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Setting a Public Hearing to approve the Bies Drive Urban Revitalization Plan Amendment 1_InitiateCity of Dubuque City Council Meeting Copyrighted February 5, 2024 Items to be set for Public Hearing # 03. ITEM TITLE: Setting a Public Hearing to approve the Bies Drive Urban Revitalization Plan Amendment 1 SUMMARY: City Manager recommending City Council set a public hearing for February 19, 2024, for the Bies Drive Urban Revitalization Plan Amendment 1. RESOLUTION Setting a public hearing to amend the Bies Drive Urban Revitalization Area Plan SUGGESTED Receive and File; Adopt Resolution(s), Set Public Hearing for February DISPOSITION: 19, 2024Suggested Disposition: ATTACHMENTS: Description Type MVM Memo City Manager Memo Staff Memo Staff Memo Resolution Setting Hearing and Publication Resolutions Amended Plan - Redlined Supporting Documentation THE C Dubuque DUjIBQTE WAWca 914 Masterpiece on the Mississippi YP pp aoo�•o 13 zai7*20*�oi9 TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Public Hearing & Approval of Bies Drive Urban Revitalization Plan Amendment 1 DATE: January 31, 2024 Housing & Community Development Director Alexis Steger is recommending City Council set a public hearing for February 19, 2024, for the Bies Drive Urban Revitalization Plan Amendment 1. I concur with the recommendation and respectfully request Mayor and City Council approval. v Mic ael C. Van Milligen MCVM:sv Attachment CC' Crenna Brumwell, City Attorney Cori Burbach, Assistant City Manager Alexis Steger, Housing & Community Development Director Wally Wernimont, Planning Services Director Jill Connors, Economic Development Director THE CITY OF DUB EE Masterpiece on the Mississippi TO: Michael C. Van Milligen, City Manager Dubuque AA-Amedca City .F 2007 - 2012 - 2013 FROM: Alexis M. Steger, Housing and Community Development Director DATE: January 29, 2024 RE: Public Hearing & Approval of Bies Drive Urban Revitalization Plan Amendment 1 Introduction This memorandum presents information necessary for the February 19t", 2024, public hearing regarding the proposed Bies Drive Urban Revitalization Plan Amendment 1. Background In October 2022, the City Council approved housing incentives, such as the designation of Urban Revitalization Districts, to increase the number of housing units in the city. The city is projected to have a housing shortage of over 1,100 units unless the rate of new housing developments significantly increases. The incentives approved by the City Council aim to increase the number of available housing units to decrease this shortage. The Petition for Bies Drive Urban Revitalization Plan was provided to City Council on September 19, 2022. At that meeting, the City Council set a public hearing for November 7, 2022. The petition was received from Joel Callahan for the proposed construction of a market -rate multi -family housing development. The Urban Revitalization Plan provided up to 10 years of tax -abatement on new construction of multi -family housing units within the designated area. The abatement percentage decreased over the 10-years according to the following schedule: of Exemption-..-. PercentageYear of Value Exempted Year 1 Year 2 Year 3 80% 70% 60% Year 4 50% Year 5 40% Year 6 40% Year 7 30% Year 8 30% Year 9 20% Year 10 20% Discussion Iowa legislation changed Iowa Code Chapter 404 since the adoption of the Bies Drive Urban Revitalization Plan. The changes no longer allow for the 100% abatement of all property taxes imposed, and instead require the school tax portion be paid on the entire value of the property. This change decreases the amount of benefit for developers by approximately 40%. The change is in effect for all improvements made in an Urban Revitalization District starting January 1, 2024. In Iowa Code Chapter 404, the city is allowed to provide a different schedule for abatement if that schedule does not exceed the maximum amount of 100% abatement for 10 years on residential property. To ensure developers in the Bies Drive Urban Revitalization Area can receive the same amount of tax abatement as they were prior to the legislative change, the city is proposing the following schedule for abatement in the Bies Drive Urban Revitalization Area Plan: Yearof ExemptionA..-. Year 1 Percentage of Value Exempted 85% Year 2 85% Year 3 85% Year 4 85% Year 5 85% Year 6 85% Year 7 85% Year 8 85% Year 9 85% Year 10 85% Dubuque offers 100% abatement for up to 10 years when affordable housing is created, so the amended plan will also be updated to reflect that option for developers. Chapter 404 provides for a public comment period prior to amending an urban revitalization plan. Therefore, city staff is requesting a public hearing be set for February 19, 2024, to adopt the amended plan. Recommendation I respectfully request the City Council hold a public hearing on February 19, 2024, to consider the amended plan as provided. Cc: Crenna Brumwell, City Attorney Wally Wernimont, City Planner Jill Connors, Economic Development Director Prepared by Crenna Brumwell 300 Main Street Suite 330 Dubuque IA 52001 563 583-4113 RESOLUTION NO. 26-24 A RESOLUTION SETTING A PUBLIC HEARING TO AMEND THE BIES DRIVE URBAN REVITALIZATION AREA PLAN WHEREAS, the City Council finds that development of housing and residential development, including single or multifamily housing in this location is appropriate and necessary in the interest of the welfare of the residents of the City, and the property substantially meets the criteria for Urban Revitalization according to Section 404.1 of the Code of Iowa; and WHEREAS, the City Council wishes to amend the Bies Drive Urban Revitalization Area Plan to provide a tax abatement schedule equivalent to the schedule provided prior to Iowa Legislation changes made in 2023; and WHEREAS, the Iowa Code requires a public hearing to amend an Urban Revitalization Area Plan. NOW THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. The City Clerk is directed to publish notice of a public hearing on the adoption of an amended Urban Revitalization Plan for the Bies Drive Urban Revitalization Area to be held on February 19th, 2024, at 6:30 p.m. in the Historic Federal Building in Dubuque, Iowa, 350 W. 6T" Street, Dubuque, Iowa and that said notice shall generally identify the area covered by the Plan and the general scope of the Urban Revitalization Plan activities planned for such area. Passed and approved this 5tn day of February, 2024. Attest: Adrienne N. Breitfelder, City Clerk NOTICE OF PUBLIC HEARING OF THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA, ON THE ADOPTION OF AN AMENDED URBAN REVITALIZATION PLAN FOR THE BIES DRIVE URBAN REVITALIZATION AREA PUBLIC NOTICE is hereby given that the Dubuque City Council will conduct a public hearing on the 19th day of February, 2024, at 6:30 p.m., in the Historic Federal Building, 350 W. 6th Street, 2nd floor, Dubuque, Iowa, at which meeting the City Council proposes to take action on the adoption of an amended urban revitalization plan for the Bies Drive Urban Revitalization (the "Plan") under the authority of Chapter 404, Code of Iowa, as amended. The property which comprises the revitalization area within which the Plan shall be applicable consists of only properties located within the Bies Drive Urban Revitalization Area, legally described as Lot 1 of Roger F. and Kathleen A. Klauer Family Place in the City of Dubuque, Iowa, according to the recorded plat thereof. Chapter 404, Code of Iowa, as amended, and the Plan authorize the City to provide property tax exemptions for property on which improvements have been made. At the meeting, the City Council will receive in -person and virtual comments from any resident or property owner of said City to the above action. The official agenda will be posted the Friday before the meeting and will contain public input options. The City Council agenda can be accessed at: https://cityofdubugue.novusagenda.com/AgendaPublic/ or by contacting the City Clerk's Office at 563-589-4100, ctyclerk@cityofdubuque.org. At said time and place of public hearings all interested citizens and parties will be given an opportunity to be heard for or against said proposal. Written comments regarding the above public hearings may be submitted to the City Clerk's Office via email at ctyclerk@cityofdubuque.org or by mail to City Clerk's Office, City Hall, 50 W. 13th St., Dubuque, IA 52001, before said time of public hearing. At said time and place of public hearings the City Council will receive any written comments received by the City Clerk's Office before said time of public hearing. Copies of supporting documents for the public hearings are on file in the City Clerk's Office and may be viewed Monday through Friday between 8:00 a.m. and 5:00 p.m. Individuals with limited English proficiency, vision, hearing, or speech impairments requiring special assistance should contact the City Clerk's Office at (563) 589-4100, TDD (563) 690-6678, ctyclerk@cityofdubuque.org as soon as feasible. Deaf or hard -of -hearing individuals can use Relay Iowa by dialing 711 or (800) 735-2942. Published by order of the City Council given on the 51h day of February 2024. Adrienne N. Breitfelder, City Clerk Bies Drive Urban Revitalization Plan 1.0 Introduction The following plan describes certain provisions of the Iowa Urban Revitalization Act for the Bies Drive Urban Revitalization Area. The State of Iowa, under Iowa Code Chapter 404, allows cities to designate areas as urban revitalization districts. Under this Act, improvements to qualified areas may receive a total or partial exemption from property taxes for a specified number of years. The exemptions are intended to stimulate private investment by the reduction of tax increases related to property improvements. Once an area is deemed to meet the requirements established in Chapter 404, a plan must be established which identifies the district boundaries, property owners, existing conditions, proposed plans and the basic abatement provisions for the revitalization area. Iowa Code Chapter 404.1 lists five reasons for which a city or county may establish urban revitalization plans. These include: 1. The existence of numerous buildings that are dilapidated or deteriorated, detrimental to the public health, safety, or welfare of the area 2. An area challenged by the presence of a substantial number of deteriorated or deteriorating structures along with additional other defective or unsafe conditions impairing the provision of housing 3. An area in which there is a predominance of buildings or improvements which by reason of age, history, architecture or significance should be preserved or restored to productive use. 4. An area which is appropriate as an economic development area as defined in section 403.17. 5. An area designated as appropriate for public improvements related to housing and residential development, or construction of housing and residential development, including single or multifamily housing. The Bies Drive Urban Revitalization Plan will be based upon the need for the encouragement of housing and residential development. 2.0 The Area 2.1 Location Exhibit A identifies the location of the Revitalization District in the City of Dubuque. The area encompasses an undeveloped parcel situated on Bies Drive. Bies Drive Urban Revitalization Plan Adopted October 2022 Amended January 2024 Page 2 of 6 2.2 Zoning Lot 1 of Roger F. and Kathleen A. Klauer Family Place in the City of Dubuque, Iowa, was re -zoned per ordinance 39-21 as PR -Planned Residential on November 15, 2021 to accommodate multi -family structures. 2.3 Existing and Proposed Land Use The subject property has been an undeveloped wooded area with no structures on the site, undeveloped greenspace, and temporary parking for adjoining properties. The proposed land use is multi -residential for a multi -family structure. 2.4 Assessed Valuation and Owners of Records 2022 Valuation and Owner of Record 2.5 City Services This area is served by city services. 3.0 Relocation No relocation should occur due to the rehabilitation of the parcels identified for expansion of this district. Should relocation occur because of rehabilitation in the proposed district, the person(s) causing a qualified tenant to be displaced shall pay all the relocation costs of the tenant as a condition for receiving a tax -exemption under Iowa Code Section 404.3. "Qualified tenant" shall mean the legal occupant of a residential dwelling unit which is located within this designated revitalization area and who has occupied the same dwelling unit continuously for one year prior to the city's adoption of this plan pursuant to Iowa Code Section 404.2. 4.0 Qualification of Areas This revitalization area is for new construction on undeveloped or underdeveloped parcels, of multi -family housing units. Only parcels properly zoned and providing new housing units are eligible. Bies Drive Urban Revitalization Plan Adopted October 2022 Amended January 2024 Page 3 of 6 Parcels in the Bies Drive Urban Revitalization Area that are not in need of economic development for the purposes of new construction multi -family housing as provided for in this plan are excluded from eligibility for tax incentives provided for in this plan. The housing in the surrounding area is single-family and multi -family housing. The Revitalization Area is adjacent to the Kennedy Mall and a childcare center. Within one mile of the Revitalization Area there is an elementary school, Hempstead High School, a grocery store, pharmacy, retail establishments, local transit, and restaurants. Additionally, there are several employment opportunities within one mile of the Revitalization Area, which include the establishments listed above as well as several commercial employers. 4.1 Historic Significance The Bies Drive Urban Revitalization Area has been used as undeveloped wooded areas. There have been no buildings constructed on the qualifying parcels to date. 5.0 Revitalization Program 5.1 Tax Exemption a) New construction multi -family residential property assessed as residential will be eligible for property tax exemption. The property tax exemption will be in accordance with the Code of Iowa, Chapter 404.3(4), providing for a ten-year, exemption of the actual value added by the improvements according to the following schedule PercentageYear of of Value ExemptionA..-. Exempted Year 1 85% Year 2 85% Year 3 85% Year 4 85% Year 5 85% Year 6 85% Year 7 85% Year 8 85% Year 9 85% Year 10 85% b) New construction multi -family housing meeting the affordable housing definition of rent rates at or below Fair Market Rent (FMR) as established by the U.S. Department of Housing and Urban Development will be eligible Bies Drive Urban Revitalization Plan Adopted October 2022 Amended January 2024 Page 4 of 6 for a property tax exemption. The property tax exemption will be in accordance with the Code of Iowa, Chapter 404.3(4), providing for a ten- year, 100% exemption of the actual value added by the improvements. c) "Qualified real estate" means real property, other than land, which is located in a designated revitalization area and to which improvements have been added, during the time the area was so designated, which have increased the actual value by at least ten percent in the case of real property assessed as residential. d) Property tax exemption shall be available only for `new construction'. "Actual value added" means the actual value added as of the first year for which the exemption was received. e) Any construction or improvements that were assessed before the area was officially designated will not be eligible for exemption. Construction begun greater than one year prior to the area becoming designated will not be eligible for exemption. All exemptions existing at the time of the repeal of the Bies Drive Urban Revitalization District shall continue until their expiration. f) New Construction must result in a structure meeting applicable building, plumbing, mechanical, electrical, and other code requirements of the City of Dubuque. g) The actual value of the improvements must result in an increase in assessed value as stated above in (b). Each year that an application is made for tax exemption, the assessed value must have increased in that year by the required percentage. h) The area will become a Revitalization Area commencing upon the adoption of the ordinance approving this Revitalization Area by the City Council. The designation of the Bies Drive Urban Revitalization Area will remain in effect until the desired level of revitalization has been attained. Upon repeal of the ordinance establishing this revitalization area, all existing exemptions would continue until their previously established expiration date. i) All rental units created must accept the U.S. Department of Housing and Urban Development housing assistance in the form of Housing Choice Vouchers that are administered through the City of Dubuque Public Housing Authority to be eligible for the tax abatement, for all ten years of the abatement period. Denying a prospective tenant based on their source of income will terminate eligibility for tax abatement under this plan. 5.2 Availability of funding Bies Drive Urban Revitalization Plan Adopted October 2022 Amended January 2024 Page 5 of 6 There are two active programs, which may provide a source of funding for residential housing units should they remain affordable according to the U.S. Department of Housing and Urban Development Area Median Income limits for the City of Dubuque. These include Community Development Block Grant Funds (CDBG) and Housing Tax Increment Financing. 6.0 Application Procedure This area, upon designation, will follow the procedures for application and granting of the property tax exemption within the City of Dubuque. a) The property owner must apply for an exemption by February 1 st of the assessment year for which the exemption is first claimed, but not later than the year in which all the improvements included in the project are first assessed for taxation, or the following two assessment years, in which case the exemption is allowed for the total number of years in the exemption schedule. Upon the request of the owner, the governing body of the City may provide by resolution that the owner may file an application no later than February 1 of the tenth assessment year. b) The application must contain, at a minimum, the following (if applicable): a. The nature of the improvements, b. The cost of the improvements, c. The actual or estimated date of completion, and d. The tenants occupying the property as of the date of the City's resolution adopting this plan. c) The city reviews all applications to determine whether the improvement project conforms to the revitalization plan, is within a designated area, and if the improvements were made during the appropriate time. If the project meets all three criteria, the city shall forward the application to the assessor by March 1st, with a statement as to which exemption applies. Applications for exemptions for succeeding years on approved projects shall not be required. d) The local assessor shall review each application by making a physical review of the property, to determine if the improvements made increased the actual value of the qualified real estate by at least ten percent in the case of real property assessed as residential property. If the assessor determines that the actual value of that real estate has increased by at least the requisite percent, the assessor shall certify the property valuation, determined pursuant to the tax exemption schedule, to the County Auditor at the time of transmitting the assessment rolls. The assessor shall notify the applicant of the determination, and the assessor's decision may be Bies Drive Urban Revitalization Plan Adopted October 2022 Amended January 2024 Page 6 of 6 appealed to the local board of review at the time specified in Iowa Code. The property owner may also refile an application in a subsequent year after additional improvements have been made. e) After the tax exemption is granted, the assessor shall continue to grant the tax exemption, with periodic physical review by the assessor, for the ten- year time specified in the tax exemption schedule. f) An application for exemption received by February 1 in any year after the year in which the improvement was completed and first assessed for taxation, is a late application. Late application may be made in any year up to the tenth year following completion of the improvement. The exemption period will be the remainder of the ten-year period, which began upon completion of the improvement, except the total number of years in the exemption schedule will be allowed if a claim for exemption is filed within two years of the February 1 filing deadline. 7.0 Conclusion The proposed urban revitalization district will encourage new construction to provide needed housing units. After the ten-year abatement period lapses, the full assessed value of the property will go on the tax rolls to the benefit of the entire community. EXHIBIT A (Map)