County favors established residential areas for tax incentive

Union County Board of Supervisors gave consensus Monday to emphasize new residential construction as part of a tax abatement incentive during discussions Monday.

For months, the county has reviewed legalities and details involving tax breaks for people who build a new house. The state will allow residential development 100% of taxes on the first $75,000 of new value added for a maximum of five years. Supervisors would have to determine the boundaries for the area the program can be utilized.

Supervisors met with Jenna Sabroske, representing Ahlers Cooney law firm, about the details of the county’s proposed ordinance.

“The consensus is county wide,” said Supervisor Rick Friday about the area where supervisors want the program to be implemented. Sabroske said she does not know of an Iowa county that includes the entire county in their plan, mainly because of the additional work required.

“It is certainly possible, but it will take the most work to get in place and there is going to be a lot of hurdles you have to cover including agricultural land,” she said. “If there is land that meets the definition of ag land, you are going to have to seek property owner consent.”

Sabroske suggested a “targeted area” that is expected to develop and see how it progresses, then add additional areas, or county wide, later. County officials are aware of potential housing development on the former Pine Valley Golf Course west of Creston. She said targeted areas are usually defined by legal descriptions.

“If you try to target just properties assessed as residential through the county, it will be a lot easier than doing a true, county wide,” Sabroske said. “If residential is what you are hoping to incentive, I would just target residential properties. the first easier would be targeted areas. The second easiest would be trying to identify other residential tax parcels.”

Union County has more than 8,000 parcels.

She said the plan has to be adopted before any construction starts for that new construction to be included in the plan.

“If someone started this fall and the plan is not in place yet, it’s not going to qualify,” she said. “Some construction after the plan starts may qualify.” Supervisors hope to have the plan in place January 2023. Sabroske suggested knowing the targeted areas by early August to meet the legal timelines to start in January. That would include a public hearing in October and time for residents to petition. A petition may alter the timing.

Supervisor Ron Riley said if a person was building an eligible house, but not in the targeted area, they will not receive the incentive. Riley said it would not be cost effective to amend the ordinance with each new property built, but not in the targeted area.

Sabroske said the ordinance can be amended as additional land is included.

Part of the legalities includes notifying property owners in the targeted area of the plan weeks before a public hearing scheduled by the supervisors. Formal consent forms allowing construction on land considered agricultural also need created and submitted. Manufactured houses can be included in the program, but the same house can’t be moved to another eligible property in the future to receive the same tax break.

Previous discussions included having blight areas in the tax incentive plan. Supervisors agreed to consider that in the future.