Joint meeting discusses housing development in Jeff and the county

Looking for plan to use public funds as incentive for private investment

A proposal to fund a consultant to develop a plan of financial incentives for potential housing developers will be on the agendas of the county board of supervisors and the Jefferson city council in the near future. The proposal will come from the Greene County Development Corporation.

The decision was made by consensus at a joint meeting Tuesday morning of the Jefferson city council, the county supervisors, the GCDC executive board and the Grow Greene board. The entire Jefferson city council attended, but John Muir and Guy Richardson, who is also a member of the GCDC board, were the only supervisors there. In all, 20 board or council members and a total of about 35 persons attended.

The meeting was called as a next step following presentations by Terry Lutz of McClure Engineering last month to the supervisors and the Jefferson city council. The initial contact with Lutz was made by GCDC.

In his presentations Lutz discussed the challenge of building housing in rural Iowa, a challenge that was demonstrated last fall as J-Corp of Huxley tried to finance rental housing units in Jefferson. Income levels in rural communities have not kept pace with rising costs of construction, making the financial risk to developers prohibitive. Appraisals done to secure financing for the J-Corp project showed that at the wages paid in the area, the monthly rents needed would not be affordable for enough people to make the project financially viable.

The Jefferson city council and the county supervisors were both asked to apply for a loan through the Iowa Finance Authority and then make those funds available to J-Corp. Neither group agreed and ground has not been broken on the project.

GCDC board member Sid Jones chaired the Tuesday morning meeting. He started with an assumption that everyone there agrees there is a need for more housing in the county. He said the meeting was not about finding a way to finance the J-Corp project. “What it is about is a county-wide model for a public-private financing package. Does that have merit, regardless of who the developer is, and regardless of what community in the county has the opportunity?” Jones said.

The joint meeting was a chance for all groups to share their thoughts, Jones said, and to find a way to move forward. “How do we put ourselves in the position to actually build some sort of alternative housing in this county? All of us know there’s a need,” he said.

Richardson said a public-private partnership is needed “to make housing happen.” He said he is concerned about using public dollars in private projects. “That’s why we need to talk about a model that we can introduce and develop that protects public monies… While there’s a place for grant monies, when it’s coming from public boards, in a county this size and cities the size we have here, I think that money should be protected. If you have that kind of partnership, there needs to be an equity position. That public body needs to have an opportunity to get the money back for the taxpayers,” he said.

All agreed that a study of available housing and needs be completed. Discussion centered on whether the Jefferson council’s housing committee was able to collect the information needed, or whether Region XII Council of Governments or McClure Engineering should do it.

Norm Fandel, Grow Greene board president, said Region XII did a housing study 15 years ago. “We never had a plan in place to move it forward and it sat on the shelf,” Fandel said. “Moving forward is the financial part, and that’s the difficult side of it. There does have to be balance. If it’s investment that benefits the community as well, and there’s a balance between a tax abatement, I’d rather say than a grant, in that process, or if there’s TIF in the project, you’ve got to put those tools in place and have the right balance moving forward.

“Our discussion today is not only about housing, but about all the other projects that we’ve put up on a white board and they sit in the parking lot because we don’t have the finances, we don’t have a process in place to get them out of the parking lot. Right now is the perfect opportunity to look at how we assemble those dollars. We just invested $900,000 in the county (Grow Greene distribution). Let’s keep that foresight and move forward. This is the right time to put that financing package together if it’s going to happen,” Fandel said. He said there are parties willing to build here, but they need a financial package that lets a project cash flow.

Larry Saddoris, who owns and manages several rental properties here, agreed. Saddoris said that he would build new housing only if it would cash flow. “It comes down to jobs. What are pay scales? From what I’ve seen, a couple of businesses have come to town and I’ve turned them (employees needing housing) away because they can’t pay rent. If there’s a couple living there, that’s fine. They can pay rent. But if one of them leaves, they can’t pay the rent. They can’t afford it,” he said. “If we could build housing and make it work, that’s fine, but it’s got to have a return.”

His wife Margaret Saddoris added that if the financing package included grant funds that required income-based guidelines, they would not participate.

Local developer Mark Bauer also said that the income of the people looking for housing is part of the problem. He said he has many lots available but that the cost of new construction makes that option not possible for many newcomers to the county.

Jefferson council member Dave Sloan said there is no choice but to develop a model for public-private financing, and that no one locally has the expertise for the job.

Jones suggested that an advantage to having an “outsider” develop the plan is that he “could push the agenda and not allow politics to slow that down.”

Lutz’s proposal for developing a plan has a $39,000 cost, with a suggestion that the city of Jefferson and Greene County each pay $11,700, and Grow Greene and GCDC each pay $7,800.

The supervisors and the Jefferson city council will have on their agendas a proposal to approve the concept of sharing funding for the study, and then a more specific proposal from McClure Engineering. Those proposals will come from GCDC to streamline the process. The Grow Greene and GCDC boards will also discuss their potential share of payment.

Jefferson mayor Craig Berry said he would brief the mayors of the county’s other towns and ask for their input in the process.

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