Le Mars council approves four workforce housing tax-credit applications and discusses tax-exemption policy

The Le Mars City Council on May 14 approved four resolutions allowing local developers to apply to the Iowa Economic Development Authority (IEDA) for workforce housing tax credits and discussed the city’s urban revitalization tax exemption and a pending housing study.

The council voted to approve applications for: JG1 LLC (resolution 25-21); Luxury Real Estate LLC (resolution 25-22) for a 12-unit apartment project near the airport; Deluxe Re Real Estate LLC (resolution 25-22, as read on the record); and Access Capital LLC (resolution 25-23) for 40 townhouse units on an 8.44-acre parcel along Holton Drive. City administration recommended that Le Mars meet the local match for each application using the Urban Revitalization Plan tax exemption, which provides an exemption on the allowable portion of property taxes for the increased assessed value of multifamily residences for the first seven years.

Why it matters: the tax exemption reduces property taxes for the projects while they are in the seven-year abatement period and is intended to spur construction of multifamily rental housing. Council members used the votes to press for additional information and to flag a separate policy discussion on whether the city’s seven-year abatement remains competitive with nearby communities that now offer 10-year exemptions.

Council and staff said the estimated financial impacts of the city tax exemptions over the seven-year periods are: approximately $123,744.95 for the JG1 LLC project; about $70,513.27 for Luxury Real Estate LLC’s 12-unit project; and approximately $341,208.97 for the Access Capital LLC 40-unit townhouse project. The record does not specify a seven-year estimate for Deluxe Re Real Estate LLC in the transcript excerpts provided.

Developers and project details: attendees and staff described intended uses and product types. City staff said JG1 LLC’s project includes apartments and townhouses behind an existing property; Joe Gallus, identified in discussion as the developer for one project, intends to sell the townhouses. Luxury Real Estate LLC’s project (attributed by staff to Adam Brown) was described as rental apartments. Axis (a property owner/developer based in Orange City) and Tyler Spahn were identified as involved with the Access Capital LLC proposal; Spahn said the planned townhouses would be rentals, that three-bedroom rents were projected around $1,595 and two-bedroom rents around $1,400, and that units would be two-story with two-stall garages.

Policy discussion and next steps: Council members asked about infrastructure, utilities and whether streets would be public or private; staff replied utilities exist for several sites but noted developers would install streets where needed. Several council members said they want a wider council discussion of the city’s tax-abatement term and the housing study results before changing policy. City staff said the housing study would be available by the end of the week after the council meeting and that staff will deliver the study to council members. One council member said surrounding communities have extended exemptions to 10 years following changes to the state’s treatment of the school portion of exemptions, and recommended the city review its program to remain competitive.

Votes at a glance: the council adopted each resolution on voice/roll-call votes recorded on the meeting record as carried. The transcript excerpts show roll-call confirmations (for example: “Goodchild, Witt/Wick, Sturgeon” and others) and indicate each motion carried. The transcript does not provide a complete, unambiguous roll-call record for every motion in the excerpts provided; the official minutes should be consulted for the formal roll-call tally and record of individual votes.

What the approvals do and what they do not: the council’s action authorizes the city to submit applications and fulfill the local match by using the Urban Revitalization Plan tax exemption; the council did not adopt a change to the city’s abatement term at this meeting. Council members requested a future agenda item to review the abatement term and the housing study results before any policy change.

Context: Council discussion referenced competitive pressures from nearby communities and the recent state-level change that removed the school portion from the exemption calculation, which reduces the value developers receive from the local exemption. Several council members said they want to preserve housing supply balance and avoid becoming “top heavy” with rentals in parts of the city.

The city manager or staff indicated that additional administrative steps will follow if developers receive IEDA awards, including paperwork and infrastructure coordination. The meeting record shows the council moved on to other agenda items after the housing resolutions were adopted.