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HomeMy WebLinkAbout10.01.2007• • COUNCIL WORK SESSION October 1, 2007 4:45 p.m. Council Chambers Members present: Mayor Hurley, Kincaid, Welper, Greenwood, Getty, Schmitt. Members absent: Gunderson, Cole. Others present: Joe Vich, Chair of the Enterprise Zone Commission, Frank Dowie, Chuck Orr, Jerry Northey and Bob Burns. Moved by Schmitt, seconded by Kincaid that the Agenda, as proposed, be approved. Ayes: Five. Absent: Gunderson, Cole. Motion carried. The purpose of the work session was to discuss the potential expansion of the Enterprise Zone. Don Temeyer, Community Planning & Development Director, reviewed the current Enterprise Zone. Mr. Temeyer reported that the State Code now allows for an unlimited amount of area within city limits within an Enterprise Zone as long as it meets two of the criteria. Criteria includes: a per capita income of $12,648.00 or less, a family poverty rate of 12 percent or higher, 10 percent or more of housing units are vacant in the area, valuations of each class of property in the designated area is 75 percent or less of the citywide average and the area is a blighted area. Noel Anderson, City Planner, explained that Bob Burns is interested in doing a project in the Flammang Drive area, and he asked if the area could be included in the Enterprise. The Enterprise Zone Commission looked at eligibility by census tract block. Mr. Anderson reported that staff believes the following areas would meet eligibility for expansion: near the Crossroads area, near the Omega Industrial Park area, near Gates Park and near Exchange Park. The Enterprise Zone Commission has been discussing the pros and cons of the expansion, primarily with the concern that the expansion would take away interest from the existing Enterprise Zone area near the urban areas of the community. The pros are that there could be further interest in development in Waterloo in a larger area, primarily through additional state incentives. Mr. Anderson reviewed the housing criteria, housing tax benefits, business criteria, and business tax benefits. Mr. Anderson noted that the Enterprise Zone could be used in the Northeast Industrial site as an incentive package for new companies. Mr. Anderson reviewed the Crossroads area and explained that an Enterprise Zone cannot be used for retail development, but Hummingbird Circle has empty lots and there are some acreages along GMAC and the Target area that could benefit. Joe Vich, Chairperson of the Enterprise Zone Commission, explained that the Whitman Point Project would qualify if it were in an existing zone. The state has changed the requirement, and Mr. Bums asked the commission to consider changes either specifically for his area or overall. Mr. Vich noted the dilemma facing the commission was that they were charged with looking at projects in blighted areas, with the thought being to interest people to do infill and improve that area of town. Mr. Vich asked for the council's input as to whether they want to change the Enterprise Zone boundaries. Mr. Vich commented that the City of Des Moines has expanded their Enterprise Zone. Mr. Anderson stated that Census Tract 9 (Crossroads area) meets two of the criteria. Mr. Anderson noted that Cedar Falls does not have an Enterprise Zone, but they have one census tract that would be eligible. Mr. Anderson stated that in an Enterprise Zone, the housing developer or contractors may receive an investment tax credit of up to a maximum of 10 percent of the investment directly related to the construction or rehabilitation of housing. The tax credit is based on the new investment used for the first $140,000.00 of value for each home or unit. Mr. Anderson explained benefits to expanding the Enterprise Zone would be additional state incentives for new housing, additional incentive in the Northeast and Omega areas for new industrial businesses, it may work to bring large tract housing developers, and it allows incentives for business and housing without impacting local property tax base. There are some Council Work Session October 1, 2007 Page 2 concerns are that expanding the zone could detract away from the existing Enterprise Zone and maybe not all areas truly need help. Jerry Northey stated that his concern was if the zone is expanded they could start cherry picking, so his first thought was to leave the zone where it is at. Councilperson Greenwood asked if there is a need for additional incentives in the Northeast site. Mr. Anderson responded he feels there is because some times our taxes are higher than other areas, and if we included the Northeast site a developer could be eligible for local property tax exemption on the value added to the property, a refund of state sales tax, and additional funding for training new employees. Councilperson Getty stated he is opposed to expanding the Enterprise Zone, and he would like the CURA to be moved further north. Councilperson Schmitt favors expansion of the zone because the whole idea is growth, and we have had ten years experience with the present Enterprise Zone. Councilperson Kincaid stated he was learning toward the northerly part of the city so there is more development in that area as he feels we need something for the low- and middle -income areas. Councilperson Welper favors the expansion. The Enterprise Zone is keeping everything downtown, and he believes the downtown is going to flourish. Councilperson Greenwood favors expansion of the Enterprise Zone and the CURA. Mayor Hurley asked the commission to explain the new expansion to Councilpersons Cole and Gunderson as tonight we have three council members leaning towards expansion and two members wanting more expansion to the north. Mayor Hurley asked how many pieces of vacant property are located in the current Enterprise Zone. Mr. Temeyer responded that in the Highway 63 Corridor there are about 450 vacant lots that could be developed, and the city has acquired 15 lots through demolition that are currently vacant. Mr. Vich noted expansion of the zone could open up development in the future. This developer is going to go through with his project whether the zone is expanded or not, but including that area in the Enterprise Zone would reduce the price his clients will have to pay. Mr. Temeyer commented that he is afraid of what expansion of the Enterprise Zone will do to the existing area, that people may go south. Mr. Temeyer stated he doesn't feel the city needs incentives for the Crossroads area. Mr. Anderson commented that expansion would be proactive and it would help other areas. The city has not drawn large projects in the current Enterprise Zone, but maybe we would get big investments in a new Enterprise Zone. Chuck Orr stated the original area will continue to need help, and if the zone is going to be expanded he would favor doing the large area, not just a small part. Mayor Hurley encouraged the Enterprise Zone Commission to get Councilpersons Gunderson and Cole's opinion and let the council know of the outcome. With no further business before the council, it was moved by Getty, seconded by Schmitt that the meeting be adjourned at 5:25 p.m. Ayes: Five. Absent: Gunderson, Cole. Motion carried. Nancy Eckert City Clerk • •