Horizon Development Corp. Inc., Request for City Support for Low-Income Housing Tax Credit Application Copyrighted
January 7, 2019
City of Dubuque Action Items # 8.
ITEM TITLE: Horizon DevelopmentGroup, Inc Requests CitySupportforLow-
Income Housing Tax CreditApplication
SUMMARY: City Manager recommending approval of a resolution supporting
the Low-Income Housing Tax Credit Program application to the
lowa Finance Authority by Horizon Development Group, Inc. for
the Nativity Senior Housing Project at 1225 Alta Vista.
RESOLUTION Supporting Horizon Development Group, Inc
Application for Low-I ncome Housing Tax Credit for Nativity Senior
Housing Project
SUGGESTED DISPOSITION: Suggested Disposition: Receive and File;Adopt Resolution(s)
ATTACHMENTS:
Description Type
Horizon DevelopmentCity Supportfor IFAApplication- City Manager Memo
MVM Memo
Staff Memo Staff Memo
Resolution for City Support Resolutions
THE CITY OF Dubuque
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TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: City Support for Horizon Development Group, Inc.'s Application to lowa
Finance Authority for Low-Income Housing Tax Credits
DATE: December 28, 2018
Housing and Community Development Director Alexis Steger recommends City Council
approval of a resolution supporting the Low-Income Housing Tax Credit Program
application to the lowa Finance Authority by Horizon Development Group, Inc. for the
Nativity Senior Housing Project at 1225 Alta Vista.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
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Attachment
cc: Crenna Brumwell, City Attorney
Teri Goodmann, Assistant City Manager
Cori Burbach, Assistant City Manager
Alexis M. Steger, Housing & Community Development Director
THE CITY OF Dubuque
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T0: Michael C. Van Milligen, City Manager
FROM: Alexis M. Steger, Housing & Community Development Director
DATE: December 28, 2018
RE: City support for Horizon Development Group, Inc's application to lowa
Finance Authority for Low-Income Housing Tax Credits
Introduction
This memorandum requests City Council support the Low Income Housing Tax Credit
(LIHTC) application to be submitted to the lowa Finance Authority (IFA) by Horizon
Development Group, Inc for the development of affordable senior housing at 1225 Alta
Vista.
Background
The City of Dubuque is committed to providing quality, affordable housing. One of the tools
used to create this affordable housing is the Urban Revitalization Chapter 404 of the lowa
Code (Urban Revitalization Act) that authorizes cities to designate areas as urban
revitalization areas. Improvements to qualified real estate within these designated 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 reducing tax
increases that usually accompany property improvements. This additional private
investment provides a long-term increase or stabilization in the area's tax base, enhances
the visibility of revitalization areas and supports important city objectives such as historic
preservation, economic development and affordable housing development.
The City Council designated the area at 1225 Alta Vista Road as the Nativity Road
Revitalization Area on January 7t", 2019.
Discussion
Horizon Development Group, Inc is requesting City support for the 2019 LIHTC application
to develop 60 affordable senior housing units at 1225 Alta Vista. This application is
consistent with the adopted Urban Revitalization plan.
Horizon Development Group, Inc is proposing a $11 million dollar project utilizing private
financing, Federal Home Loan Bank Des Moines AHP, Tax Credit Equity, and Tax
Abatement incentives to finance the project.
The City of Dubuque has supported similar projects using the Urban Revitalization Tax
Exemption (URTE) to provide a ten year 100°k tax abatement of the value added to the
property by the improvements. URTE is a tool designed to encourage the development
and re-development in the interest of public safety, health, and well-being. City support for
this project ensures the project is financially feasible and demonstrates to the State of
lowa the community is supportive of the project.
Source of Income Committee
In December 2014, the City Council approved formation of a Source of Income Committee
to conduct a two-year study examining the HCV program and its relationship to fair
housing, with a goal of identifying ways to enhance fair housing in Dubuque (see
Attachment C).
In February 2017, the Source of Income Committee ultimately recommended a collective
impact approach to adopt and implement a mix of educational, outreach, and financial
programs to increase housing provider participation in the HCV program. These
recommendations are found in the Comprehensive Plan:
• Adopt and implement a mix of educational / outreach programs to increase
participation in HCV program.
• Adopt and implement a mix of financial incentives / policies for creation of HCV
units throughout community.
Based on the Source of Income Committee recommendations, the City now requires
housing developers to accept HCV participants in conjunction with approval of an
affordable housing development agreement related to an urban revitalization plan.
Estimated Property Tax Calculations
The current property value, based upon 2018 Beacon data, is $655,250 for land and
$2,850,820 for dwelling for a total value of$3,506,070. This parcel is currently owned by a
tax-exempt entity, so the total taxable value is $0.
The developer estimates after improvements the assessed value for taxation will be
$2,195,868. At the 2018 tax rate of 0.03291592, the annual property tax increase over
existing is estimated to be $72,279. The abatement of$72,279 will be in effect for 10
years for an estimated total of$722,790. After the abatement period expires the property
will be taxed based on the assessed value for taxation as determined by the assessor.
Recommendation
I respectfully recommend that the City Council approve the attached resolution supporting
the Low-Income Housing Tax Credit program application to the lowa Finance Authority by
Horizon Development Group, Inc for the Nativity Senior Housing Project.
Cc: Maurice Jones, Economic Development Director
Jill Connors, Economic Development Director
Laura Carstens, City Planner
RESOLUTION NO. -19
SUPPORTING HORIZON DEVELOPMENT GROUP, INC APPLICATION FOR LOW-
INCOME HOUSING TAX CREDIT FOR NATIVITY SENIOR HOUSING PROJECT
Whereas Ordinance -19 of January 7, 2019, designated the Nativity Road
Revitalization Area as defined in Section 404 of the lowa Code; and
Whereas, the Developer Horizon Development Group, Inc requested City support for
the Tax Credit application to the State of lowa to develop 1225 Alta Vista and;
Whereas, the Low-Income Housing Tax Credit Application by Horizon Development
Group, Inc to the State of lowa is consistent with the development of affordable,
housing described in the Alta Vista Urban Revitalization Plan;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
DUBUQUE, IOWA:
Section 1 . The City Council supports the development of affordable housing located
at 1225 Alta Vista and;
Section 2. The proposed development for Nativity Senior Housing Development is
located within the Nativity Road Urban Revitalization Area and eligible for a 10-year
100°k tax abatement from the value added by the improvements, estimated at $72,279
per year.
Passed, approved and adopted this 7�h Day of January, 2019.
Roy D. Buol, Mayor
Attest:
Kevin F. Firnstahl, City Clerk