Iowa League 17 Using Urban Renewal Tools to

#Iowa. League 17 Using Urban Renewal Tools to Promote Growth Jason Comisky, Ahlers & Cooney Handouts and presentations are available through the event app and at www. iowaleague. org.

Jason Comisky Ahlers & Cooney, P. C. 100 Court Avenue Des Moines, IA 50309 -2231 jcomisky@ahlerslaw. com Telephone: 515 -246 -0337 2

CAVEAT • This presentation is intended for general informational purposes only. Answers to legal questions about Iowa urban renewal law can vary greatly depending upon the specific facts in a given situation. Please consult an attorney. 3 ©Ahlers & Cooney, P. C. - All Rights Reserved

What We Will Discuss Today • • Urban Renewal and Tax Increment Financing Urban Renewal Projects and Incentives Cycle of Urban Renewal Project and TIF Reimbursement Basics about other economic development tools 4 ©Ahlers & Cooney, P. C. - All Rights Reserved

Urban Renewal Area vs. TIF District • Urban Renewal Area is created by Urban Renewal Plan o Where you can conduct Urban Renewal Projects such as: • Infrastructure • Development Agreements • Blight Remediation Urban Renewal Project must be identified in Urban Renewal Plan/Amendment • Urban Renewal Plan/Amendment adopted by Resolution • Urban Renewal Projects can be financed a number of ways o General Obligation Bonds o General Fund o Tax Increment Financing (just one mechanism) • Bulk of Iowa Code Chapter 403 dedicated to Urban Renewal powers and procedures o 5 ©Ahlers & Cooney, P. C. - All Rights Reserved

Urban Renewal Area vs. TIF District • Tax Increment Financing (TIF) o A reimbursement mechanism for Urban Renewal Projects • Concept is to capture the incremental (increased) taxes generated from the construction of buildings/expansions • Frozen base (everyone continues to receive all taxes from the frozen base value) • Tax Increment generated (new value - frozen base value) • Everyone benefits – eventually o o o TIF District must be within Urban Renewal Area but need not cover entire Urban Renewal Area TIF District created by Ordinance (as opposed to Urban Renewal Area created by Resolution) Primarily discussed in Section 403. 19 (one section of Ch. 403) 6 ©Ahlers & Cooney, P. C. - All Rights Reserved

Urban Renewal Area vs. TIF District • How They Work Together: o TIF can be used for Urban Renewal Projects within the geographic boundaries of the Urban Renewal Area if authorized by the Urban Renewal Plan/Amendment o Questions • Is the Urban Renewal Project within the geographic boundaries of the Urban Renewal Area? • Exception: LMI set aside. • Does the Urban Renewal Project qualify under Iowa Law? • Iowa Code Section 403. 6 • Iowa Code Section 403. 12 • Is the Urban Renewal Project adequately described in the Urban Renewal Plan/Amendment? • Will the Urban Renewal Project achieve approved goals? 7 ©Ahlers & Cooney, P. C. - All Rights Reserved

Typical TIF District • TIF District (coterminous with Urban Renewal Area) • This is a specific geographic area, usually described by its boundaries. The Tax Increment from this TIF District can be captured by the City as reimbursement for Urban Renewal Projects. • Urban Renewal Area (red) TIF District (green) 8 ©Ahlers & Cooney, P. C. - All Rights Reserved

Non-Coterminous TIF District • TIF District (non-coterminous with Urban Renewal Area) • This is a specific geographic area, usually described by its boundaries. The Tax Increment from this TIF District can be captured by the City as reimbursement for Urban Renewal Projects. • Urban Renewal Area (red) TIF District (green) 9 ©Ahlers & Cooney, P. C. - All Rights Reserved

Types of Urban Renewal Areas • 6 types of Urban Renewal Areas o The Urban Renewal Plan must designate the type of Urban Renewal Area as: Slum; Blight; Economic Development (Commercial & Industrial); Economic Development (LMI housing); Economic Development (non-LMI housing); or Mixed. • Why does it matter? o o o How long you can collect Tax Increment to advance an Urban Renewal Project in the Urban Renewal Area depends on the type of area Referred to as a “Sunset” Sunset also depends on: • When the property was put in the Urban Renewal Area; and • What the Urban Renewal Plan says • For example: Voluntary or Self-Imposed Sunsets 10 ©Ahlers & Cooney, P. C. - All Rights Reserved

Types of Urban Renewal Areas • Slum o o o This is an area where slum conditions exist and the city or county wants to eliminate those conditions • An area in which a predominance of buildings or improvements, whether residential or nonresidential, which: by reason of dilapidation, deterioration, age or obsolescence; by reason of inadequate provision for ventilation, light, air, sanitation, or open spaces; by reason of high density of population and overcrowding; by reason of the existence of conditions which endanger life or property by fire and other causes, is conducive to ill health, transmission of disease, infant mortality, juvenile delinquency, or crime and which is detrimental to the public health, safety, morals, or welfare. CAUTION: Slum area does not include real property assessed as agricultural property for purposes of property taxation. No statutory required sunset (watch for voluntary sunset) 11 ©Ahlers & Cooney, P. C. - All Rights Reserved

Types of Urban Renewal Areas • Blight o o o This is an area where blight conditions exist, and the city or county wishes to eliminate these conditions • Deteriorated or deteriorating structures; defective or inadequate street layout; faulty lot layout in relation to size, adequacy, accessibility, or usefulness; insanitary or unsafe conditions; deterioration of site or other improvements; diversity of ownership, tax or special assessment delinquency exceeding the fair value of land; defective or unusual condition of title; conditions that endanger life or property by fire or other causes; menace to public health safety or welfare in its present condition and use. CAUTION: Blight does not include real property assessed as agricultural property for purposes of property taxation. No statutory required sunset (watch for voluntary sunset) 12 ©Ahlers & Cooney, P. C. - All Rights Reserved

Types of Urban Renewal Areas • Economic Development – Commercial and/or Industrial o This is an area where a city or county wants to create or retain jobs and income and strengthen the economy by promoting the development of new business and industry or by retaining existing business and industry. o CAUTION: Economic Development – Commercial and/or Industrial areas cannot include agricultural land or century farm land unless the owner consents. o If the Urban Renewal Plan was adopted after 1/1/95 and no part of the Urban Renewal Area contains slum or blight and if no voluntary sunset has been adopted, then it has a 20 year statutory sunset 13 ©Ahlers & Cooney, P. C. - All Rights Reserved

Types of Urban Renewal Areas • Two Kinds of Housing Areas o o Economic Development – LMI Housing Economic Development – Non-LMI Housing • What is LMI? o o LMI stands for Low and Moderate Income and is defined in Section 403. 17(14) as “…those families, including single person households, earning no more than eighty percent of the higher of the median family income of the county or the statewide nonmetropolitan area as determined by the latest United States department of housing and urban development, section 8 income guidelines. ” Where to find County specific information about LMI? • The 80% county income figures can be found on the IEDA website under Community Development/CDBG Management Guide and Other Resources. • The percentage of residents at (80%) income by county can be found on the HUD Exchange website. • https: //www. hudexchange. info/programs/acs-low-mod-summarydata/acs-low-mod-summary-data-local-government/ (click on Iowa). 14 ©Ahlers & Cooney, P. C. - All Rights Reserved

Types of Urban Renewal Areas • Economic Development – LMI Housing o This is an Urban Renewal Area where the city or county wants to promote development or construct improvements to promote housing opportunities for only LMI persons. o Still get a 20 year statutory Sunset o Housing for LMI • Documentation that income of residents does not exceed LMI maximum • Documentation that the housing is affordable to LMI residents o Can use Tax Increment for a variety of purposes (land purchase, rebates of increment, loans, grants, etc. ) 15 ©Ahlers & Cooney, P. C. - All Rights Reserved

Types of Urban Renewal Areas • Economic Development – Non-LMI Housing o This is an Urban Renewal Area where a city or county wants to help fund the cost of Public Improvements to serve housing that is too expensive for LMI persons. This type of Urban Renewal Area should only be mixed with one of the other types when the effect that it might have is fully understood and accepted. o 3 things to remember: • Public Improvements. Can only use TIF to reimburse Public Improvements (e. g. , streets, sidewalk, water lines, sanitary sewer, storm sewer, etc. ) • Shortened Sunset. 10 fiscal-year Sunset. If the municipality has a population under 15, 000, the 10 fiscal-year Sunset can be extended by an additional 5 years with the written permission of the other affected taxing entities (e. g. , city, school, county). • LMI set-aside. Percentage of Tax Increment must be set-aside into a special LMI Fund to be used to provide housing related assistance to LMI persons 16 ©Ahlers & Cooney, P. C. - All Rights Reserved

Types of Urban Renewal Areas • Economic Development – Non-LMI Housing o LMI set-aside. The amount of money you must spend on housing assistance for LMI persons when you undertake a non-LMI housing project. Either set aside cash or satisfy LMI obligation, in whole or in part, by proving the houses are occupied by LMI families or are affordable to LMI families • Calculation: • Percentage of LMI persons in your county x TIF Reimbursement • Examples of how to spend LMI set-aside: • Lots for LMI housing within or outside the Urban Renewal Area • Construction of LMI housing within or outside the Urban Renewal Area • Grants, credits, or other direct assistance for housing to LMI families within or outside the Urban Renewal Area, but within the municipality 17 ©Ahlers & Cooney, P. C. - All Rights Reserved

Types of Urban Renewal Areas • Statutory Sunsets o o o Slum or Blight • No statutory sunset Economic Development (Commercial and/or Industrial) • Post 1/1/95 Urban Renewal Plan and no part is Slum or Blight • 20 years from calendar year after 1 st certification of debt Mixed Economic Development and Slum or Blight • No statutory sunset Economic Development - LMI Housing • 20 years from calendar year after 1 st certification of debt Economic Development - Non-LMI Housing • 10 fiscal years starting with 2 nd fiscal year after 1 st certification of debt, (can extend to 15 years with consent of other taxing entities if under 15, 000 population) Beware of voluntary sunsets (common in 80’s and 90’s) 18 ©Ahlers & Cooney, P. C. - All Rights Reserved

Ag Land Restrictions • Property assessed as agricultural property for property taxation purposes cannot be Slum or Blighted area • Economic Development – Commercial and Industrial areas cannot include Agricultural land or century farm land unless the owner agrees (written consent) • Agricultural land is defined in 403. 17 as: o o 10 acres or more and not divided into lots of less than 10 acres Used for the production of ag commodities during 3 out of past 5 years Includes land on which is located farm residences or outbuildings used for ag purposes Includes land set aside for environmental protection or preservation 19 ©Ahlers & Cooney, P. C. - All Rights Reserved

TIF Computations and Considerations • Certification of Debt • Certify debt to County Auditor by December 1 o o Debt = Loans, advances, indebtedness, or bonds, including interest thereon This is amount of reimbursement you are seeking for qualifying UR Projects from available Tax Increment. • Certification creates a duty of the auditor to provide for division of taxes in each subsequent year without further certification until debt reimbursed (or TIF sunsets) • Auditor pays Tax Increment into Special TIF Fund 20 ©Ahlers & Cooney, P. C. - All Rights Reserved

TIF Computations and Considerations • Impact of Certifying Debt on Frozen Base and Sunset • Carefully consider when to certify debt because first certification of debt in Urban Renewal Area: o Sets Frozen Base for taxable property in the TIF District (which is in the Urban Renewal Area) using the assessed value of the property as of January 1 of the calendar year preceding the calendar year in which certification was filed. • Amendments have different rule – Frozen Base is set for the property as of January 1 of the calendar year preceding the effective date of the ordinance amending the TIF District to include the property. o Starting the clock on any TIF District Sunset: • Econ. Dev. – clock begins to run from the calendar year following the calendar year in which the municipality first certifies debt • Non-LMI Housing – clock begins to run from the second fiscal year after the year in which the municipality first certifies debt 21 ©Ahlers & Cooney, P. C. - All Rights Reserved

TIF Computations and Considerations • How to Calculate TIF • New Value After Improvements …………………… $2, 000 • Frozen Base Value…………………………. . $ 50, 000 • Difference in Assessed Value…………………… $1, 950, 000 Combined Tax Levy ……………. $32/$1, 000 Less: Debt Service Levies, Physical Plant and Equipment Levy (PPEL), Instructional Support Levy (ISPL), Joint City/County Bldg. Taxes…. …………. . $ 4/$1, 000 Net TIF Levy……………. . . … $28/$1, 000 Net TIF Levy times Difference in Assessed Value = Tax Increment ($28/$1, 000) x $1, 950, 000 = $54, 600 Tax Increment per year 22 ©Ahlers & Cooney, P. C. - All Rights Reserved

Cycle of Urban Renewal Project and TIF Reimbursement Identify Urban Renewal Project City wants to undertake/assist (January 2018) Determine funding source (not 403. 19 TIF Fund) (February 2018) Reimbursement from TIF Fund to Advance Fund (FY 2020 -2021) Adopt Urban Renewal Plan or Amendment establishing Urban Renewal Area and authorizing project (April 2018) Tax Increment paid into 403. 19 TIF Fund (FY 2020 -2021) Debt is incurred and the project is completed (November 2018) Tax Increment becomes available (FY 2020 -2021) TIF Certification (before Dec. 1, 2019) 23 Project is fully assessed (January 1, 2019) ©Ahlers & Cooney, P. C. - All Rights Reserved

TIF Computations and Considerations • TIF is a Reimbursement Process. • The City or County certifies loans, advances, indebtedness or bonds. • Tie these 3 things together: 1. 2. 3. Authority for the Urban Renewal Project in the Urban Renewal Plan (description and dollar amount). Resolution by Council/Board approving the expenditure as an Urban Renewal Project, authorizing payment, and qualifying it to be included in December 1 certification to county. December 1 certification to the county auditor of the expense. 24 ©Ahlers & Cooney, P. C. - All Rights Reserved

Political Considerations • Educate, Educate o No Surprises • Not a magic bullet o o Balance various interests Realize risks • Be prudent o Prioritize needs o Incur debt for highest need o Pay off debt with TIF o Incur new debt for next need o Pay off debt with TIF 25 ©Ahlers & Cooney, P. C. - All Rights Reserved

Urban Renewal Area Adoption Process • Who Has The Power? • Cities and Counties have the ability to form an Urban Renewal Area by the adoption of an Urban Renewal Plan. o Usually adoption of Urban Renewal Plans are done separately by the City and County, but in some cases the City and County may work together on an Urban Renewal Project o City needs the consent of the County to adopt an Urban Renewal Plan within 2 miles of the City o County needs the consent of the City to adopt an Urban Renewal Plan within 2 miles of City limits or within the City limits 26 ©Ahlers & Cooney, P. C. - All Rights Reserved

Preparing the Urban Renewal Plan • Urban Renewal Plan contents o o o o o Urban Renewal Area Legal Description Designation – Slum, Blight, Econ. Dev. , Mixed Frozen Base Value Conformity with the general plan for the physical development of the City as a whole Objectives Activities Urban Renewal Projects Financial information (debt limit & outstanding debt) Ag Land consents Effective Period – voluntary or statutory sunsets 27 ©Ahlers & Cooney, P. C. - All Rights Reserved

Urban Renewal Plan Adoption Process • First Meeting o Put item on Agenda o First Meeting • Resolution • Declare Necessity • Set Consultation Meeting • Set Public Hearing and Order Publication of Notice • Set P & Z Meeting • Attach Plan to Resolution as Exhibit 1 28 ©Ahlers & Cooney, P. C. - All Rights Reserved

Urban Renewal Plan Adoption Process • Planning and Zoning Commission o P & Z must provide recommendation as to whether Urban Renewal Plan is “in conformity with the general plan for the physical development of the municipality as a whole” • “general plan” is often the comprehensive plan. o P & Z must be given up to 30 days to provide its written recommendation • Can work with P & Z as to required time-period o P & Z must provide written recommendation prior to public hearing o If no P & Z then Council/Board should make requisite finding o P & Z consideration NOT required for Amendment 29 ©Ahlers & Cooney, P. C. - All Rights Reserved

Urban Renewal Plan Adoption Process • Approving the Urban Renewal Plan o Put item on Agenda o Second Meeting • Hold Public Hearing • Record comments • Pass Resolution adopting Urban Renewal Plan • Record Resolution with Urban Renewal Plan attached 30 ©Ahlers & Cooney, P. C. - All Rights Reserved

TIF Ordinance Passage Process • Put item on agenda o Consider TIF Ordinance only AFTER Urban Renewal Plan has been adopted • Can be at same meeting Urban Renewal Plan is adopted • Follow ordinance passage process o o GENERALLY – requires three readings unless additional readings suspended GENERALLY – effective upon publication following final passage • City – Iowa Code chapter 380 • County – Iowa Code § 331. 302 • File Ordinance with County Auditor and get Certification o Iowa Code 403. 19(5) 31 ©Ahlers & Cooney, P. C. - All Rights Reserved

• Receive reports • Resolution to: on consultation • Set public • Receive report hearing date from P&Z (not required for amendments) • Refer to P&Z • Set consultation A DA 5 T AS LE AT Council/Board S ASAP (new plan only) • Report to LES (new plan only) OR • Receipt by P&Z AYS consultation to affected taxing entities. response to affected taxing entities 7 D • Notice of public hearing • Written YS plan attached AFFECTED TAXING ENTITIES P&Z (not required for amendments) 7 • Resolution with • Notice of • Pass Ordinance AT • Send copy of: permission of all Ag owners and city/county joint agreement (if applicable). • Hold Hearing LE SA P • Obtain written CLERK/ AUDITOR OR DESIGNATED STAFF Hold Consultation T date DA YS (not required for amendments) AS COUNCIL/BOARD • Affected taxing entities may provide written comments about plan. NOTMORE THAN 30 DAYS • P&Z report to council/board (new plan only) 32 • Publish Ordinance • Record Plan

Pros and Cons of Urban Renewal/TIF • Pros o o o Broad Application – Slum, Blight, Econ. Dev. , Residential Wide Utility – Infrastructure, Development Agreements Powerful – Capture City/County/School Taxes • Cons o o o Complicated Adoption Complicated Yearly Requirements: Amendments/Certification Complicated Concepts/Confusion Limitations • TIF Hair Cut • Sunsets • Ag Land • Relocation limitation Legislative Uncertainty 33 ©Ahlers & Cooney, P. C. - All Rights Reserved

Urban Revitalization- Ch. 404 • City or County can adopt an Ordinance establishing an Urban Revitalization Area after it adopts an Urban Revitalization Plan for that Urban Revitalization Area. • The Plan/Ordinance allows a property owner to obtain abatement/exemption of property taxes on the new value of commercial, multi-residential and/or residential improvements on qualified real estate in the Area. • Available Schedules (404. 3/404. 3 A) o o o Residential – 100% for 5 years on first $75, 000 • Blight/LMI/Historical – more options up to 100% for 10 years. Commercial/Industrial – 10 year declining (80%, 70%, 60%, 50%, 40%, 30%, 20%, 20%) or 100% for 3 years Multi-residential or commercial with 3 or more living quarters and at least 75% residential – 100% for 10 years 34 ©Ahlers & Cooney, P. C. - All Rights Reserved

Urban Revitalization – Ch. 404 • Specify percent of increase in actual value due to improvements required to qualify for abatement: default = 15%; 10% for residential • Interplay with Urban Renewal – Ch. 403 o Can have different schedule for property in Urban Renewal Area o Make sure don’t count on increment if subject to abatement 35 ©Ahlers & Cooney, P. C. - All Rights Reserved

Urban Revitalization – Ch. 404 • Adoption Procedure o o Initial Council meeting to pass a resolution of necessity relating to the proposed Urban Revitalization Plan and scheduling public hearing. • The Urban Revitalization Plan must include at least twelve items specifically in Iowa Code Section 404. 2, including but not limited to: • the boundary of the Urban Revitalization Area, • an itemization of every property owner in the Urban Revitalization Area and the assessed value of the land buildings (listing the values separately), • the types of property eligible for abatement, • and the abatement schedule being utilized. Provide two types of notice of the public hearing: • Published notice AND • Mailed notice to the last known address of all owners of record and occupants of addresses located within the proposed Area 36 ©Ahlers & Cooney, P. C. - All Rights Reserved

Urban Revitalization – Ch. 404 • Adoption Procedure o Hold the public hearing and adopt the authorizing resolution for the Urban Revitalization Plan, subject to a thirty (30) day waiting period in which the Council may or may not receive a petition from a minimum percentage of land owners or occupants. • 10% of privately owned property; or • 10% of residential units o In the event of a valid petition, the Council will be required to hold a second hearing. o Adopt and publish the Ordinance establishing the Urban Revitalization Area following normal procedure. o This entire process will take at least 90 days AFTER the Urban Revitalization Plan is drafted 37 ©Ahlers & Cooney, P. C. - All Rights Reserved

Urban Revitalization – Ch. 404 • After the Urban Revitalization Plan is adopted, a qualified property in the Urban Revitalization Area does not receive the available abatement unless they apply for the abatement with the City and the City Council finds by resolution that the improvement satisfies the terms of the Urban Revitalization Plan and is qualified for the abatement. 38 ©Ahlers & Cooney, P. C. - All Rights Reserved

Urban Revitalization – Ch. 404 • Pros o o o Once Plan/Ordinance is in place it’s generally easier to administer • Benefits uniform/Individual agreement not necessary Powerful- Abates all Taxes on Improvement • No TIF haircut • Can abate residential (not limited to infrastructure) • Up to 100% for 10 years for multi-residential Urban Revitalization Plan Relatively Easy to Amend • Resolution following hearing • Notice published 7 days but not more than 20 days prior to hearing and cannot be earlier than next regularly scheduled meeting • Include language about adding annexed land • Cons o o Difficult Adoption Procedure – Individual Notice/Petition Less Flexibility – Like Property Gets Same Schedule Other Taxing Bodies Have No Control Over Adoption Of Schedule Statute Not Clear And Little Guidance/Regulations 39 ©Ahlers & Cooney, P. C. - All Rights Reserved

Industrial Abatement –Ch. 427 B • City or County can provide by ordinance for abatement/exemption of all property taxes for 5 years on a declining sliding scale from 75% to 15% (75%, 60%, 45%, 30%, 15%) for actual value added by new construction (including additions) of industrial real estate, distribution centers, research-service facilities and machinery and equipment assessed as real estate. • No dual exemption allowed 40 ©Ahlers & Cooney, P. C. - All Rights Reserved

Industrial Abatement –Ch. 427 B • "Research-service facilities" means a building or group of buildings devoted primarily to research and development activities, including, but not limited to, the design and production or manufacture of prototype products for experimental use, and corporate-research services which do not have a primary purpose of providing on-site services to the public. • "Warehouse" means a building or structure used as a public warehouse for the storage of goods pursuant to Chapter 554, Article 7, except that it does not mean a building or structure used primarily to store raw agricultural products or from which goods are sold at retail. • "Distribution center" means a building or structure used primarily for the storage of goods which are intended for subsequent shipment to retail outlets. o “Distribution center" does not mean a building or structure used primarily to store raw agricultural products, used primarily by a manufacturer to store goods to be used in the manufacturing process, used primarily for the storage of petroleum products, or used for the retail sale of goods. 41 ©Ahlers & Cooney, P. C. - All Rights Reserved

Industrial Abatement – Ch. 427 B • The ordinance may be enacted not less than 30 days after a 4/20 public hearing is held • The ordinance shall designate the length of time the partial exemption shall be available and may provide for an exemption schedule in lieu of that provided in Section 427 B. 3. o However, an alternative exemption schedule adopted shall not provide for a larger tax exemption in a particular year than is provided for that year in the schedule contained in Section 427 B. 3. • Apply for exemption with local assessor by Feb. 1 of first year when new value assessed 42 ©Ahlers & Cooney, P. C. - All Rights Reserved

Industrial Abatement – Ch. 427 B • Pros o o Easy to Adopt Easy to Administer No need for individual agreement No relocation limitation • Cons o o Limitations • Only industrial, etc. • Not retrofitting/remodeling unless necessary to compete as found by Council/Board following recommendation of IEDA • Can’t go above set statutory schedule No flexibility – one schedule fits all 43 ©Ahlers & Cooney, P. C. - All Rights Reserved

High Quality Jobs Creation • Iowa Code Section 15. 332 • Up to 100% abatement/exemption of all property taxes for up to 20 years (from year improvements first assessed) on actual value added by improvements (new, rehab. , expansion) directly related to new jobs under the program • Pros o o o Powerful – One of the Largest Exemptions Available No Plan/Ordinance to Adopt Flexible – Individualize the Agreement • Cons o o o Must be Tied to HQJ Creation/Approval by State Should Enter Agreement with Developer – Time/Effort to negotiate Agreement • Annual certification/verification Will be Required to Enter State Agreement • Coordinate with Development Agreement 44 ©Ahlers & Cooney, P. C. - All Rights Reserved

Economic Development Grant • Iowa Code Chapter 15 A o Allows City or County to provide loans, grants, tax incentives, and other benefits to private entities to further “Economic Development. ” • “Economic Development” is defined in Chapter 15 A as the creation of new jobs and income or the retention of existing jobs and income that would otherwise be lost. 45 ©Ahlers & Cooney, P. C. - All Rights Reserved

Economic Development Grant • Iowa Code Chapter 15 A o Limitations • City/County Must Determine (by Resolution) that Public Purpose Will be Accomplished by Making Grant • Must Consider Any or All of Factors in Code: • Diversify Economy • Exports/Tourism • Benefit Outweighs Funds Dispensed • Avoid Poaching Within State Unless Net Gain • Must Ensure No Environmental Issue • Must Ensure No Discrimination • Can Give More Credit to Development if in Blighted Area, Brownfield Area, or Enterprise Zone • Avoid Conflict of Interest 46 ©Ahlers & Cooney, P. C. - All Rights Reserved

Economic Development Grant • Iowa Code Chapter 15 A o Pros • Flexibility – Individual Development Agreements • No Plans/Ordinances Required • Easy to Adopt/Use o Cons • Limited to City/County’s Own Taxes/Funds • Will Need to Negotiate Development Agreement and Seek Annual Certification of Job Creation/Retention • Limited to Job Creation/Retention – Increased Property Assessment Not Enough 47 ©Ahlers & Cooney, P. C. - All Rights Reserved

Jason Comisky Ahlers & Cooney, P. C. 100 Court Avenue Des Moines, IA 50309 -2231 jcomisky@ahlerslaw. com Telephone: 515 -246 -0337 48