Washington Evening Journal
111 North Marion Avenue
Washington, IA 52353
The Washington City Council unanimously voted to revise urban renewal plans in pursuit of a development agreement for the MSJ subdivision planned along Country Club road after a public hearing Tuesday night.
“I think I can speak for council to say we are supportive of overcoming the housing obstacles that we have in our community,” Mayor Jaron Rosien said. “We’ve been wanting to that for a long time, wanting to do that wisely, however, and in a responsible way, which is why it’s important to workshop this item.”
The city, after some negotiation, has agreed to fund the project through a development-based agreement, rather than a rebate agreement as previously planned.
“Before it was listed that MSJ would complete the public infrastructure and we would pay them back with TIF,” City Finance Director Kelsey Brown said. “As discussed at our last meeting, that was not what they desired at all, so we reworked things and put it so the city would construct the public infrastructure and pay ourselves back with TIF.”
Brown said the former plan required too much upfront investment from the developer.
“That takes a lot of capital at the beginning that they either don’t have or don’t want to put up, so the city has a better ability to do that,” she said. “It is more risky for the city … but if they don’t have the capital up front to put out for it anyway, then it’s not going to happen.”
Elliott Realty Group Associate Jeff Hazelett, who has led the negotiations with the city, said the new agreement would compensate for that risk by holding the developer accountable.
“If I sat across from the developer and sat where you sat, it’s the exact way I’d want to do it,” he said. “It simply states that if we don’t go out and do what we’re promising to do at a certain time with a certain number of (houses) being built per year, that money has got to be paid back from us.”
Hazelett said the lots would be open to any builders from the start.
“It will be available from Day One to everyone, all builders are welcome to come build this project,” he said. “And I think we can put some stuff in the development agreement to show that it will be … at the end of the day, we want to sell some lots, we want to build some houses.”
In order to gather the needed TIF funds, the city had to extend the payback date for that financing from 10 years to 15, a move that required approval from the Washington school district and Washington County Board of Supervisors, both of which voted unanimously in favor.
“Having infrastructure put in for housing developments helps the district in the long run,” school board Secretary and Business Manager Jeff Dieleman said. “New housing means new kids, so it’s definitely a good thing to be on board with.”
The subdivision promises big impacts for the community. Hazelett said the average property value on single-family houses in the subdivision would come out around $325,000, but that some units would likely fall below that level.
“Each unit in a duplex could be in a range from 200,000 to 250,000, and then there’s also an opportunity for some multifamily like some town homes, so we can cover a pretty good gamut of values,” he said. “There will be more single family homes than anything else.”
Additionally, city officials said the returns on the development agreement could assist low to moderate income housing efforts elsewhere in the city.
“If this project goes forward, plus the amount of money that we’re stashing away, we’re going to have a pretty sizable balance that could maybe do an entire subdivision of low and moderate income,” Brown said.
Economic officials say the addition of the subdivision’s 30 lots at a high property value would have its own positive ripple effects on other housing needs throughout the city.
“I think this is such an important project for our community,” Washington Economic Development Group Director Mary Audia said. “Once we get a subdivision like the country club subdivision, that will free up a number of homes that can bring in new people to Washington and continue supporting our workforce.”
While the development agreement has gone through a great deal of back and forth to get this far, Hazelett said developer relations with the city remained high.
“The city has worked hard, the city council members have been great to work with, Kelsey and Sally have been great to work with,” he said. “During the transition while Hinson was gone, they have been overloaded and overworked, so I appreciate all the things they’ve done, their willingness to work through it, their flexibility.”