March 29, 2024

Developer seeks to build 38-unit apartment complex downtown

Marks second recent project pitched to city council

Another apartment building complex is being considered for downtown Newton.

Cohen-Esrey Affordable Partners of Overland Park, Kan. was approved by city council on Monday to move forward with an application for Iowa Finance Authority tax credits to build a 38-unit apartment at 205 W. Fourth St. N.

Cohen-Esrey is offering $225,000 for the land that is currently a city parking lot.

“We are very much excited about the development opportunities in Newton,” Cohen-Esrey Development Director Brian Sweeney. “We read through your master plan and the downtown development design guidelines and I think there are many years of redevelopment that will occur here.”

The proposed project would be a four-story building, complimented by a play area, a green space and 43 parking stalls. The design of the project is proposed to be compatible in the downtown setting, with a flat roof, partial brick facade, balconies and terraces.

The apartments will be subject to income restrictions, due to the proposed state funding. According to city administrator Bob Knabel, a majority of the units would be for people at 60 percent of the area’s median income. This translates to $27,360 for a single person and $39,060 for a family of four.

“These restrictions mean that the project would be geared toward workforce housing, especially new workers, and to retirees on fixed incomes,” Knabel said. “Recent surveys of local employers and employees indicate that there is a shortage of high-quality affordable apartments in Newton. The location near DMACC would also be advantageous for part-time students that would be eligible to live in the units.”

While the project will be partially funded by tax credits, Sweeney is optimistic citizens will be happy with the design and amenities at the complex.

“The modern tax credit product is not your father or grandfather’s tax credit project,” Sweeney said. “The goal now with IFA and the housing department is really to make sure the tax credit projects do not differential as far as design or look to a market rate. We think this project could be that type of building.”

Four market-rate apartments are also planned for the building.

The project will be competing for the same State of Iowa Housing Tax Credits as the recently approved Miller-Valentine project proposed at the former Seed Store property. While only one project can receive the credits, Newton Director of Finance and Development Bryan Friedman sees multiple applications as a positive.

“The way I look at it is, applying for multiple projects increases our odds of getting at least one,” Friedman said.

Councilwoman Evelyn George agreed having more than one developer show interest in the city shows there is a need in the community.

Council asked Friedman if there were any safe guards in place for over-saturating the market, if both projects were to be approved for tax credits.

“When the state gets direct competitors they conduct individual market studies gauging the viability of each of those separately,” Friedman said. “Also, when they have competing projects they will do a separate, independent study gauging whether the market can sustain both of them.”

Along with the tax credits, the city will provide an incentive of a property tax rebate for 15 years. The rebate would be a maximum of $20,000 per year, and would be funded by tax receipts from the project into the North Central Tax Increment Finance (TIF) District.

The application is due to the state by Nov. 17 with a decision expected to be issued in March.

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