. I request the council and staff support on
zoning modifications as well as tax incentives and support for the Iowa Workforce
Housing Tax Credit Application.
Lastly, timing-I have a 120 day due diligence timeline from March 1st. I need to move
quickly and decisively to get confidence in the project's viability. The Workforce Housing
Tax Credit application due date is June 10, 2026.
Thanks,
Luke
Kelly Diekmann
Planning and Housing Director
515.239.5400- main| 515.239.5181 direct|
kelly.diekmann@cityofames.org | City Hall, 515 Clark Avenue | Ames, IA 50010
www.CityofAmes.org | ~ Caring People ~ Quality Programs ~ ExcepƟonal Service ~
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