HomeMy WebLinkAbout1994-03-01 Public hearing
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ORDINANCE NO,
AN ORDINANCE AMENDING CHAPTER 36 OF
THE CODE OF ORDINANCES OF THE CITY OF
IOWA CITY, IOWA, ENTITLED "ZONING," BY
AMENDING SECTION 36-20.5, ENTITLED
"CENTRAL BUSINESS SUPPORT ZONE."
WHEREAS, the City has adopted the Central
Businass Support Zone lCB-5) to encourage the
orda~ly development of commercial and
residential land uses in the Naar Southside
Neighborhood; and
WHEREAS, tha Planning and Zoning
Commission has determined that amendments
are needed to clarify the dimensional require-
ments of the CB-5 zone,
NOW, THEREFORE, BE IT ORDAINED BY THE
CITY COUNCil OF THE CITY OF IOWA CITY,
IOWA:
SECTION I, AMENDMENTS.
Chapter 36, Article II, entitled "PRINCIPAL
USES AND REQUIREMENTS," Division 1
entitled "ZONES", Section 36-20.5 entitled
"Central Business Support Zone ICB-5)" of
the Code of Ordinances of the City of Iowa
City, Iowa, is hereby amended by repealing
subsection leI and adopting a new
subsection Ie) to read as follows:
(el Dimensional reauirements.
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(1) Minimum lot area: None
(2) Minimum lot width: None
('31 Minimum lot frontage: None
(1;1 Minimum 'lards:
'front - None except the first story of
buildings which abut Burlington
Street shall be set back 10 feet
from the right-of-way line.
Building columns supporting
upper stories may be located
within this ten-foot setback
provided an adequate
pedestrian passageway Is
maintained.
Side - None
Rear. None
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(51 Maximum front yard 12 ft,
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Ordinance No.
Page 2
(6) Minimum building
height: 35 ft.
(7) Maximum building bulk:
Height -
Lot coverage -
Floor area ratio:
Permitted base.
75 ft,
None
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3.0 above grade
4.0 including
basement or cellar
Maximum with 5.0 above grade
approved bonuses (see Sec. 36-
20,5lill
6.0 including
basement or cellar
SECTION II, REPEALER. All ordinances and
parts of ordinances in conflict with the
provisions of this Ordinance are hereby
repealed.
SECTION III, SEVERABILITY. If any section,
provision or part of the Ordinance shall be
adjudged to be invalid or unconstitutional, such
adjudication shall not affect the validity of the
Ordinance as a whole or any section, provision
or part thereof not adjudged invalid or
unconstitutional,
SECTION IV. EFFECTIVE DATE. This
Ordinance shall be in effect after its final
passage, approval and publication, as provided
by law.
Passed and approved this
MAYOR
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ATTEST:
CITY CLERK
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NOTICE OF PUBLIC HEARING
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Notice is hereby given that a public hearing
will be held by the City Council of Iowa City,
Iowa, at 7:30 p.m. on the 1st day of March,
1994, in the Civic Center Council Chambers,
Iowa City, Iowa; at which hearing the Council
will consider the following item:
An ordinance rescinding the vacation of the
southern 97 feet of the north-south alley in
810ck 102, bounded by Clinton, Burlington,
Dubuque and Court streets.
An ordinance amending the Zoning Ordinance
to revise Section 36-20.5, Central Business
Support, CB-5, zone requirements.
A copy of the proposed resolution is on file
for public examination in the office of the City
Clerk, Civic Center, Iowa City, Iowa, Persons
wishing to make their views known for Council
consideration are encouraged to appear at the
above-mentioned time and place.
MARIAN K. KARR, CITY CLERK
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City of Iowa City
MEMORANDUM
Date: February 17, 1994
To: Planning & Zoning Commission
From: Robert Miklo, Associate Planner
Re: Proposed Amendments to the Central Business Support Zone (CB-5)
I n March of 1992 the City adopted the new CB-5 zone. This zone is generally located between
Burlington and Court streets west of Gilbert Street and east of the mid-block between Clinton and
Capitol streets. It was enacted to encourage the implementation of the Near Southside Development
Plan. As proposals are submitted for development within this zone, refinements of the ordinance to
accomplish development as envisioned in the Plan are needed, Proposed amendments address the
ten-foot setback from Burlington Street, the maximum height allowed, and floor area ratio, Each of
the proposed amendments is shown in bold print on the attached CB.5 section from the Zoning
Ordinance.
When the CB-5 ordinance was reviewed by the City Council, the Council requested that a ten-foot
setback be required for the first story along Burlington Street. This will allow more space for
pedestrian movement, and the placement of amenities within and adjacent to the right-of.way to
provide a buffer between vehicular traffic and pedestrians along Burlington Street. Above the first
floor, buildings can be built out or cantilevered to the property line. Staff proposes that this section
of the ordinance be amended to make it clear that support columns for upper floors can be located
within the ten-foot setback area.
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When it was drafted, a maximum height of 65 feet was proposed and approved for the CB-5 zone,
This height limit was based on the height of the Capitol House Apartments. As is the case with the
Capitol House Apartments, six floors of residential development can be achieved within a 65.foot high
building. H9wever, because commercial development, in particular retail developments, generally
require a greater floor-to-ceiling height when compared to residential uses, it is not possible to build
a five.story building within the current 65-foot height limit. For this reason, staff recommends that the
height limit for the CB.5 zone be amended to allow a maximum height of 75 feet.
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The intent of the CB-5 zone is to allow at a minimum a three.story building covering an entire site, or
a floor area ratio of three. With the use of bonus points, the floor area ratio can be increased to five,
or as envisioned, up to a five-story building covering an entire site. However, the definition of floor
area ratio contained within the Zoning Ordinance Includes basement or cellar areas when used for
principal or accessory use, Thus, as drafted, the current CB-5 zoning only allows between a two- and
four-story building covering an entire site.
To implement the Intent of the CB.5 zone, staff proposes that the Zoning Ordinance be amended to
clarify that the base floor area ratio above-grade equals three, and that the base floor area ratio
including basements or cellars equals four. The floor area ratio allowed with bonuses would equal five
above-grade, and six when basements or cellars are included. Staff believes that these amendments
would clarify the current CB.5 zone and would be In keeping w'th the original intent of the zone and
the Near Southside Redevelopment Plan.
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Attachment
Approved by:
K in Franklin, Director
D pt. of Planning &
Community Development
bj\cd'5zone
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Sec. 36-20.5. Central Business Support zone (CB-5).
(Ord. #92-3519, 3/17/92)
(a) Intent. The Central Business Support zone ICB-5) is intended to allow for the orderly
expansion of the central business district of Iowa City, to serve as a transition between
the intense land uses located in the central business district and adjoining areas, and
to enhance the pedestrian orientation of the central area of the city, This zone is
intended to accommodate mixed land uses and requires that the intensity of use be
less than that permitted in the CB-10 zone. Because of the mixture of land uses
permitted in this zone, special consideration of building and site design is required. To
control traffic and provide for the most efficient use of land and parking facilities,
special consideration of the amount and location of parking areas is also required. To
encourage developments which contain features which provide a public benefit, a
bonus in floor area ratio or dwelling unit density may be granted in this zone.
(b) Permitted uses.
(1) Permitted uses of the CB-1 0 Zone,
(2) Hotels, motels and convention facilities.
(3) Child care facilities.
(c)
Provisional uses.
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(1) Dwellings located above the street level floor of a structure that otherwise
complies with the requirements of this section. A maximum of three (3)
roomers may reside in each dwelling unit.
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(2) Elderly housing subject to the requirements of Sec. 36-55,
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(d) Soecial exceotions.
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(1) Clubs.
(2) Commercial recreational uses.
(3) Public utilities.
(4) Religious institutions.
(5) Schools. specialized private instruction.
(6) Transient housing.
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Dimensional reauirements.
(1) Minimum lot area: None
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(2) Minimum lot width: None
(3) Minimum lot frontage: None
(41 Minimum yards:
Side -
Rear -
None except the first story of buildings which abut Burlington
Street shall be set back 10 feet from the right-of-way line,
Building columns supporting upper stories may be located within
this ten-foot setback provided that an adequate pedestrian
passageway is maintained.
None
None
Front -
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(5) Maximum front yard 12 ft.
(61 Minimum building height: ~ 35 ft.
(7) Maximum building bulk:
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Height -
Lot coverage -
Floor area ratio:
Permitted base -
e.&-f.h. 75ft.
None
3.0 above grade
4.0 including basement or cellar
Maximum with approved 5.0 above grade (see Sec. 36-20.5(i))
bonuses 6.0 including basement or cellar
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(f)
General provisions. All principal and accessory uses permitted within this zone are
subject to the requirements of Articles III and IV, the divisions and sections of which
are indicated as follows:
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(11 Accessory uses and requirements, See Article III.
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a, Permitted accessory uses and buildings, See See, 36-56.
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b.
Accessory use and building regulations. See Sec. 36-57.
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c.
Off-street parking requirements: Residential uses shall provide parking
pursuant to Section 36-58. For uses other than residential, no parking
spaces are required in the CB-5 zone; if parking spaces are provided the
parking requirements contained in Section 36-58 are the maximum
number of spaces that may be provided per use. See Sec. 36-58.
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d.
Off-street loading requirements. See Sec. 36-59.
e.
Sign regulations. See Sec. 36-60.
f.
Fence regulations. See Sec. 36-64.
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(2) General provisions. See Article IV.
a. Dimensional requirements. See Division 1,
b. Tree regulations. See Division 2.
c. Performance standards. See Division 3.
d. Non-conformities. See Division 4.
Special provisions.
(1) Religious institutions which existed on August 7/ 1962/ may expand without
compliance with the off-street parking requirements.
DesiQn Provisions.
The following design provisions are intended to: help ensure that this zone develops
as a compact urban area; integrate parking facilities into the design of developments;
provide a safe and attractive area for pedestrian traffic; enhance crime prevention by
increasing opportunities for surveillance of the street from the interiors of buildings;
restrict fortress-like facades at the street level; avoid a monotonous environment; and
ensure the economic development opportunities of the downtown area are enhanced
through excellence in design,
Prior to submitting a request for a building permit, the developer shall have a pre-
application conference with the Director of Planning and Community Development to
discuss the application of these provisions to the subject property. Prior to issuance
of a building permit a site plan and elevation drawings demonstrating compliance with
the following design guidelines shall be submitted to the City for approval by the
Director of Planning & Community Development. Alternative design solutions may be
approved if it is demonstrated that the alternative meets the intent of this section.
Decisions of the Director may be appealed to the City Council.
(1) Except as required per section 36-20.5(e)(4) and for doorways no setbacks
from the front lot line are required. However, no portion of the first story of a
building shall be set back greater than twelve (12) feet from the front lot line.
If a setback is provided it shall be used for pedestrian activities or landscaping.
A minimum 50 percent of the area within the setback shall be used for
landscaping and/or shall be paved with brick.
(2) Doorways adjacent to a right-of-way, shall be set back so that doors do not
swing into a right-of-way.
(3) Stairways and ramps shall not be located in a right-of-way.
(4) All utilities and meters shall be located on side or rear elevations of buildings
and shall be screened from public streets,
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(5) Dumpster and recycling bin locations shall be screened, shall not be visible from
public streets, and shall not be located in a right-of-way,
(6) Areas of blank walls on the street level frontage of a building shall be
minimized. At least 40 percent of the length of the street level frontage shall
be windows or doorways (not including garage entrances). At a minimum,
every 12 feet in length of wall shall be articulated by a window, doorway,
setback, artwork or change in building material.
(7) All parking spaces shall be located behind a building and screened from view
or within the exterior walls of a building.
(8) Driveways between a street and parking area shall be minimized in number and
width, and shall be designed to minimize hazards to pedestrians. It is preferable
to provide two one-way driveways rather than one two-way driveway.
(9) Where parking areas are provided on the street level they shall be subordinate
to a permitted use. With the exception of approved driveways and yards, a lot
shall contain a permitted use for a minimum of the first 30 feet of the lot depth
and a minimum of 20% of lot area,
(10) Loading/unloading facilities shall be located to the rear of a building and shall
have access from an alley.
(11) Access to individual dwelling units shall be from enclosed lobbies or corridors
except at grade level where exterior doorways shall be permitted.
(12) Stairways between residential floors shall be enclosed within the building.
(13) Bicycle parking facilities shall be located so as not to impede pedestrian or
vehicular traffic.
(14) The location and size of proposed signs shall be integrated into the design of
the overall development.
(15) The outer edge of a balcony shall be no closer than 5 feet from a side lot line.
Bonus Provisions. The intent of the following bonus provisions is to provide an
incentive for developments to further a public policy, to incorporate features which
provide a public benefit and to encourage excellence in architectural design. Additional
floor area in excess of that allowed by the permitted base floor area of 3.0 (Sec. 36-
20.5(e)(7)), or additional dwelling units in excess of the density otherwise achievable
under the provisions of this section, may be granted in accordance with the following
provisions:
(1) If the Director of Planning and Community Development determines that the
proposed public benefit is appropriate in design and in the location proposed,
a floor area bonus shall be granted as enumerated below. Decisions of the
Director may be appealed to the City Council.
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Public Benefit Feature
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(al Masonry finish or architec- .75 floor area ratio
tural metal (not including
metal siding) on all non-fen-
estrated areas of walls visi-
ble from a public street. For
purposes of this provision,
masonry shall be defined as
fired brick, stone, or similar
such material, not including
concrete blocks, and may
include stucco or like mate-
rial when used in combina-
tion with other masonry fin-
ish.
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(b)
The purchase of substantial
development rights from a
property designated as a
landmark by the Historic
Preservation Commission
and City Council.
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(c) The provision of a theater.
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Three (31 square feet of floor area for
everyone (1) square foot of develop-
ment area transferred. (The bonus for
this provision shall not be available until
Transfer of Development Rights (TDRl
and Landmarks Ordinances are adopt-
ed,)
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Five (5) square feet of floor area for
everyone (1) square foot of theater
area.
(d) The provision of funds for all .25 floor area ratio
street furniture, lighting and
landscaping improvements
along adjacent street right-
of-way in accordance with
the approved South of
Burlington streetscape plan.
(e)
Provision of pedestrian activ-
ity areas, such as sidewalk
cafes, adjacent to but not
within the public right-of-
way provided such areas do
not exceed a depth of
twelve (12) feet from the
front lot line,
Three (31 square feet of floor area for
everyone (11 square foot of pedestrian
activity area.
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(f)
Provision of usable open
space which is of size and at
a grade that allows at a
minimum passive recreation-
al uses and is accessible to
all residential occupants of a
building. Such space may
include yards, terraces and
rooftop gardens designed
and improved for outdoor
activities. Balconies serving
individual dwelling units shall
not be eligible for this bonus.
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Two (2) square feet of floor area for
everyone (1) square foot of usable
open space.
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(g)
The adaptive reuse of a his-
toric building listed as signifi-
cant in the Near Southside
Neighborhood Redevelop-
ment Plan.
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Up to (3) square feet of floor area for
every (1) square foot of floor area re-
used, The additional floor area may be
constructed on vacant portions of the
property which is being reused or on
abutting properties,
(2) Dwelling units which are committed to the City's assisted housing program, or
some other affordable housing program approved by the City, shall be exempt
from the minimum parking requirements (Sec. 36-58), provided that such units
do not exceed 30 percent of the total units contained within a building. The
portion of a building containing such units may be in excess of the base floor
area ratio of 3.0.
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NOTICE OF PUBLIC HEARING
Notice is hereby given that a public hearing
will be held by the City Council of Iowa City,
Iowa, at 7:30 p.m. on the 1st day of March,
1994, in the Civic Center Council Chambers,
Iowa City, Iowa; at which hearing the Council
will consider the following item:
An ordinance rescinding the vacation of the
southern 97 feet of the north-south alley in
Block 102, bounded by Clinton, Burlington,
Dubuque and Court streets.
An ordinance amending the Zoning Ordinance
to revise Section 36-20.5, Central' Business
Support, CB.5, zone requirements.
A copy of the proposed resolution is on file
for public examination in the office of the City
Clerk, Civic Center, Iowa City, Iowa. Persons
wishing to make their views known for Council
consideration are encouraged to appear at the
above-mentioned time and place.
MARIAN K, KARR, CITY CLERK
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ORDINANCE NO.
AN ORDINANCE REPEALING ORDINANCE NO.
75-2772 VACATING THE SOUTHERN 97 FEET
OF THE NORTH-SOUTH ALLEY IN BLOCK 102
OF THE ORIGINAL TOWN OF IOWA CITY
BOUNDED BY CLINTON, BURLINGTON,
DUBUQUE AND COURT STREETS
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WHEREAS, the City Council adopted
Ordinance No. 75-2772 vacating the southern
97 feet of the north-south alley in Block 102 of
the Original Town of Iowa City; and
WHEREAS, The City of Iowa City did not
dispose of the vacated portion of the alley; and
WHEREAS, that portion of the alley
continues to function as means of public
access.
NOW, THEREFORE, BE IT RESOLVED 8Y THE
CITY COUNCIL OF IOWA CITY, IOWA, THAT:
SECTION'1. VACATION. The City of Iowa
City hereby repeals Ordinance No. 75-2772
which vacated the portion of the alley in Block
102 bounded by Clinton, Burlington, Dubuque
and Court streets legally described as follows:
The southern 97 feet of the north-south
alley in Block 102 of the Originel town of
Iowa City bounded by Clinton, Burlington,
Dubuque and Court Streets.
SECTION II, REPEALER. All ordinances and
parts of ordinances in conflict with the
provisions of this Ordinance are hereby
repealed.
SECTION III. SEVERABILITY. If any section,
provision or part of the Ordinance shall be
adjudged to be invalid or unconstitutional, such
adjudication shall not affect the validity of the
Ordinance as a whole or any section, provision
or part thereof not adjudged invalid or
unconstitutional.
SECTION IV. EFFECTIVE DATE, This
Ordinance shall be in effect after its final
passage, approval and publication, as provided
by law,
Passed and approved this
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CITY CLERK
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STAFF REPORT
To: Planning and Zoning Commission
Prepared by: Charles Denney
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Date: February 3, 1994
Item: VAC94-0002, Rescinding the vacation
of an alley in Block 102, north of Court
Street, west of Dubuque Street
GENERAL INFORMATION:
Applicant:
City of Iowa City
410 E. Washington Street
Iowa City, IA 52240
Requested action:
Rescinding the vacation of an alley.
Purpose:
To provide access for properties in the
southern half of Block 102.
Location:
Southern 97 feet of the 20 foot wide,
north-south alley located in Block 102,
bounded by Clinton, Burlington,
Dubuque, and Court streets.
Size:
1940 square feet.
Existing land use and zoning:
Alley, CB-5
Surrounding land use and zoning:
North - Commercial; CB-5
East - Commercial; CB-5
South - Post Office; P
West - Commercial; CB-5
Comprehensive Plan:
General Commercial
File date:
January 19, 1994
BACKGROUND INFORMATION:
The southern 97 feet of the north-south alley in Block 102 bounded by Clinton, Burlington,
Dubuque and Court streets were vacated by Ordinance No. 75-2772, on June 24, 1975. This
alley and three others were vacated for projects related to urban renewal. The City did not
dispose of the 97 feet of alley in Block 102, and the alley has continued to function as a
public right-of-way.
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ANALYSIS:
As part of a plan to redevelop the northern portion of this block, Hieronymi Partnership has
requested that the northern 212 feet of the alley be vacated. Staff's review of this request
recommended that the vacation of the southern 97 feet of the alley should be rescinded so
that access options would be maintained for properties adjacent to the alley, As was
previously mentioned, the City has not disposed of the alley property, and the area functions
as a public alley currently.
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If the vacation of the northern portion of the alley is approved, MidAmerica Savings Bank
would lose the ability to leqallv access a public street from the alley, and the bank would have
to reconfigure its drive-through facilities and on-site parking. Also, reopening the alley would
provide access alternatives for the property where the Rebel Plaza is presently located should
the owners decide to redevelop this property.
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STAFF RECOMMENDATION:
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Staff recommends that the vacation of the southern 97 feet of the north-south alley in Block
102 of the Original Town of Iowa City bounded by Clinton, Burlington, Dubuque and Court
streets be rescinded.
ATTACHMENTS:
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1. Location Map,
2. Ordinance vacating the alley.
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Approved by:
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Department of Planning and
Community Development
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ORDINANCE NO. 75-2772
AN ORDINANCE VACATING ALLEYS RELATIVE TO R-lIl URBAN RENEWAL PROJECT
BE IT ORDAINED BY THE CITY COUNCIL OF IOWA CITY, IOWA:
Section 1. That the alleys in Iowa City, Iowa, hereinafter
described be and the same is hereby vacated:
1) The east-west alley in Block 84 of the Original Town
of Io\~a City bounded by Capitol, Ihshlngton, Cllnton
and College Streets; ,
2) The North 310' of the north-south alley in Block 101 of
the Original Town of Iowa City hounded by CapHol,
Burlington, Clinton and Court Streets: ,
3) The east 40 feet of the east-tlest alley in Block 82
of the Original Town of Iowa City bounded by Clinton,
College, Dubuque and Bur1ingtan Streets; and
/1) The south 97 feet of the north-south alley i.n Block
102 of the Original Town of Iowa City bounded by
Clinton, Burlington, Dubuque and Court Streets.
Section 2. This Ordinance shall be in full force and effect
\~han published by law.
It \~as r.lOved by Davidsen and seconded by Nellhaus~r
that the Ordinance be adopted, and upon roll call there ,were:
AYES: NAYS: ABSENT:
x Brandt
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x deProsse
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Neuhauser
Passed and approved this 24th
day of . June
1915.
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Second Reading-" i I 71 7)'
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NOTICE OF PUBLIC HEARING
BUDGET ESTIMATE
DOO
Fiscal Year July 1, 1994 . June 30, 1995
City of Iowa City, Iowa
The City Council will conduct a public hearing on the proposed 1994.1995 Budget at the Civic Center in the Council
Chambers on March 1, 1994, at 7:30 p.m. The Budget Estimate Summary of proposed receipts and expenditures
is shown below, Copies of the detailed proposed 1994.1995 8udget may be obtained or viewed at the Civic Center
Administrative and City Clerk offices and at the Iowa City Public Library.
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The estimatild total tax levy rate per $1000 valuation on regular property is ........,....... $12,95333
The estimated tax levy rate per $1000 valuation on agricultural land is . . . . . . . . . . . . . , . . . . . , $ 3.00375
At the public hearing, any resident or taxpayer may present objections to, or arguments in favor of, any part of the
proposed budget.
Property Tax Limits to be Exceeded
,
Senate File 2393. passed by the 1992 General Assembly, places certain limitations on property taxes for cities.
The limitations allow growth in property taxes for certain types of increases in valuation, An increase in taxes by
the amount of the percent change in the price index for state and local government purchases requires the city
budget to be published twice and the City Council to hold two public hearings. Senate File 2393 does not remove
any of the rights of the taxpayer in regards to budget review or appeal. Debt Service levies and Voted levies are
exempted from the limitations.
This is hearing 1 of 2.
~ /1 ,1994 /s/ 1lt~ ..)/. ~ City Clerk
BUDGET RE.ESTlMA TED ACTUAL
FY 1994.95 FY 1993.94 FY 1992,93
REVENUES & OTHER FINANCING SOURCES
Taxes Levied on Properties 1 18,483.722 17,187,055 16,777,682
Less: Uncollected Property Taxes,Levy Year 2
.Net Current Property Taxes 3 18,483,722 17.187,055 16.777,682
Delinquent Property Taxes 4
TIF Revenues 5
Other City Taxes 6 400,000 447.800 306,199
Licenses & Permits 7 514.005 392.230 473.948
Use of Money & Property 8 1.337,060 1,127,388 1,778,031
Intergovernmental 9 17,418,759 12,047,095 11,618,313
Charges for Services 10 21,740,421 18,718,896 17,809.396
Special Assessments 11 0 46,150 46.871
Miscellaneous 12 2,114.610 2,079.662 2,767,895
Other Financing Sources 13 42,770,8B7 24.571.B92 26,528,852
TOTAL REVENUES & OTHER SOURCES 14 104.779,464 76.618.168 78,107,187
EXPENDITURES & OTHER FINANCING USES
Community Protection Ipolice, lire, street lighting, elc,l 15 9.687,683 9.306.985 8.755,275
Human Development Ihealth, Iibrery, recreation, etc,1 16 6,492,278 6,591,126 5.693,518
Home & Community Environment Igarbage, streets, utilities, elc.l 17 61.170,380 37,551,295 32,678,422
Policy & Administration Imayor, council. clerk. legal, etc,1 18 4,702,301 5,613,812 6.004,228
TOTAL EXPENDITURES 19 82,052,642 59,063,218 53,131,443
Less:
Debt Service 20 9,774,957 7,710,537
Capital Projects 21 25,093,194 10,268,464
Net Operating Expenditures 22 47,184,491 41,084,217
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Chambers on March 1, ,a:
is shown below. Copies of the detailed proposed 1994-1995 Budget may be obtained or viewed at the Civic Center
Administrative and City Clerk offices and at the Iowa City Public Library.
The estimat,ed total tax levy rate per $1000 valuation on regular property is ........,.,..,., $12.95333
The estimated tax levy rate per $1000 valuation on agricultural land is ...... . . . . , . . ; . . , . . . $ 3,00375
At the public hearing, any resident or taxpayer may present objections to, or arguments in favor of, any part of the
proposed budget.
Property Tax Limits to be Exceeded
,
Senate File 2393, passed by the 1992 General Assembly, places certain limitations on property taxes for cities,
The limitations allow growth in property taxes for certain types of increases in valuation, An increase in taxes by
the amount of the percent change in the price index for state and local government purchases requires the city
budget to be published twice and the City Council to hold two public hearings. Senate File 2393 does not remove
any of the rights of the taxpayer in regards to budget review or appeal. Debt Service levies and Voted levies are
exempted from the limitations.
This is hearing 1 of 2.
f~ /') ,1994 /s/~..J -J!. ~ City Clerk
BUDGET RE,ESTIMA TED ACTUAL
FY 1994.95 FY 1993.94 FY 1992,93
REVENUES & OTHER F1rJANCING SOURCES
Taxes levied on Properties 1 lB.4B3.722 17,187.055 16.777.682
less: Uncollected Property Taxes.levy Year 2
.Net Current Property Taxes 3 18.483.722 17.1B7,055 16,777.682
Delinquent Properly Taxes 4
TIF Revenues 5
Other City Taxes 6 400,000 447,800 306.199
licenses & Permits 7 514,005 392,230 473.948 i
Use of Money & Property 8 1.337,060 1,127,388 1,778,031
10
Intergovernmental 9 17.418,759 12,047,095 11,618.313
Charges for Services 10 21,740.421 18,718.896 17,809,396
Special Assessments 11 0 46,150 46.871
Miscellaneous 12 2,114,610 2.079,662 2,767.895
Other Financing Sources 13 42,770,887 24.571.892 26,528,852
TOTAL REVENUES & OTHER SOURCES 14 104,779.464 76,618,168 78.107.187
EXPENDITURES & OTHER FINANCING USES
Community Protection (police, fire, slreellighling. etc.1 15 9.687,683 9,306,965 8,755.275
Human Development {health, library. recreation, etc,l 16 6,492,278 6,591,126 5.693.518
Home & Community Environment (garbage, streets, utilities, etc.l 17 61,170,380 37,551,295 32.678.422
Policy & Administration Imayor. council, clerk, legal, elc.l 18 4,702.301 5.613.812 6,004,228
TOTAL EXPENDITURES 19 82.052,642 59,063,218 53,131,443
less:
Debt Service 20 9.774,957 7.710,537 8,934,037
Capital Projects 21 25.093.194 10,268.464 7,172.415
Net Operating Expenditures 22 47,184.491 41,064,217 37,024,991
Transfers Out 23 20,091,370 25,593,638 19,661.408
TOTAL EXPENDITURES/TRANSFERS OUT 24 102.144.012 84,657,056 72,792,851
Excess of Revenue & Other Sources Over IUnderl ExpenditureslTransfers OUI 25 2,635.452 18,038,8881 5,314,336
BEGINNING FUND BALANCE JULY 1 26 29,702,110 37,740,998 32.426,662
ENDING FUND BALANCE JUNE 30 27 32,337,562 29,702,110 37,740,998
Reasons for the unusual and/or compelling need to request an increase in property taxes permitted by the amount
of change in the price Index: Continuation of SF2393 Property Tax restrictions in FY95. Need to minimize use of
cash reserves.
IlnodmlbudOOll,nph
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" NOTICE OF PUBLIC HEARING ON PLANS,
\' SPECIFICATIONS, FORM OF CONTRACT
"
" AND ESTIMATED COST FOR
. ~, RIVERSIDE DRIVE RIVER TRAIL PROJECT
..
t" IN THE CITY OF IOWA CITY, IOWA
" TO ALL TAXPAYERS OF THE CITY OF IOWA
" CITY, IOWA, AND TO OTHER INTERESTED "
( PERSONS:
''; Public notice is hereby given that the City
"' . '(i;
~"''- c Council of the City of Iowa City, Iowa, will con-
,~ duct a public hearing on plans, specifications,
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" . .r form of contract and estimated cost for the con-
I structlon of the Riverside Drive River Trail Project
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, in said City at 7:30 p.m, on the 1 st day of March,
,
1994, said meeting to be held in the Council
Chambers in the Civic Center in said City,
". Said plans, specifications, form of contract and
'-<:
..-.~. 'I estimated cost are now on file in the office of the
City Clerk in the Civic Center in Iowa City, Iowa,
.'! and may be inspected by any interested persons.
! Any Interested persons may appear at said
, i meeting of the City Council for the purpose of
I
, I making objections to and comments concerning
!
1 said plans, specifications, contract or the cost of
making said improvement.
This notice is given by order of the City Council
of the City of Iowa City, Iowa and as provided by
law.
MARIAN K. KARR, CITY CLERK
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NOTICE OF PUBLIC HEARING TO CONSIDER
APPROVAL OF A PROPOSED NEAR
SOUTHSIDE COMMERCIAL URBAN
REVITALIZATION PLAN FOR A PROPOSED
URBAN REVITALIZATION AREA IN THE CITY
OF IOWA CITY, IOWA.
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The City Council of the City of Iowa City,
Iowa, will hold a public hearing before itself at
its meeting which begins at 7:30 p.m. on
February 15, 1994, in the Council Chambers,
Civic Center, Iowa City, Iowa, to consider
adoption of a proposed Near Southside,
Commercial Urban Revitalization Plan (the
nplann) concerning a proposed Urban
Revitalization Area in Iowa City, Iowa, legally
described as:
All of Block 102, Block 103, Outlot 24,
and the easterly half of Block 101,'
Original Town, Iowa City, Iowa,
The adoption of this proposed Urban
Revitalization Plan and the subsequent
designation of this area as an Urban
Revitalization Area will permit property tax
exemptions on the value added to properties
qualified for improvements. A copy of the Plan
is on file for public Inspection In the office of
the City Clerk, Civic Center, Iowa City, Iowa.
Any person or organization desiring to be
heard shall be afforded an opportunity to be
heard at such hearing.
This notice is given by order of the City
Council of Iowa City, Iowa, as provided by
Section 404.2 of the State Code of Iowa.
MARIAN K, KARR, CITY CLERK
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City of Iowa City
MEMORANDUM
Date: February 24, 1994
To: City Council
From: Karin Franklin, Director, Planning & Community Develop
David Schoon, Economic Development Coordinator~ I '
Re: Near Southside Commercial Urban Revitalization Plan
At the Council's February 15, 1994 public hearing on the proposed Near Southside
Commercial Urban Revitalization Plan for the proposed Urban Revitalization Area, the
Council appeared to be unclear about the process and appeared unable to reach a
consensus regarding the amount of residential uses permitted in a project eligible for
property tax exemption. The purpose of this memo is to briefly address both of these
issues,
Regarding the process, Iowa Code Chapter 404 provides that, within thirty days after
the City Council holds the first public hearing, a second public hearing can be
requested by property owners or tenants within the proposed urban revitalization area.
Thus, the City Council cannot adopt the ordinance designating the Area or approve
the Plan for the Area until thirty days after the first public hearing. Given the
Council's meeting schedule, the earliest the Council could pass and adopt the
ordinance or approve the resolution would be April 12, 1994.
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The wording of the Plan is presently interpreted as defining qualified real estate as all
qualified real estate assessed as commercial property including commercial property
containing any amount of residential uses. At the February 15, 1994 public hearing,
the City Council indicated that it wished to limit the amount of residential uses located
in a qualified project. One of the primary objectives of the Plan is to encourage the
redevelopment of the Near Southside Urban Revitalization Area for commercial uses
other than commercial residential uses. Staff recommends that the Council limit the
amount of residential uses allowed in a building to twenty percent (20%) of the above
grade structure (Twenty percent was the figure often discussed by Council members
during the public hearing).
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Staff has also investigated the possibility of granting property tax exemption to only
that portion of the project used for non-residential commercial uses. After further
discussion with the City Assessor, staff has determined that property tax exemption
can be limited to a portion of a project. Wording to that effect is included in the
attached pages, (Note: The last sentence of the second paragraph of the section
"Types of Construction Eligible" has been amended to clarify the Historic Preservation
Review process. The underlined addition to this sentence is not substantive and does
not require a formal amendment to the Plan.)
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We will both be at your February 28, 1994 work session and March 1, 1994 Council
meetings.
cc: Marsha Bormann
Dan Hudson
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As amended
February 15, 1994
APPLICABILITY OF THE PLAN
land Uses
The Urban RO',fitalizatioR Plan is applicable to all ql:lalifieEl real estate assesse8 as
oommercial prcJl3crty, Clcoept eommcreiall3repcrty used fer residential uses,
The Urban Revitalization Plan is applicable to all qualified real estate assessed as
commercial property containing no residential uses and to all qualified real estate
assessed as commercial property in which no more than twenty (2.Q.%.l percent of the
above grade portion of the structure is used for residential uses. Onlv the non-
residential portion of a structure assessed as commercial property shall qualifv for
property tax exemption under this Plan.
Types of Construction Eligible
Eligible construction includes rehabilitation and additions to existing property
determined to be historic and/or architecturally significant by the Iowa City Historic
Preservation Commission and new construction for all other commercial property;
Cl(eept eommereial I3reperty used for residentiall3urpases defined as qualified real
estate bv this Plan. For purposes of this Plan, new construction refers to buildings
constructed after the date of adoption of this Plan and any subsequent additions to
those buildings. New construction that replaces structures identified in this Plan as
historic and/or architecturally significant is not eligible for property tax exemption
under this Plan.
All rehabilitation to historic or architecturally significant structures shall be done in
such a manner as to preserve or restore any historic structure to productive use in
order to be eligible, The guidelines for determining if rehabilitation does preserve or
restore the structure shall be those set forth in the 1990 revised addition of the
Secretary of Interior's Standards for Rehabilitation and Guidelines for Rehabilitating
Historic Buildings. All additions to historically or architecturally significant structures
shall be developed in such a manner as to be architecturally compatible with existing
development. Plans and specifications for proposed exterior renovation must be
submitted to the Iowa City Historic Preservation Commission for review and approval
prior to construction in order for the improvements to qualifv for property tax
exemption under this Plan.
All rehabilitation, additions, and new construction must meet the applicable design
criteria outlined in the Central Business District Support Zone. These design criteria
are administered administratively by the Director of Planning and Community
Development. In addition, plans and specifications for the exteriors of new
construction must be submitted to the Iowa City Design Review Committee for review
and recommendation. The Design Review Committee recommendation will be
submitted to the Iowa City City Council for review and approval. The City Council
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February 15, 1994
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must approve the exterior design prior to construction in order for the improvements
to qualify for property tax exemption under this Plan,
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Time Frame
The Near Southside Commercial Urban Revitalization Area shall remain a designated
revitalization area for ten years from the date of designation.
Revenue Bonds
The City has no plans to issue revenue bonds for revitalization projects within the
area.
QUALIFICATIONS FOR ELIGIBILITY
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Qualified property improvements, as used in this plan, include rehabilitation and
additions to existing historic and architecturally significant structures or new
construction for all other property assessed as commercial property, e)(Qopt
commercial prol3crty usee:! for rcsie:!cntial purl30ses defined as qualified real estate b,J:
this Plan, Qualified property improvements do not include new construction that
replaces structures identified in this Plan as historic and/or architecturally significantly.
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All improvements, in order to be considered eligible, must be completed in
conformance with all applicable regulations of the City of Iowa City and must increase
the actual value of the property as of the first year for which an exemption is received
by at least fifteen (151 percent in the case of real property assessed as commercial
property. (Actual value added by improvements as used in this plan, means the actual
value added as of the first year for which the exemption was received.)
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City of Iowa City
MEMORANDUM
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Date:
February 24, 1994
To:
Mayor Horowitz and the City Council
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From:
Clara Swan, Chairperson,
Design Review Committee
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Re:
, Design Review Criteria for the Near Southside Commercial Urban Revitalization
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At its February 22, 1994, meeting, City staff updated the Design Review Committee regarding the
design review aspects of the Near Southside Commercial Urban Revitalization Plan. The,
Committee understands that the Council is presently discussing the Plan and has yet to adopt
it. If the Council determines that the establishment of this Plan is in the best interest of the City,
the Design Review Committee endorses the design review component of the Plan.
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The Committee looks forward to working with the City Council in reviewing the design of eligible
new construction as outlined in the proposed Plan, The Committee is committed to working with
the Council and developers in the area to ensure a review process that is thorough and occurs
in a timely fashion. Special meetings can be held in order not to cause delay in developers'
schedules. Committee members eagerly await the chance to be of benefit to projects in the Area.
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HIE RON Y M I PAR T N E R S
suite Eight, 328 South Clinton street
P. O. Box 288, Iowa City, Iowa 52244
February 24, 1994
To: The Mayor and Members of the city council, Iowa city, IA
subject: The Near Southside Commercial Urban Revitalization
Plan
This letter is being written after reviewing the city
council proceedings on February 15, 1994. For the most part
this is additional information which may help you to better
understand the comments we made in our letter of February 3,
1994 on the economics of the project. It is also our
impression that confusion still remains about the nature of
tax abatement. Tax abatement means a reduction in taxes. The
purpose of offering it in the Revitalization Plan is to
encourage development deemed advantageous to the public. When
applied to the Hieronymus Square Project, it means primarily a
reduction in rent or operating expenses paid by the tenants.
Abatement is not a subsidy. There will be no payment of
public money to Hieronymus Square or to its tenants.
A. The speculative nature of the Hieronymus Square
project makes it difficult to determine the point at which it
will become financially viable. The project must achieve rent
levels high enough to cover the debt service and pay the costs
of operating the building in the shortest period of time
possible. until that level is reached, which we call the
break-even point, substantial losses will continue to be
incurred and will have to be covered by the use of other
assets of the developer
B. The retail and office leases provide for the payment
each month of a fixed sum as the base or minimum rent. The
base rents collected must produce sufficient cash to pay the
monthly payment of principal and interest on the mortgage.
The base rent is also the only source of cash flow available
to the owner for the payment of certain other expenses which
will be explained in Paragraph D below. The base rent is
commonly stated in the lease as a dollar amount per square
foot of rented floor area. For example: If the floor area
being leased (called the Adjusted Gross Leasable Area) is 2000
square feet and the Dollar per square foot rate for that space
s $10.00, the annual base rent would be $20,000. The fixed
monthly payment on that amount would be $1,666.67.
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C. The leases also provide for the payment each month by
the tenants, as additional rent, a non-fixed amount to cover
the tenants share of the operating expenses, including real
property taxes, insurance, advertising, electricity, water and
sewer charges, rubbish removal, depreciation on the heating,
ventilating and air conditioning system, and common area
expenses. The common area expenses are the expenses on that
portion of the building not rented to tenants, but used in
common by all of the tenants and their customers or clients.
The common area includes the exterior of the building, the
roof, entrances, atriums, hallways, restrooms, and parking
areas. The common area expenses include building maintenance,
repairs and cleaning; heating, ventilating and air
conditioning maintenance and repairs; gas and electricity,
administrative costs, professional fees and security. If the
adjusted gross leasable area (AGLA) of the building is 100%
leased, then each tenant pays its pro-rata share of all of the
building expenses. In other words, if the building is 100%
occupied the tenants pay 100% of the expense. When the
building is not fully occupied, the tenants' share is reduced
by the percent of space that remains vacant and the owner must
pay that portion of the expenses. For example: If the
building has as an AGLA of 100,000 square feet of which 80,000
is leased, a tenant renting 1,000 square feet would pay its
pro-rata share of one percent of eighty percent of the
expenses. The twenty percent of the operating expenses
payable by the owner is paid from the cash flow produced by
the base rent discussed in Paragraph B above, or from the
owners's pocket if the cash flow is insufficient. Additional
rent is billed to the tenants each month and is due at the
same time as the monthly base rent. When the building is
initially occupied, the calculation of each tenant's share is
based on a budgeted amount, then after that on the actual
costs for each past year adjusted for the changes expected for
the coming year. The additional rent accounts are audited at
year end and refunds or additional billings made accordingly.
Even though these payments are called additional rent, all of
this money must go to pay the specified expenses of the
project.
D. The key to financing the project is the speed at which
the space can be leased. The lender will require a minimum
level of signed leases before allowing any of the borrowed
money to be spent. It is customary for all of the owner's cash
equity to be paid out before any of the borrowed funds are
used. If the leasing of the space does not proceed in a
timely fashion to reach the break-even point, then the owner
must be prepared to cover the operating losses from other
funds. A successful leasing program for this project must
deal with the following factors:
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(1) The total base and additional rent paid each month
must be competitive with the rental rates charged on existing
space in other downtown locations. Because of the relatively
steady rate of inflation of building costs over many years,
Hieronymus Square will cost more per square foot to build than
any other commercial building in downtown Iowa city. The
first class retail and office space we intend to build may
well be worth a higher rental rate, but we do not know if it
can command more than the market rate. Assuming as we do,
that the project will achieve rents at the high end of the
current market, the project will still incur substantial
losses during the first three years of operation after the
completion of the building.
(2) The break-even point must be reached by the time the
percentage of AGLA under lease is no higher than between
eighty and ninety percent. Lenders require that the owner
make a permanent allowance for a vacancy rate of five to eight
percent. The closer the projected break-even point comes to
ninety percent, the chances of getting a loan approved are
sharply diminished.
(3) A break-even point at between sixty and seventy
percent of AGLA leased is generally considered to be desirable
by lenders. To attempt to achieve that result would require
asking for more than market rents. It is likely that this
approach would extend the leasing period and increase the
owner's initial losses substantially.
(4) with the base rent at market rent the building
should lease up faster but at a higher percentage of occupancy
and with lower margin of cash flow available to meet the
project obligations.
In view of these conflicting economic factors, we plan to
set the rents at the high end of the market rent level which
should produce a positive cash flow within three to four years
of operation with an occupancy rate of not more than eighty to
ninety percent.
E. The savings resulting from tax abatement have a direct
effect on the rent paid by the tenants. The tenants do not
generally differentiate between the base rent and the
additional rent. Their rent is paid with one check each
month. with tax abatement those checks will be for smaller
amounts for ten years. For example: Assume a 3000 square
foot store rents at an annual base rent of $17.00 per square
foot and with annual additional rent estimated at $7.15 per
square foot without tax abatement. The total square foot rent
of $24.15 multiplied by 3000 produces a total annual rent of
$72,450. with the reduction in additional rent coming from
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tax abatement, the total annual rent would range from a low of
$61.800 after the first year to a high of $70,440 at the tenth
year.
As you can see from the above explanations tax abatement
is essential to making this a viable project. without tax
abatement the rents would have to be too high and the banks
are saying the risks are too great. We are confident that
with tax abatement the Hieronymus Square project will
ultimately be successful. This building will lead the way as
the standard for others to follow. The good things for Iowa
city that will result have been listed in our letter of
February 3rd and in city Staff Memorandums. Some of these
are:
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Substantially increase the real property tax base and
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Increase the density of the use of downtown property.
Create more jobs downtown and in Iowa City generally.
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Encourage others to attempt new development downtown.
Bring new businesses to the downtown and to Iowa city.
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3722 Hummingbird Lane SE
Iowa City IA 52240
February 24, 1994
Members of the City Council
City ofIowa City
Dear Councilors:
I would like to raise some questions that to my knowledge have not been adequately
addressed during the recent discussions about the desirability of providing property tax abatements
for the Hieronymous Square project. Many of these questions are relevant as well to the more
general issue of city policy regarding incentives for economic development, which I understand the
city council will be discussing in the near future. My purpose is not to oppose or to support the tax
abatement currently under consideration; instead I wish to raise some questions that I think should be
an important part of any debate about the use of city resources to promote development. My
thoughts on these issues come out of my reading and teaching in the areas of state and local
government finance and economic development financing, I am an economist and an Associate
Professor in the Graduate Program in Urban and Regional Planning Program at the University of
Iowa. I have lived in this area since 1977 and have a long-standing interest in the development of the
city,
Question 1: Is there any reason to believe that locallant/markets and financial markets are not
working as they shoultl?
When considering proposals for incentives to stimulate commercial or residential
development, the council may hear arguments that the project would not be economically viable
without the incentives, Let us suppose that persuasive evidence is presented in support of this
argument; private lenders, in particular, are unwilling to provide financing for the project. It
behooves the council, then, to determine exactly why the project has been judged not viable by
financial markets. Obviously, bankers and other investors finance many residential, commercial, or
industrial projects over the course of a year, projects that can earn a reasonable return for the
investors even while paying their full freight in property taxes, If investors are indeed unwilling to put
their funds into a project, it must be because the numbers don't work-the rents would have to be
above the market level, the vacancy rate would be too high, or it would take too long for the market
to absorb all of the space. Unless the council believes that they are more informed regarding Iowa
City rental and land markets than the investors who would have a financial stake in the project,
council debate should proceed on the assumption that the city is being asked to support a project that
does not meet the market test of viability that other projects must meet.
Questioll2: Is it ill the dty's interest to prall/ate 1I01l-viable projects?
At any point in time, there are no doubt many projects that could be proposed-residential
subdivisions, speculative warehouses, shopping malls-that could not get private financing, but that
would be viable (profitable) ifless of the project income had to be paid in property taxes. We
obviously can't and wouldn't want to promote all such projects by offering tax incentives, What is it
about the particular project under consideration, then, that warrants city subsidy? Why do we want
to promote projects that the market has rejected?
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In my public policy classes, I tell my students that public subsidy of private development may
be justified when there is some clear public benefit, and that a true public benefit is something
outside the market process, something over and above what is taken into account in financial
analyses of projects. When students suggest that the public benefit might consist of the public's
demand or desire for more retail or office space, or more housing, I point out that these kinds of
demands are adequately represented in the market place. They are not additional public benefits, If
population growth has increased the demand for housing, then the financial feasibility analyses of
apartment projects will reflect that increased demand and the market will respond by building more
apartments, If projected population and income growth will allow the Iowa City market to support
more retail floor space, this will be reflected in positive evaluations of the feasibility of retail projects,
If we started counting the market demands of households or businesses as public benefits justifying
public subsidy, we would have to subsidize every development project ever proposed.
If public support (iil the form of tax incentives or other subsidies) is justified, then, it must be
because there is some public benefit that is not accounted for in the process of market valuation, but
that is worth paying for. Let me give some examples. Suppose that the city asked the developer to
include some project features or design changes that would add to project cost but not to project
revenues; as a result, they would render the project infeasible. If these features are for the benefit of
the general public (better design, more landscaping, public spaces) then we ought to be willing to pay
for them, In this case, the tax incentives are necessary because public requirements make the project
non-viable, not because the use itself is not viable by market standards. We should be asking: What is
the public non-market benefit that we are going to get from this project, what is the quid pro quo,
and is the benefit at least equal in value to the tax abatement? ~ ()
Probably the best example of this approach comes from existing Iowa City policy with ',d.':
respect to housing development. The city has decided that it is in the public interest to provide more'
affordable housing, It often is not in the developers' interest to do so; subdivisions without low-cost
housing would be more profitable. So when the city imposes or negotiates requirements for inclusion
oflow-cost housing, it provides some compensation to the developer, by paying a larger share of
infrastructure costs, for example. The public benefit and the quid pro quo is clearly defined,
If clear public benefits or quid pro quos are not present for a particular project, are there
other possible rationales for subsidy? I can think of only two possibilities, and both warrant close
scrutiny,
Questioll 3: Is it city policy to subsidize rellts?
Public subsidy of otherwise non-viable commercial or residential development projects might
be justified if it is city policy to promote below-market rents, If a development project is not justified
by current market conditions, then it is probably the case that the market cannot absorb the space
quickly enough to provide the income that would cover costs. Under those market conditions, a
significant increase in office or retail space or apartment units will create a surplus of space, In such a
buyers market, rents will be lower throughout the CBD or, perhaps even the city, than they would
have been otherwise, as the new space competes with the old, In the case of the Hieronymous
Square project, the developer has clearly stated that the tax incentive will be passed on to tenants.
The public subsidy in this case would be justified, then, if the city adopts as a public policy the goal
of providing rental space at below-market prices to downtown retailers and office uses. This would
be a commercial rental subsidy program, albeit an indirect one. The public interest in such a program
should be spelled out, as it has in other areas of city policy such as the desire to assist low and
moderate income households find affordable housing,
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Question 4: How do we know wltetlter tlte city will gain or lose property tax revenues?
An alternative justification for tax abatements is often put forth: that it is good policy because
the city will be a net gainer in property tax revenue. This conclusion is based on a comparison of the
taxes that will be paid (after abatements) by the new project with the taxes currently being paid on
the property. This is the wrong comparison, and can be very misleading, Whether the city will gain
revenue depends entirely on what kind and amount of development would occur in the future, on the
parcel in question and elsewhere in the city, in the absence of the tax incentive. If the demand exists
for additional commercial space, then it is wise to assume that some developers, somewhere,
sometime, will come up with projects to satisfy that demand, projects that will pass muster at the
local bank without benefit of tax abatement. So if this particular project is not built, something else
will be, something that will be paying property taxes, In may not be on that parcel, and it may not
even be in the CBD. But when demand justifies it, developers will propose projects to satisfy the
demand, and bankers will provide financing.
The argument that the city will gain revenue is based on the assumption that if the project in
question is not built now, no other projects will arise to take its place in the foreseeable future, If this
is an accurate assumption, then the project in question is a truly bad investment. Not only is the
market not ready for that amount of space now, but it won't be for the foreseeable future. This
brings us back to the earlier question: Why is it in the public interest to bring into being unwise
projects?
Question 5: Are tltere otlter more viable uses of tlte land in question?
The developer in this case has stated quite plainly that the project being proposed would not
be viable, even with the tax incentives, if it had to cover the costs of all of the land at today's prices.
Let us take that argument at face value, If that land has such a high market value, it can only be
because there exists some potential use of that land that can justify that value. Market value does not
come from thin air; it is a residual that comes out of the calculation of the income stream and the
costs of alternative uses of the land. The use with the highest residual-the use that could afford to
pay the highest price for the land and still be profitable-is the "highest and best use." Market
value-to the economist, the tax assessor, and the bank's appraiser alike-means the value of a site
in highest and best use. Therefore, if the proposed project could not justify paying the market value
of the land, the proposed use is not the highest and best use. It follows that, if the project in question
is not undertaken, then some other use that would be more valuable, and would produce at least as
much tax revenue, would be viable on that parcel.
Conclusions
The provision of tax incentives for a project that cannot pass market tests of viability may be
a wise policy under two conditions: (I) if the tax incentives are balanced by a true public benefit, or
the city negotiates a quid pro quo (that is costly to the developer) in the design of the project, or (2)
if the council decides that it is city policy to subsidize rents for the kinds of property being propo~ed,
at the expense of taxpayers in general. In the case of commercial or residential projects, it is very
difficult to support an argument that the city will be a net gainer in property tax revenues.
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94FEB 28 AH II: 46
CITY CLERr;
JOY/A CITY, IOWA
SUITE 200
IOWA CITY. IOWA 52240
319-351.8698
February 28, 1994
Council Member
Iowa City City Council
Iowa City, IA 52240
RE: Heironymus Tax Abatement
Dear Council Member,
The intent of this letter is to point out some reasons not to agree upon the
tax abatement request of $1,300,000 to a potential developer in the area
south of the CBD. Ironically, this objection comes from the present owners
of the first Iowa City Urban Renewal project many years ago. We were on
board from the start of Plaza Centre One and were very instrumental in
making that project feasible without tax abatement. The primary developer
was/is the same for both projects. While we support the continued
development of downtown Iowa City, we ask you to deny the large request
of tax abatement.
The opposed position is taken for several reasons:
During the past few years Iowa City has nurtured into existence many
office buildings in outlying locations, This has assisted in the
lessening of office space viability in the downtown area. The rents in
these facilities can be considerably less than those in the CBD.
Iowa City tax assessments have increased dramatically on downtown
properties in the past few years. This, too, has raised the cost of
renting space to a higher figure compared to other rentals, further
disstressing the downtown location option.
From media coverage, the square foot rent the developer wants to be
able to charge (with the aid of tax abatement) is less than the rents in
comparable buildings. $10/sf is less than peOne can ask.
There is office space for lease in the downtown area - not as
erroneously reported by the developer. In fact, there are 6000sf
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available in PCOne today. Only one time in the existence of Plaza
Centre One has it been fully rented; the late eighties.
At the present, PCOne pays $135,000 in taxes each year (it will be
much more next year); about the same figure that you are considering
gifting to the developer. All the taxes PCOne pays would be removed
from the City, District, County coffers. and awarded to competition.
And please remember, Iowa City government has not done well when
it has tweaked private enterprise in the recent past. An earlier Iowa
City Council eagerly "invested" in a $10,000,000 hotel backed by a
millionaire. That millionaire became bankrupt and it cost local
taxpayers millions of dollars. It was an embarrassing, costly event.
If this development before you does not meet muster, does not pass
the test of feasibility why do you want to invest in it? You would be
putting taxpayer dollars at risk once more. What would the result be
this time? Are you willing to personally invest in this endeavor?; in
essence you are risk investing citizen's dollars.
If the project is feasible, a quick study would indicate that a normal
down payment would achieve a loan in today's marketplace. And,
probably, the interest rates would be lower than PCOne's.
With a reasonable up front project investment, the rental rates sought
could be achieved. Then the developer would be putting the money
into the project to achieve the rent level sought.
The developer of PCOne made it without a tax free lunch; why can't this
one? What breaks will others ask you to consider? A tax abatement will
put PCOne at a disadvantage? What options are open for us to compete?
Thank you for your thoughtful consideration.
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Sincerely,
~hC!Jt.d Y~..w
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John H. Lind
Richard F. Hansen
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February 22,1994
City Council
City of Iowa City
410 E. Washington
Iowa City, Iowa 52240
Councilors:
, We have some questions about the Urban Revitalization District
as currently proposed for the South of Burlington neighborhood.
The proposed District includes the vast majority of the CBS
Zone but excludes properties south of Court Street. We understand
that the decision to exclude these properties was made under the
assumption that there are no sites for new development.
The decision has now been made to encourage rehabilitation of
existing historic structures as part of the revitalization plan. We
would therefore ask the Council to consider including all of the CBS
properties in the Urban Revitalization District. There are several
buildings in the area south of Court along Gilbert that are
underdeveloped and could be qualified under the plan.
Property owners in this area will soon face an increased tax
burden to pay for the redevelopment of Maiden Lane, yet would be
denied the potential rehabilitation assistance being granted to the
rest of the southside commercial district.
We hope you recognize our pioneering efforts to create a vital
commercial district and afford us equal opportunity in continuing the
rehabilitation of this area and the growth of downtown.
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Ordinance No. 94-3609
Page 2
area was not expected to develop due to
the lack of sanitary sewer on the University
property,
b. Actions taken by City Council in approving
the project, On October 2, 1990, the City
Council adopted Resolution 90-183
authorizing an agreement with MMS
Consultants to design the sewer. On April
2, 1991, the City Council held a public
hearing on the plans, specifications, form
of contract and cost estimates. Following
the public hearing, the Council passed
Resolution 91-53 approving the plans and
specifications of the project and authorizing
advertisement for bids. The City awarded
the Northwest Sanitary Sewer Project
contract to Maxwell Construction Company
on April 22, 1991, by Resolution No. 91-
83. In Resolution 91-293 adopted on
December 10, 1991, the City Council
accepted the work for improvements
covering the Northwest Sanitary Sewer
Project.
The City Council authorized the issuance
of general obligation bonds as interim
financing to pay the construction costs of
the Project in Resolution No. 90-227.
c. Total project cost, The total actual cost of
the Project, as certified by the City
Engineer, is $807,646.94. This cost
includes $213,220.70 in interest costs.
d. Total area benefitted, The Northwest
Sanitary Sewer Project benefits a total of
865.7 acres, The 865.7 acres has been
divided into eight 181 subareas labeled A
though H for cost allocation purposes. See
Figure 1.
e. Building permits. All tap-on fees must be
paid prior to connection to the City's
sanitary sewer. No building permits shall
be issued for any parcel or tract of land
located in the benefited area until the
property owner or building permit applicant
pays the tap-on fee for that parcel or tract.
f. Schedule of fees. The following table lists
the tap-on fee per acre for the eight
subareas In the benefitted area. The fee
reflects the actual costs of the benefits
associated with each subarea.
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Ordinance No. 94-3609
Page 3
Subarea Acres Fee Der acre
A 83.6 $1,137.04
8 75.4 $2,017.44
C 75,8 $2,017.44
D 68.3 $1,243.30
E 296.9 $362.90
F 36.2 $2,017.44
G 194.1 $362.90
H 35.4 $2,107.44
g. Agreements with developers. The City
may, in its discretion, enter into
agreements with developers subdividing
property in the benefitted area, to allow
equalization of the tap-on fees among the
lots in the subdivision, including
agreements for the prepayment of tap-on
fees, the payment of tap-on fees on a per
lot basis and development sequencing.
Such agreements shall not in any way alter
the requirements regarding building permits
set forth in section e above.
h. Maps and illustrations,
Figure 1: Project area divided into eight
subareas.
Figure 2: Map illustrating the general
location of the project area in relation to
the Iowa City Comprehensive Plan.
Figure 3: Legal description of the
Northwest Sanitary Sewer Project.
Figure 4a and 4b: Plat of the Northwest
Sanitary Sewer Project.
Figure 5: Map showing the property
benefitted by the Northwest Sanitary
Sewer.
Figure 6: Legal description of the
properties benefitted by the Northwest
Sanitary Sewer.
Figure 7: City Engineer's cost
certification
SECTION II. REPEALER. All ordinances or
parts of ordinances in conflict with tha
provisions of this Ordinance are hereby
repealed.
SECTION III. SEVERABILITY. If any of the
provisions of his Ordinance are for any reason
declared illegal or void, then the lawful
provisions of this Ordinance are deemed
severable and shall remain in full force and
effect.
SECTION IV. EFFECTIVE DATE. This
Ordinance shall be in full force and effect from
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Ordinance No. 94-3609
Page 4
and after its final passage, approval and
publication, as provided by law.
Passed and approved this ls.t. day of MaJ:ch,
1994.
~ /hrdn.-,,;;5/ .
MAYOR - ,
ATTEST: \~ ~ ~~
CITY CL K
AplHoved by
.Th.c1M~ w . Z~
'. City Attorney's Office r _ J, 7 - ~ ~
marshab\lapon,ord
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It was moved by Kubby and seconded by Throgmorton that the Ordinance
as read be adopted, and upon roll call there were:
NAYS:
ABSENT:
AYES:
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Baker
Horowitz
Kubby
Lehman
Novick
Pigott
Throgmorton
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First Consideration 2/1/94"
Vote for passage: AYES: Kubby, Lehman, Novick, Pigott, Throgmorton,
Baker, Horowitz. NAYS: None. ABSENT: None.
Second Consideration 2/15/94
Vote for passage: AYES: Kubby, Lehman, Novick, Pigott, Throgmorton,
Baker, Horowitz. NAYS: None. ABSENT: None.
Date published 3/9/94
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LEGAL DESCRIPTION OF THE NORTHWEST SANITARY SEWER
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commencing at a Concrete Monument found at the Northeast Corner
of Section 7, Township 79 North, Range 6 West of the 5th
Principal Meridian; thence SOoo03'27"E, along the East Line of
said Section 7, 2603.16 feet, to a point on the centerline of the
existing sanitary sewer; thence S880S9'39"W, along. said
centerline, S.72 feet, to the existing manhole, which is the
Point of Beginning; thence Nl8036'SO"W, 82.98 feet; thence
N6701S'43"W, 21.00 feet; thence" N6701S'43"W, 400.00 feet; thence
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S49026'49"W, 400.00 feet; thence S36034'17"W, 400.4S feet; thence'
SSsoOS'12"W, 312.31 feet, to its intersection with the West Line
of the East t of said Section 7.
And also commencing at the Southeast Corner of the Fractional
Southwest Quarter of Section 7, Township 79 North, Range 6 West,
of the Sth Principal Meridian, and for the purpose of this Legal
Description the South Line of said Southwest Quarter is assumed
to bear S89007'30"W, in accordance with existing Survey Plats of
Record; thence NOoo22'S4"E, along the East Line of said
Fractional Southwest Quarter of section 7, 1788.07 feet, to the
termination of the previously described Sanitary Sewer, which is
the Point of Beginning; thence SSso22'S4"W, 36.S2 feet; thence
S28003'28"W, 219.92 feet; thence S60032'42''W, 39S.00 feet; thence
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S240S2'09"E, 263.46 feet; thence SS60S6'21"E, 318.12 feet; thence
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Figure No. 6
NORTHWEST INTERCEPTOR SEWER
SERVICE AREA DESCRIPTION
TOTAL SERVICE AREA
A portion of the South Half of the Southwest Quarter of Section 6 Town hi
79'North, Range 6 West of the 5th Principal Meridian described as'follO~s:P
Beginning at a point in the center of the fenced highway a distance of 787
feet N7'30'W of the Southwest Corner of Section 6, Township 79 North R
,6 West 'of. the 5th Principle Meridian; Thence N82'30'E, 1835.2' f:~~~
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c~rner of ~ald Section 6, Thence N7'30'W, 787 feet to the Point of Begin~
nlng, all ln the SW 1/4 of said Section 6.
AND ALSO:
The West Half of the Fractional Northwest Quarter and the West Half of the
Fractional Southwest Quarter of Section 7, TownShip 79 North, Range 6 West
of the 5th Principal Meridian.
EXCEPTING THEREFROM 25.0 Acres, more or less acquired for road purposes by
condemnation proceedings Recorded in Book 698, at Page 303 of the Records
of the Johnson County Recorder's Office.
AND ALSO:
The Southwest Quarter of the Southeast Quarter of Section 1, TownShip 79 .
North, Range 7 West of the 5th Principal Meridian
AND ALSO:
All that Portion of Parcels A, B, and C of Clear Creek Subdivision as
Recorded in Plat Book 25, Page 53, of the Records of the Johnson County
Recorder's Office, contained within Section.I2, Township 79 North, Range 7
West of the 5th Principal Meridian, EXCEPTING THEREFROM 6.33 acres of
Right-of-way easements, Recorded in Book 597, at Pages 22 through 27 of the
Records of the Johnson County Recorder's Office.
AND ALSO:
All that portion of Lot 1 of Charbon's Second Subdivision, as Recorded in
Plat Book 27, at Page 30 of the Records of the Johnson County Recorder's
Office, contained within the Northwest Quarter of the Northwest Quarter of
Section 12, Township 79 North, Range 7 West of the 5th Principal Meridian,
which is more particularly described as follows:
Commencing at the Northwest Corner of Section 12, Township 79 North, Range
7 West of the 5th Principal Meridian; Thence NS9022'30"E, along the North
Line of the Northwest Quarter of said Section 12, 397.44 feet, to its
intersection with the Northeasterly Right-of-way Line of the e'xisting
Secondary Road, on the Southwesterly Line of Lot 1 of Charbon's Second
Subdivision as Recorded in Plat Book 27, at Page 30, of the Records of the
Johnson County Recorder's Office, which point is the point of Beginningj
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Thence N89'22'30"E, along said North Line, 924.01 feet, to its intersection
w!th the East Line of said Lot 1: Thence SOO'23'47"E, along said East
Llne, 929.77 feet, to the Southeast Corner of said Lot l' Thence
N47'12'00"W, alo~g the Southwesterly Line of said'Lo~ 1, 930.30 feet. I
Thence N40'45'00 W, along said Southwesterly Line, 379.61 feee, to th~ '
Point of Beginning. Said tract of land contains 10.32 acres, more or less
and is SUbject to easements and restrictions of record. '
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AND ALSO:
A parcel of land located in the NW 1/4 SE 1/4 of Section 12, Township 79
North, Range 7 West of the 5th Principal Meridian, City of Iowa City,
Johnson County, Iowa,
descriped as follows:
"
Beginning at'the SW Corner of the NW 1/4 SE 1/4 of said Section 12; Thence
NOO'22'W, 988.0 feet along the West Line of said NW 1/4 SE 1/4; Thence
S52'43'E, 885.0 feet: Thence S47'38.5'E, 652.2 ft. to the South Line of
said NW 1/4 SE 1/4; Thence S89'24'W, 1179.8 feet along said South Line, to
the Point of Beginning: containing 13.97 acres, more or less.
AND ALSO:
The South half of the Southeast Quarter of Section 12, Township 79 North,
Range 7 West of the ~th Principal Meridian. ; ~,
EXCEPTING THEREFROM 24.1 acres of eXisting Road Right-of-way conveyed by
Fee and Easements of Record and Recorded In Book 602, at Page 72, of the
Records of the Johnson County Recorder's Office.'
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AND ALSO:
The East half of the Northwest Quarter and the East Half of the Southwest
. Quarter of Section 7, TownShip 79 North, Range 6 West of the 5th Principal
Meridian.
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AND ALSO:
The Northwest Quarter of the Northeast Quarter and the Northeast Quarter of
the Fractional Northwest Quarter of Section 18, Township 79 Nortr, Range 6
West of the 5th PrinCipal Meridian.
EXCEPTING THEREFROM 5.4 Acres of Existing Road Right-of-way conveyed by Fee
and Easements of Record and Recorded In Book 698, at Page 328, of the
Records of the Johnson c~unty Recorder's Office.
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Figure No. 7
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COST CERTIFICATION
I, Richard A. Fosse, City Engineer for the City of Iowa City, Iowa, hereby certify that
construction of the Northwest Sanitary Sewer Project has been completed in substantial
accordance with the approved plans and specifications.
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I further certify that the total actual cost of the Northwest Sanitary Sewer Project is
$807,646.94, This cost includes $213,220.70 in interest costs.
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Richard . Fosse, P.E.
City Engineer
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Figure No. 6
NORTHWEST INTERCEPTOR SEWER
SERVICE AREA DESCRIPTION
TOTAL SERVICE AREA
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of the South Half of the Southwest Quarter
Range 6 West of the 5th Principal Meridian
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ection 6, Townshi:
cribed as follows:
Beginning t a point in the center of the fenced hi way a distance of 787
feet N7'30' of the Southwest Corner of Section 6, ownship 79 North, Rango
5 West of t 5th Principle ~Ieridian; Thence N82'30'E, 1835.2 feet~
Thence S13'26' 919 feet; Thence S85'10'W, 15 2.5 feet to the Southwes.
Corner of said ction 6, Thence N7'30'W, 787 eet to the Point of Begin~
ning, all in the 1/4 of said Section 6.
,; ,.\.NO ALSO:
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The 'llest Ha 1f
Fractional Southwest Qua ter of
of the 5th Principal ~leri 'an.
Northwest Quarter and the West Half of the
Section ,Township 79 North, Range 6 West
=XCEPTING THEREFROM 25.0 Acr s, more r less acquired for road purposes by
condemnation proceedings Reco ded i Book 698, at Page 303 of the Records
of the Johnson County Recorder' Of ice.
MID ALSO:
The Southwest Quarter of the
North, Range 7 West of the 5t
Quarter of Section 1, .Township 79
Meridian
A~iD ALSO:
All that Portion of Par of Clear Creek Subdivision as
Recorded in Pl at Book 2 , Records of the Johnson County
Recorder's Office, cont ined within Sectio .12, Township 79 North, Range 7
'Ilest of the 5th Prin ipa1 Meridian, EXCE TING THEREFROM 6.33 acres of
Right-of-way easement, Recorded in Book 597, at Pages 22 through 27 of the
Records of the Johns .1 County Recorder's Offic .
.' 'O~ ALSO',
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,~1 i of Lot 1 of Charbon's Second Suo ivi s ion, as Recorded i r
= 1~: cook 27, Page 30 of the Records of the Jo nson County Recorder's
C"fice, contai ed ~Iithin the tlorth',oJest Quarter of th t;orth'.oJ'3st Quarter of
Section 12, T nship 79 North, Range 7 West of the 5t Principal Meridian,
w~ich is mor particularly described as follows:
"
the Northwest Corner of Section 12, Townsh 79 North, Range
he 5th Principal ~Ieridian; Thence N39'22'30"E, along the tlortr,
he tlorth'llest Quarter of said section 12, 397.4 feet, to its
ion with the tlortheaster1, Right-of-way Line of the existin:
y Road, on the South'llesterl, Line of Lot 1 of Char n's Secon.:
Subdiv sion. as Recorded in Plat Book 27, at Page 30, of the Ree ds of the
~':.rln3oon County Recorder's Office, ~Ihich point is the Point of B_ inning;
C:'r.1mencing
7 'tiest of
Line of
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W1 h the East Line of said Lot 1; Thence SOO'23'47"E, alo g said East
Lin , 929.77 feet, to the Southeast Corner of said Lo 1; Thence
N47' 'OO"W, along the Southwesterly Line of said Lot I, 930.30 feet.
I Thence N40045'OO"W, along said Southwesterly Line, 379. 1 feet to th~
Point of eginning. Said tract of land contains 10.32 ac es, more 'or less
and is suo'ect to easements and restrictions of record. '
AND ALSO:
A parcel of lan located in the NW 1/4 SE 1/4 of ection 12, Township 79
North, Range 7 W st of the 5th Principal Merid'an, City of Iowa City,
Johnson County, 10
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descriped
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Beginning at. the SW Corn r of the NW 1/4 SE 1 4 of said Section 12; Thence
NOO'22'W, 988.0 feet a10 9 the West Line 0 said NW 1/4 SE 1/4; Thence
S52'43'E, 885.0 feet; Th nce S47038.5'E, 652.2 ft. to the South Line of
,. said NW 1/4 SE 1/4; Thence S89'24'W, 1179.8 feet along said South Line, to
, the Point of Beginning; con aining 13.91 acres, more or less.
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AND ALSO:
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The South half of the Southeast uar, er of Section 12, Township 79 North,
Range 7 West of the 9th Principal Iridian.
i EXCEPTING THEREFROM 24.1 acres 0 xisting Road Right-of-way conveyed by
Fee and Easements of Record and Rec ded in Book 602, at Page 72, of the
Records of the Johnson County R corder's Office.
AND ALSO:
,
The East half of the Northw st Quarter an
Quarter of Section 7, Town ip 79 North, R
~Ieridian.
the East Half of the Southwest
ge 6 West of the 5th Principal
AND ALSO:
d the Northeast Quarter of
'wnship 79 Nort~, Range 6
The Northwest Quarter f the Northeast Quarter a
the Fractional Northw st Quarter of Section 18,
West of the 5th prin ipal Meridian.
EXCEPTING THEREFRO 5.4 Acres of Existing Road Right f-way conveyed by Fee
and Easements of ecord, and Recorded in Book 698, at Page 328, ,of the
Records of the Jo nson County Recorder's Office.
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