MASON CITY — A planned 45-unit senior housing development near the Northbridge area of Mason City is now not expected to move forward after the developer determined there was an approximately $1 million gap between available funding and the cost to complete the project.
According to a June 30, 2026, memorandum from Mason City Development Services Director Steven J. Van Steenhuyse to City Administrator Aaron Burnett, Horizon Development Group, Inc. informed city staff last week that it was withdrawing from the project.
The project, known as Encore Senior Living, was planned for vacant city-owned land on the bend of northbound U.S. Highway 65, where North Delaware Avenue/U.S. 65 turns into North Federal Avenue, across from the Fareway store.
City staff said Horizon had already invested a significant amount of money into planning, engineering and architecture before deciding to withdraw.
The proposed development had been viewed as a win for Mason City’s housing efforts. In 2024, Mason City was named an Iowa Thriving Community, a designation that helped make the city more attractive for housing tax credit projects. Developers seeking Low Income Housing Tax Credits or Iowa Workforce Housing Tax Credits could gain additional approval points for projects in Mason City because of that status.
The city released a request for proposals for the Northbridge-area site and, after reviewing several proposals, staff recommended Horizon’s plan for a 45-unit low-income senior housing development. The project was expected to use Low Income Housing Tax Credits and other funding sources.
The Mason City Council approved Horizon’s proposal on November 19, 2024. On February 4, 2025, the city entered into a purchase and sale agreement with Horizon Development Group.
Since then, city staff had worked with Horizon on a site plan, which was approved by the Development Review Committee. At Horizon’s request, portions of a public utility easement around the lot were also vacated by the council on April 21, 2026. City staff said that, at the time, all signs pointed to a successful project.
But the finances later failed to line up.
As NIT previously reported, the Horizon project had secured a major award through the Iowa Finance Authority, including $1,293,687 in annual federal housing tax credits for 10 years — nearly $13 million over the full period. The project also received $500,000 in HOME program funds and $500,000 through the National Housing Trust Fund. Readers can view NIT’s earlier story here: Mason City senior housing development snares 10 years worth of $1.29 million in federal tax credits.
The current city memo says Horizon ultimately found an approximately $1 million gap between the available funding and the total project cost.
City staff is now recommending approval of a resolution accepting a termination agreement with Horizon Development Group and authorizing its execution. The termination agreement ends the February 2025 purchase and sale agreement.
The city will retain the $1,000 in earnest money paid by Horizon.
According to the memo, the resolution will have no impact on the city’s operating budget.
The collapse of the project leaves the city-owned land still undeveloped and removes what had been expected to become another senior housing option in Mason City. The development would have added affordable senior rental units at a prominent entrance point into the downtown area, near other recent housing and redevelopment efforts.