Washington considers annexation along Country Club Road

The city of Washington is considering a sewage infrastructure project that would annex 43 acres of unincorporated land south of town.

City Administrator Brent Hinson said the city’s involvement would help save costs and improve the quality of the subdivision planned for the area.

“Theoretically, if we do not bore a new sewer to this area, the only way that it can get developed is to put in a sewer lift station,” Hinson said. “That’s far, far more expensive than boring a new sewer. It’s a little over $100,000 project that will help us get the sewer deeper to this property and help facilitate that.”

Because the 31-lot subdivision is outside city limits, Hinson said help from the city would require a voluntary annexation and rezoning of the unincorporated land alongside a development agreement.

Hinson initially proposed the move as a potential use of American Rescue Plan Act funds at a July 20 City Council meeting but has since said the project could be accomplished with tax increment financing. Doing so would get the job done, but generate lower returns than typical for such expenditures.

“Any new taxes created from that new housing goes into the special TIF fund to pay that back,” Hinson said. “Residential can barely pay for itself because of the way the tax system is set up … but you still do it, because you want people to live in your town, and those additional people bring in additional benefits to your town.“

Mayor Jaron Rosien said TIF spending on the project would insulate taxpayers from the costs.

“The current proposal for infrastructure uses TIF, and therefore uses incremental financing to pay for itself,” he said. “We’re not proposing raising taxes on other citizens’ homes to pay for the construction of these homes. The construction of these homes would pay for the infrastructure.”

Council member Steven Gault disagreed with the use of American Rescue Plan funds on the private development during the July 20 council meeting.

“I see no reason that we are helping a private developer with a sewer problem that can be done with a lift station and be their responsibility,” Gault said. “We have other places to spend this money … We need to be spending our money on our own projects, not some developer who's developing housing for what I would classify as the mega-rich of Washington, Iowa.”

Gault did not respond to a request for comment about other ways for the city to pursue the project, such as TIF spending.

Rosien said the city had reason to encourage housing developments of any price range, given the community’s shortage of homes.

“The city has a tremendous need for housing,” he said. “There is a proven domino effect that when one type of house is built, another type of house is sold and purchased by someone that frees up yet another type of house. All categories of housing are related.”

Subdivision developer Jeff Hazelett pushed back against Gault’s comments, saying plans for the neighborhood involved a variety of housing at diverse price points, including low to moderate income units.

“The comment that this is for the mega rich couldn’t be further from the truth,” Hazelett said. “Townhomes themselves can reach a price point in the $180-$190 (thousand), that kind of range. The duplexes can reach, on the lower side, the low $200 (thousands).”

While he couldn’t guess at exact costs yet, Hazelett said the development would not be possible without help from the city.

“Once a person sees the numbers of what it takes to develop it and the cost of land and all that kind of stuff added together, it’s very easy to see,” he said. “There is no way without an economic tool like TIF you could do a development of that nature. It cannot be done.”