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Urban renewal area, plan set for new apartment complex

The City Council of Webster City on Monday voted unanimously to establish an Urban Renewal Area to support development of a 212-unit workforce housing development on the city’s southwest side.

The official designation of an Urban Renewal Area, and development of an Urban Renewal Plan, are essential steps in obtaining Tax Increment Financing — TIF — for the new housing.

At its January 20 meeting, the Council approved an economic development grant to benefit Kading Properties LLC, of Urbandale, developer of the housing complex. The grant is limited to 20% of the verified infrastructure costs of the development, or $1.2 million, whichever is lower. TIF financing, approved in concept at Monday’s meeting as part of the Urban Renewal Plan, completes the financing package, and opens the way for the city and Kading to sign a development agreement.

The city’s total TIF commitment is forecasted to include $4.550 million in infrastructure payments, $15,000 in administrative fees, and a state-required set-aside of $1,898,260 for assistance to low and moderate income families who ultimately may live in the new apartments. That total would be $6,463,260.

Low to moderate income families are those that earn no more than 80% of the median income of all residents of Hamilton County.

Readers may think of slum clearance in large cities when the words “urban renewal” are mentioned, but since 1985 it’s had another meaning in Iowa. In that year, the Iowa General Assembly amended Chapter 403 of the Code of Iowa, “to authorize city councils to create economic development areas . . . in order to facilitate the use of Urban Renewal for economic development.” Such developments may be residential, industrial or commercial in nature.

Further, Chapter 15A of the Code of Iowa, sets out that “economic development is a ‘public purpose,’ and authorizes local governments to make grants, loans, guarantees, tax incentives and other financial assistance, to private enterprise.”

The process to set all this in motion begins when a city council finds a need to establish an Urban Renewal Area in a city. An Urban Renewal Plan is then prepared, consistent with the city’s existing comprehensive or general plan. Any other affected taxing entities must then be allowed to comment on the plan. Finally, city councils must hold a public hearing on the Urban Renewal Plan before moving to approve it.

In related action, the Council passed a resolution providing for division of taxes on property in the new Urban Renewal District between the State of Iowa, Hamilton County, City of Webster City, school districts, and other taxing districts created, after the effective date of the ordinance.

Finally, the Council set a date of February 17, the date of its next regularly-scheduled meeting, for proposed adoption of a development agreement between the City of Webster City and Wilson Estates LLC.

City staff and the Council have moved quickly to finish administrative details pertaining to the new housing development so Kading can begin construction this fall. It plans to build the entire 212-unit development in three years, finishing the final phase in the fall 2028.

Kading has planned to build apartments on the west Wall Street site since 2020, but was forced to halt planning due to the Covid pandemic, subsequent rapid inflation in material costs, a labor shortage of construction workers across Iowa, and supply chain shortfalls.

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