Council approves housing grant to build 6 new homes

If you build it, they will come.

That is what the Newton City Council is hoping after unanimously approving the Enhanced Newton Housing Initiative and the independent contracting/consulting agreement with the Newton Housing Development Corporation Monday. The city will provide the NHDC with a grant to purchase property and contract builders and developers to build six new homes in the Fairmeadow North Subdivision, near Agnes Patterson Park.

“We do need to prime the pump, we do need to start something and I think this is a viable so-called risk to take,” Council Member Lin Chapé said.

With the passing of the resolution, the city and NHDC have entered into a grant agreement for the NHDC to facilitate the building of six homes using the city’s pledge of up to $2 million. The purchase of land includes six lots in the Fairmeadows North subdivision, 7.3 acres north of the Fairmeadows development and one lot on South 12th Avenue West.

After the purchase, the NHDC will subrogate the lots to individual contractors who have proposed to build the homes. Builders will finance the initial cost of the construction of up to six homes, having the ability to build one or up to six homes.

As discussed during previous council meetings, the process will focus on and encourage local builders to participate. To be eligible, contractors must start construction on or before Sept. 16. A predetermined price will be set for the lot and the home, now anticipated to be 80 percent of the appraised value.

Contractors and the NHDC will be responsible for marketing the homes with a target of early April 2016 for a “Tour of Homes.” Should homes remain on the market for 12 months, and if the contractor agrees, the city will execute the grand to the NHDC to purchase the home and lot for the predetermined amounts. Once the homes are sold by the NHDC, it will reimburse the grant to the city with the corporation retaining any overage beyond the cost.

The original incentive package the council passed will still apply to the homes in this initiative. That includes waiving of the building permit fees and covering interest costs up to $10,000.

“I really want to thank the NHDC and the voluntary members of the board, they really put a lot of time into developing this program something that is as responsible as it can be to the taxpayer and still tries to move us a step forward in a really critical need in the community — new housing,” Council Member Noreen Otto said.

The city also approved accepting temporary management and operation at Newton Memorial Park Cemetery. The cemetery and buildings on it have fallen into disrepair after changing ownership several years ago and after public outcry, the Iowa Insurance Division requested the city take over management and potentially take full ownership in the future.

“It is disheartening that the cemetery has been put in the situation it has by private ownership and frankly in a discussion with the city administrator after I received the call and had that discussion, it is the right thing for us to move forward,” Mayor Michael Hansen said.

At the start of the meeting, several citizens asked the council to take this step and when approved applause broke out in council chambers and people voiced their thanks to the city for taking control of the cemetery.

In other business:

• The council approved the purchase of a new trap rake for $16,750 and new fairway mower for $41,500 for Westwood Golf Course.

• The city awarded Friedman Distributing, Inc. of Belle Plaine the contract to built a new sand storage building for a price of $40,392.11.

• A new 3/4 ton 4x4 pickup was approved for purchase for the Public Works Department at a price of $26,865.36. It is replacing a 1992 pickup.

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