Urban Renewal and Urban Revitalization
Urban Renewal (URN)
Tax Increment Financing (TIF): Chapter 403 of the Code of Iowa allows municipalities to create an urban renewal area (URN) as a tool to promote economic development, eliminate slum and blight and facilitate housing development. URN areas allow the City to create TIF districts. When a TIF district is created, a “base” valuation of the property value is established. The base valuation accounts for assessed values prior to the TIF designation.
TIF is typically used by cities to fund public improvement projects or private project-based financial assistance, in conjunction with developing or redeveloping different parts of a city. This may include upgrading areas of the city suffering from slum and blight, helping residential development efforts and enhancing economic development activities. Depending on the size of the project, cities may use the annual increment to provide project funding or may need to incur debt to finance an improvement, such as installing infrastructure.
Housing development is core part of the URN program through economic development promoting the development of low- and moderate-income housing (LMI), public infrastructure improvements for non-LMI housing and all housing types in blight-designated areas.
Projects requesting TIF are evaluated independently and the City works to “right-size” the incentive to the proposed development. Interested developers should contact the Community Development Department to discuss further.
Urban Revitalization (URV)
Chapter 404 of the Iowa Code authorizes a City to designate an area as a revitalization area. Improvements to qualified real estate within designated areas may then be eligible to receive a total or partial exemption from property taxes for a specified number of years. The exemptions are intended to stimulate private investment by reducing the tax increase that would normally result from making improvements to real estate property. The purpose is to attract development to specific areas, which might otherwise continue to deteriorate, thereby stabilizing or perhaps even increasing the tax base with those areas.
URV provides a tax exemption to eligible projects that increase the taxable value of a parcel by at least 10%. Projects must be within a designated URV area and commit to a minimum assessed valuation upon project completion. Note, this required increase in assessed valuation is based on the existing building valuation, not the total property valuation which includes the land value.
URV allows for two tax abatement options for housing within a designated URV area:
- Construction of new multi-family housing is eligible for up to six (6) years 100% exemption on the new tax base created.
- Rehabilitation of multi-family housing or conversion of historic buildings to residential housing is eligible for up to ten (10) years 100% exemption on the new tax base created.
How to Apply for Urban Revitalization
- Applications for qualified improvements are due by February 1 each year to certify work completed in the prior calendar year. Applications will be available by December 15 each year through the Community Development Department.
- All work must be permitted by the City Building Division and completed by a licensed contractor. Unpermitted work will not be eligible for the program.
- An application fee is required with each submittal. The fee is equal to a base fee of $500.00 plus $15.00 per $100,000 in added valuation. However, the processing fee shall not exceed $1,500.00. This fee must be attached by check to this application for review to begin.
Project Approval Process for Urban Revitalization
Owners of property who have made improvements within a designated urban revitalization area must apply to receive tax exemption benefits. If an improvement project extends over several years, an application is required for each calendar year that improvements were completed. The following provides a general outline of the City’s application and review procedures. Done Editing
Applications for tax abatement must be made to the City by February 1st following completion of the improvements. Failure to submit by the February 1st deadline may result in an automatic denial of benefits. Upon approval, the City is required to submit this approval to the County Assessor by March 1st. In addition, applications must be submitted in each calendar year that improvements are made. All applications shall be made on forms prepared by the Community Development Department.
A processing fee shall be submitted with each annual project review application. The fee shall be equal to a base fee of $500.00 plus $15.00 per $100,000 in added valuation. However, the processing fee shall not exceed $1,500.00.
*This fee must be attached by check to this application in order for review to begin.*
The following procedure will be utilized in reviewing applications:
- The applicant requests a preliminary conference with the Community Development Department to review and explain the application process. Applications, along with all required data, are due by February 1st to the Community Development Department.
- It is preferred that the applications be typed or computer-generated. (Contact the Community Development Department to have an electronic copy of this application e-mailed to you). Any material change to the format, questions, or wording of questions presented in this application will render the application invalid and will not be accepted.
- Complete the application fully; if any questions are left unanswered or required attachments are not submitted, an explanation must be included.
- Additionally, inaccurate information of a significant nature may disqualify the application from consideration.
- As part of the Community Development Department acceptance procedure, additional information or data may be required.
The Community Development Department shall review the forms and data for completeness. If there is a deficiency, the Department will notify the applicant within seven (7) days. The application will not be processed until completed.
The Department shall review the application according to the following criteria: 1) conformance with the Urban Revitalization Plan; 2) a finding that the site is within a designated area; 3) a finding that the work has been completed within the time required to qualify for abatement in the assessment year; 4) a finding that the application is consistent with Chapter 404 of the Iowa Code; and 5) a finding that the application is consistent with all applicable city codes and ordinances.
Upon review of the application, the Community Development Department will prepare a recommendation and schedule the application for City Council consideration.
The City Council will, by resolution, accept or reject the application and improvements as conforming to all City codes and State law.
The City Council will then direct the Community Development Department to transmit a copy of the case file to the Pottawattamie County Assessor's Office by March 1st, as required by Chapter 404 of the Iowa Code.