During last week’s Pella City Council meeting, a resolution was approved and ordinance were adopted in regards to Amendment No. 5 to the Pella Business Corridor Urban Renewal Plan.
On December 4, 2012, Council approved a conditional resolution in support for the Overland Property Group’s proposed Section 42 Housing Development referred to as the Mills Farm Housing Development. This housing project will consist of a 32-unit affordable housing complex in the Viewpoint subdivision in Pella, adjacent to the Sports Page Grill and across from the Ulrich dealership. The estimated cost of the development is $5.2 million.
Since Council’s approval of the conditional resolution of support last December, the Iowa Finance Authority has awarded housing tax credits for the project, and the developer intends to proceed with constructing the project. Therefore, in order to comply with the previously approved conditional resolution of support, the City needed to create a new urban renewal area for the project. The reason a new urban renewal area is needed is because the proposed property tax rebates for the project are projected to occur over a fifteen year period of time which exceeds the remaining years left in the Pella Business Corridor Urban Renewal Plan. As a result, the Pella Business Corridor Urban Renewal Plan needed to be amended to remove the proposed housing development from its boundaries. Likewise, City Council also needed to create a new urban renewal area for the proposed housing development.
The resolution that was approved adopts the proposed Amendment No. 5 to the Pella Business Corridor Urban Renewal Plan. This Plan, also referred to as “the Pella Business Corridor TIF District, was adopted in February 2003 and may be amended from time to time to respond to development opportunities. Amendment No. 5 is being proposed to remove Parcel B and Parcel C of Lot 2 of the View Pointe Subdivision from its boundaries, which is the Mills Farm Housing Development. In addition, Amendment No. 5 also identifies the following infrastructure projects in the plan which are intended to comply with new state requirements for TIF financing.
According to the ordinance which was approved and adopted, the portion of taxes each year in excess of the base period taxes for the Amended Pella Business Corridor Urban Renewal Area (Amendment ‘mo. 5 to the Pella Business Corridor Urban Renewal Plan) shall be allocated to and paid into the special tax increment fund established by the City, which will be our Pella Business Corridor TIF Fund.
In related matters, the council also approved a resolution and adopted an ordinance in regards to the Mill Farm Housing Urban Renewal Plan.
This resolution determines an area of the City to be an economic development area, designates such area as appropriate for urban renewal projects, and adopts the Mill Farm Housing Urban Renewal Plan. The area consists of Parcel B and Parcel C of Lot2 of ViewPointe Subdivision. In addition, the primary proposed urban renewal project in this Plan involves providing incentives to assist with the cost of constructing a new Section 42 development called “The Reserves at Mill Farm”.
According to the ordinance which was approved and adopted, it will provide that the portion of general property taxes levied and collected each year in excess of the base period taxes for the Mill Farm Housing Urban Renewal Area be paid to a special tax increment fund established by the City to pay incentives to the developer as determined by a future development agreement.
A resolution Approving and Authorizing Execution of a Development Agreement by and Between the City of Pella and Mill Farm Partners, LLC was also approved by council.
The approval of the development agreement is subject to the final adoption of Ordinances No. 879 and No. 880 which are related to the removal of property from the Pella Business Corridor Urban Renewal Area and the creation of the Mill Farm Housing Urban Renewal Area Development Agreement.
Development Agreement Terms
-Mill Farm Partners, LLC (Developer) will build a 32-unit affordable mufti-family complex in the View Point subdivision in Pella. The project will contain 16 3-bedroom units and 16 2-bedroom units, as well as a clubhouse. The units will be Section 42 housing with a portion consisting of Low or Moderate Income Units for families or persons with a physical or mental and/or developmental disability. The construction of the minimum improvements will require an investment of approximately $5.2 million.
-The Developer experts completion of the project by December 31,2014.
-The Developer will maintain units as Section 42 Housing for at least 30 years- In addition, the Developer agrees not to convert any of the units to Section 8 Housing.
-The Developer is required to meet all City requirements for zoning, public infrastructure, and other required legislative processes.
-The resolution approves support totaling $310,000, with $290,000 in the form of property tax rebates through tax increment financing. The remaining $20,000 would be in the form of development fee waivers (i.e. building permit fee, engineering review fees, etc.).
-The resolution limits the TIF rebates to a fifteen year period of time.