Smart Growth Development Funding UpdateMasterpiece on the Mississippi
TO: Michael Van Milligen, City Manager
FROM: David J. Heiar, Economic Development Director
SUBJECT: Smart Growth Development
DATE: August 13, 2012
Dubuque
kraal
AU-America City
1
2007
PURPOSE
The purpose of this memorandum is to request funding for the statewide initiative of Smart
Growth Development.
BACKGROUND
In 2009, several statewide developers combined resources and efforts to increase the cap on
the State Historic Tax Credit program from $20 million to $50 million. Many local people were
involved in this legislative effort, including developers who rely on Historic Tax Credits, Jill
Connors and Assistant City Manager Teri Goodmann. The IBM project provided much of the
needed momentum to convince legislators and the Governor that State Historic Tax Credits not
only enhance sustainable redevelopment of historic structures, but can also create jobs.
These efforts over the past couple of years have brought over $10 million in funding to the
Roshek Building rehabilitation and have kept several major Historic Millwork District projects
from having their credits recaptured in 2010, thus keeping the Millwork District project moving
forward instead of stalling indefinitely.
DISCUSSION
Much work still lies ahead for the continued effort to improve the Historic Tax Credit programs.
The main objectives for 2012 -13 are as follows:
State Level Policy:
1) Raise annual cap of the SHTC back to $50MM
a) Was lowered to $45MM
There is currently a waiting list for projects which delays development during a time when most
every city is in great need of the economic impact that historic rehabilitation projects bring. For
every $1 MM spend a historic rehab project creates 4 -6 more construction jobs than normal
construction.
2) Defend Tax Increment Financing (TIF) program
a) TIF is a valuable economic development tool and needs to remain an option for
cities and counties.
3) Increase usage of SHTC small project fund
a) Create coordinated public outreach effort
i) Currently 5MM is allocated for small projects under $500,000 and it is not
adequately being used. This outreach effort would be to educate smaller
cities and the public on the value of this fund and how to use it.
4) Increase in Section 42 per unit cost cap
a) The amount a developer can spend per unit on Low Income Housing Projects
has been cut to a level where many developers can not make projects feasible.
Those developers who are using the decreased credit are finding the quality of
their development is weakened.
5) Funding of Workforce Housing Tax Credit fund
a) There is currently a fund for Workforce Housing under the Iowa Finance Authority
but no funds have been allocated. Many cities are in need of workforce housing
and this fund could be a valuable tool for cities and developers.
6) Increase in Brownfield /Grayfield Tax Credit to $10MM
a) There is currently a waiting list for this credit and the program has shown
success. Smart Growth has been working with Senator Bill Dotzler on increasing
the fund from $5MM to $10MM
Federal Level Policy:
1) Obtain extension of the 2008 Heartland Disaster Bill
a) Expired on January 1st 2012
2) Elimination of federal tax liability on SHTC income
a) CAPP ACT
These changes will be beneficial for multiple projects across the state, but in Dubuque, it will
particularly benefit the planned improvements in the Millwork District. This work demands the
daily attention of an advocate in the Iowa Assembly and a director to manage members' input
and weekly conference calls and research. Continuing the successful work during the next
legislative session depends upon having the funds to pay a staff director and advocate.
Attached is a summary of some of the accomplishments achieved by Smart Growth
Development over the past 3 years.
Smart Growth Development is an Iowa non - profit organization with an annual budget between
$40 - 50 thousand dollars. The organization has a three member governing board, which
includes:
John Gronen, Dubuque
Jim Walsh, Waterloo
Jason Stone, Des Moines
The organization has a director (Ryan Dierks of Dubuque) and a legislative advocate (David
Adelman) and has already obtained over $20,000 in funding commitments from the following
groups, organization and individuals:
Quad Cities Chamber of Commerce
JSA Development
Davis Brown Law Firm
Gronen Restoration
Mike Darnall
Weinberg Investments
Christiansen Development
Orchestrate Hospitality
Hubbell Realty Co.
City of Des Moines
Fischer Companies
2
Davenport, IA
Waterloo, IA
Des Moines, IA
Dubuque, IA
Burlington, IA
Sioux City, IA
Des Moines, IA
Des Moines, IA
West Des Moines, IA
Des Moines, IA
Dubuque, IA
Ryan Companies
American Trust & Savings
Commerce Bank
Restoration St. Louis
Cedar Rapids, IA
Dubuque, IA
St. Louis, MO
St. Louis MO
In order to reach Smart Growth Development's target budget of $50,000, the non - profit is
requesting the supporting municipalities with populations over 50,000 contribute $2,000.
RECOMMENDATION
That the City commit $2,000 for the efforts of Smart Growth Development as they work toward
improving the Historic Tax programs that fund many rehabilitation projects in the City of
Dubuque. According to Budget Director Jenny Larson the funding can be taken from the
Economic Development Federal Initiatives budget.
cc: Teri Goodmann, Assistant City Manager
F \USERS \Econ Dev \Smart Growth Development\20120814 Smart Growth Development Council memo doc
3
SMATG ROTH
DEVELOPMENT
American Trust & Savings
BH Equities, LLC
BRE Inc.
Chatham Bay Group
City of Des Moines
City of Dubuque
Davenport One
Davis, Brown, Koehn,
Shors and Roberts
Downtown Partners
(Sioux City)
Drake & Freund, P.C.
Dubuque Araa Chamber
of Commerce
Dubuque Main Street
Fischer Companies
Greater Des Moines
Partnership
Gronen Restoration
Hotel Fort Des Moines
Hubbell Realty Co.
Indigo Dawn
Jeffrey Morton Associates
JSA Development
Julie Kim Design
Liberty Building
Development Group
Mako One Corporation
Miller Development Group
Nelson Construction
New Market Investors
Preservation Iowa
reNew Design Studio
Ryan Companies
Siouxland Chamber
Steele Capital
Management, Inc.
Sustainable Neighborhood
Builders
Weinberg Investments, Inc.
World Food Prize
Foundation
Ambitious Goals...
Proven Results...
2008- 2009
• Raised cap of Iowa's Historic Tax Credit Program from $20M to $50M
o Injected $100 million into Iowa's Economy.
o $300 Million leveraged in federal and private investment.
• Led the charge for the creation and passage of the Federal Heartland Disaster Bill
o Increases the FHTC to 26% for 78 Iowa counties.
o Successfully gained Senator Chuck Grassley's support and sponsorship of the bill.
• Improved SHTC program rules to eliminate "Lottery" method.
o Queue now gives preference to projects in order of application
2009 - 2010
• Defended the SHTC program and the $50MM cap.
o Program did take a 10% cut along with all other State programs.
o Important features such as refundability and transferability were protected.
• Led the push for the creation of a state level workforce housing grant program.
• Worked in collaboration with City and County organizations to block harmful modifications to the TIF program.
• Successfully blocked proposed language which would have prohibited development /redevelopment within 500 -
year floodplain.
2010 -2011
• Initiated and led the charge for the passage of SF -521, which enacts administrative changes to the SHTC.
o Additional 24 months to line up financing and complete construction /redevelopment
o Eliminates $100,000 cap in rehabilitation cost per residential unit
o Changes qualified rehabilitation period to the date the first qualified rehab cost is incurred and ending
with the end of the taxable year in which the property is placed in service
• Defended the SHTC program from further cuts.
• Collaborated with groups for the creation of the Brownfield /Grayfield Tax Credit.
Ji
(
Questions? Contact:Ryan Dierks
Smart Growth Development
P.O. Box 3134
Dubuque, Iowa 52004
Phone: 515-326-1727
Email: Ryan @smartgrothdevelopment.org
GROWTH
DEVELOPMENT
PO Box 3134
Dubuque, Iowa 52004 -3134
mobile 563.580.1784
ji ll.con nors@smartgrowthdevelopment.org
TO Dave Heiar
City of Dubuque
50 W. 13th Street
Dubuque, IA 52001
INVOICE
INVOICE # 1125
DATE: MAY 4, 2011
CLIENT
PAYMENT TERMS
DUE DATE
City of Dubuque
Due on receipt
DESCRIPTION
2011 Advocacy Services
LINE TOTAL
$2,000.00
Make all checks payable to: Smart Growth Development
THANK YOU FOR YOUR BUSINESS!
TOTAL
$2,000.00
reRO
DEVELOPV
'1
1
•
ENT
2012/2013 Action Items
State Level Policy:
1) Raise annual cap of the SHTC back to $50MM
2) Amend Department of Revenue code to allow for Disproportionate Allocation
3) Defend Tax Increment Financing (TIF) program
4) Increase usage of SHTC small project fund
a) Create coordinated public outreach effort
5) Increase in Section 42 per unit cost cap
6) Funding of Workforce Housing Tax Credit fund
7) Increase in Brownfield /Grayfield Tax Credit
Federal Level Policy:
1) Obtain extension of the 2008 Heartland Disaster Bill
a) Expired on January 1st 2012
2) Elimination of federal tax liability on SHTC income
a) CAPP ACT