Newton City Council approved an urban renewal area and a Tax Increment Financing district at the Fairmeadows North subdivision expansion Monday and set a public hearing to move forward with the same designation at the Cardinal Ridge development.
The urban renewal area and TIF district at Fairmeadows North will be used to pay for infrastructure costs and the expansion of the housing subdivision. The expansion consists of seven acres divided into 23 lots located east of Agnes Patterson Park.
The city approved about $900,000 in infrastructure costs for Fairmeadows North with a little more than half or $575,000 of that expected to be recovered through lot sales. The remaining costs will come from the creation of the TIF district.
An urban renewal area was created to take on different economic development activities. Areas can be created for the purpose of addressing slum, blight, economic development, low to moderate income housing and non-low to moderate incoming housing. The city is looking to use the low to moderate income housing at Fairmeadows North.
A TIF district will designate taxes generated from the houses to pay off the remaining infrastructure bill before distributing them to other tax districts including the school district and county. While it may appear money is being withheld from other taxing entities, city administrator Matt Muckler said the money would never be there without the city facilitating the creation of housing in the area.
“If you have a bare piece of land, like we have now, it is not generating any taxes. Say it generates $100 in taxes a year, it is almost a none issue,” Muckler said. “Had the city not stepped in and provided an urban renewal district, if we didn’t have that option on the table, there would be no houses.”
Once the allotted funds are collected from the TIF district for city costs, the taxes will be distributed among the school, county and other taxing entities. Mayor Mike Hansen said a hearing was held with the other taxing bodies prior to the topic coming before the council
“The taxing bodies have the opportunity to either object or go along with these type of renewal areas,” Hansen said. “The county was here and expressed their approval. They are well aware that this is a benefit for both the school and the county as well as the city in order to increase our tax base and that’s why they see the value in participating in this.”
There is a 10-year time limit to collect the funds, but said he expects the debt to be paid off much soon.
“We won’t get anywhere near that. We hope that these lots will be built out quickly and theoretically, we’d love to be completely built out in two to three years,” Muckler said. “We’ve already heard a lot of interest in a lot of these lots.”
A similar process is planned for Cardinal Ridge with the development of a housing urban renewal area and TIF district. The proposed area will be used to support the development of new residential housing and the corresponding construction of public infrastructure.
A public hearing is set for Dec. 4 on the Cardinal Ridge Housing Urban Renewal Area.
Contact Jamee A. Pierson at 641-792-3121 ext. 6534 or firstname.lastname@example.org