Cost to city more than $1.5 million
The Jefferson city council at its July 25 meeting approved a letter of support for a housing project spearheaded by Greene County Development Corporation on 27 acres of vacant land between N. Elm and N. Olive Sts, and Gallup Rd and Central Ave. The project would be constructed and owned by Kading Properties of Urbandale.
Kading proposes building 100 to 140 rental units, with the configuration of duplexes, town homes, and single family homes not yet determined.
GCDC owns 24 of the acres involved and intends to purchase three additional acres to make a more logically-shaped parcel. GCDC will give all 27 acres to Kading.
The project comes at a cost to the city, as there is no access road, water, or sanitary service to the site. The city would need to construct those, at an estimated cost of $1.2 million, along with a retention pond at an estimated cost of $380,000.
Kading also wants a 10-year tax abatement on the project.
Kading would build the infrastructure in the planned community, including streets. Kading possibly would keep ownership of the streets and would be responsible for snow removal and maintenance.
The units would be slab on grade construction, with baseboard heat and window air conditioning. They would rent at market rate, with no subsidies based on income.
City administrator Scott Peterson said the city would apply for a RISE (Rural Innovation Stronger Economy) grant for a share of its part of the project.
The council first heard about Kading’s interest in the property several months ago. Council members Harry Ahrenholtz and Darren Jackson, city building administrator Chad Stevens, along with GCDC director Ken Paxton and president Sid Jones then traveled to see other Kading projects. They were favorably impressed by what they saw.
At the time, Kading was prepared to purchase the property at a cost of $15,000 per acre. The project stalled on Kadings’ end due to a change in personnel. Paxton said Tuesday that GCDC’s offer to give Kading the property was an effort to get the project moving again.
“This has come to light again within the past two or three weeks,” Peterson said. “It’s exciting stuff.”
This time the council’s response to the proposed project was mixed.
Mayor Matt Gordon spoke more at the meeting than he has in recent months. He cautioned that with change orders, the cost of the infrastructure could be close to $2 million. “Before we rush into anything, we need to take a serious look at that 10-year tax abatement. We need to think if that’s something we’re going to be okay with,” Gordon said.
Jackson said a 10-year tax abatement has become “standard,” but admitted this project is larger than other recent projects.
Gordon replied that 10-year tax abatements were offered as an enticement when developers wouldn’t come to Jefferson because there were no comparable projects for them to use to prove the viability of a project in order to get financing.
“Now we’ve got people building here. I worry that if we continue indefinitely with this kind of tax abatement we’re going to regret it,” Gordon said.
“Housing is one of our critical difficulties. I’m not saying this is a solution, but 140 units would be an immense thing,” Jackson said.
Council member Matt Wetrich suggested Kading may be willing to negotiate on the length of the tax abatement. Peterson said he’d suggest that to Kading.
Kading Properties has projects in 26 other towns. Based on his earlier tour of Kading projects, Stevens said the project “would be a nice addition to the community.”
Stevens explained the changes in the proposal are due to the increase in building costs and financing costs since talk of the project first began. “On their (Kading’s) end, it’s hundreds of thousands of dollars more for the same project,” Stevens said. “That’s why they’re looking more seriously at the incentives GCDC has put together. The project got way more expensive really fast.”
Council member Dave Sloan made a motion, seconded by Jackson, to approve sending a letter of support for the project to Kading Properties. The motion was approved by 4-0 vote, with Ahrenholtz absent. The mayor presides at meetings but does not vote.
