MASON CITY — A developer planning nearly 200 rental townhomes in Mason City could receive a 100% break on the city portion of property taxes generated by the new development for 10 years under an agreement headed to the City Council.
The Mason City Council will consider the development agreement with Willow Pointe, LLC at its Tuesday, September 15 meeting. The project is planned for the west side of North Eisenhower Avenue, north of the MercyOne West Campus.
City Development Services Director Steven Van Steenhuyse said Kading Properties has proposed a 198-unit, for-rent townhome development called Willow Pointe. The project would consist of four- and six-unit, one-story townhome buildings served by private streets.
The formal development agreement sets a minimum of 194 market-rate, multi-bedroom rental units. At least 98 units would be constructed during the first phase, which is required to be completed by September 30, 2029. The remaining units — up to 96 — would be constructed during a second phase under a timetable to be worked out between the developer and city.
Perhaps the most eye-catching piece of the proposed deal for Mason City property taxpayers is the city’s planned contribution.
According to the city, Mason City would provide Willow Pointe with an Urban Revitalization Tax Abatement equal to 100% of the city’s property taxes on the qualifying new value for 10 years.
That does not mean the development would necessarily escape every property tax imposed by other taxing bodies. The agreement concerns Mason City’s Urban Revitalization tax incentive and the city portion of the taxes.
City staff is working to amend the city’s Urban Revitalization Plan to make the project eligible for the 10-year abatement. The city says the tax break is its contribution toward the development and is tied to the project’s participation in Iowa’s Workforce Housing Tax Credit program.
As NIT reported earlier this month, Willow Pointe was awarded $1 million in Iowa Workforce Housing Tax Credits for an initial 98 housing units, the largest of several North Iowa housing awards announced by the state. The new city agreement reveals that those 98 units represent only the first portion of what could ultimately become a substantially larger development.
Under the proposed deal, the developer would be responsible for construction of streets, sanitary sewer, storm sewer, drainage and other infrastructure within the property. Streets and several other improvements would remain privately owned and maintained.
Water infrastructure is being handled differently.
The city’s plans call for extending a water main from the current northern end of North Eisenhower Avenue. Mason City wants a 12-inch water main in that area to provide capacity for future development, while Willow Pointe itself only requires an 8-inch main.
Under the proposed agreement, Kading would initially pay for the 12-inch line and Mason City would later reimburse the developer for the difference between the cost of an 8-inch line and the larger 12-inch line.
City staff said the tax-abatement arrangement will have no impact on the city’s current operating budget. The incentive instead concerns future city property taxes generated by qualifying improvements at the development.
The Willow Pointe proposal arrives as Mason City officials continue pushing for additional housing throughout the community.
Several other residential projects are currently moving through various stages of development, including apartments, townhomes and single-family housing proposals in different areas of the city.
If approved Tuesday, the Willow Pointe development agreement would establish the responsibilities of both the city and developer and clear another major hurdle toward construction of what could become one of Mason City’s largest new rental housing developments in years.