City approves agreement with Hubbell for Maytag buildings

The Newton City Council has approved a preliminary development agreement with Hubbell Realty Company for a $7 million apartment project at two former Maytag buildings. The agreement is subject to the tax credit approval Hubbell hopes to receive from the state.

Hubbell aims to renovate the property, located at 403 W. Fourth St. N., commonly known as Maytag buildings 1 and 2.

The city committed $250,000 in TIF grant money to the project upon completion of construction during a special meeting last week. It would also provide 11 years of TIF District payments of $30,000 per year, which would mostly come from the new tax value crated by the project. The net total amount the city would pay is $478,000, which is comparable to the other two downtown housing projects the city is involved in.

Kris Saddoris, vice president of development for Hubbell, said the grant money coming from the city is a very important piece to receiving tax credit and in certain circumstances, can be the difference between approval and dismissal.

For the Miller-Valentine Newton Senior Residence the city agreed to a $150,000 grant upon completion with $25,000 for 12 years in TIF payments totaling $400,000 from the city. The Miller-Valentine Lofts at Newton also will receive $250,000 in grant money upon completion with $25,000 for 15 years in TIF payments totaling $525,000 from the city.

A portion of the incentives the city agreed to pay to Hubbell will be offset by a previous commitment the city had with Newton Enterprises. In 2012, the city agreed to a rebate of property taxes to facilitate the purchase of the property by Newton Enterprises. Currently, $241,000 of Newton Enterprise’s assessed valuation is attributed to Maytag Buildings 1 and 2. When those buildings are sold, they would no longer be a part of the rebate, reducing the payments by approximately $8,500 per year.

The apartment complex would house 42 apartment units — 31 one bedroom apartments and 11 two bedroom apartments.

Twenty-six of the apartments would be geared toward people with incomes in the 60 percent area of the median. That is approximately $26,100 per year for a single person. The amount increases to $37,260 for a four-person household. Not including utilities, the projected rent would range from $515 to $604 for a one bedroom and $575 to $723 for a two bedroom apartment. Seven units would be for incomes in the 40 percent area of the median and three units in the 30 percent area of the median. The remaining six apartments would not have an income restriction and would be rented at market rates.

“We are a firm believer we like to see a variety of units in our projects and we’ve done that in a lot of our redevelopment and this is one that will be very similar,” Saddoris said.

It will not be known for several months if the credits are approved for the project. The agreement automatically expires on June 30, 2015 in a formal Final Development Agreement has not been approved by Hubbell and the city or the two have not agreed on an extension.

Contact Jamee A. Pierson at 641-792-3121 ext. 6534 or jpierson@newtondailynews.com.