CHAPTER NO. 2290

AN ORDINANCE PROVIDING A PARTIAL PROPERTY TAX EXEMPTION FOR “SPECULATIVE SHELL BUILDINGS “PURSUANT TO SECTION 427.1 (27) OF THE 2005 CODE OF IOWA.

BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CLINTON, IOWA:

            Section 1.  Purpose.  The purpose of this ordinance is to provide a partial property tax exemption to speculative shell buildings constructed by certain organizations on a sliding scale for up to five years.  Upon the sale or use of the building, the property may be eligible for an industrial property tax exemption if certain criteria are used.

             Section 2.  Definitions.  The following definitions shall apply to the terms used in this chapter. 

                        a. (1) “Community development organization” means an organization, which meets the membership requirements of subparagraph (2), formed within a city or county or multicommunity group for one or more of the following purposes:  (a) To promote, stimulate, develop, and advance the business prosperity and economic welfare of the community, area , or region and its citizens.  (b)  To encourage and assist the location of new business and industry.  (c)  To rehabilitate and assist existing business and industry.  (d) To stimulate and assist in the expansion of business activity.

                         (2)  For purposes of this definition, a community development organization must have at least fifteen members with representation from the following:  (a) A representative from government at the level or levels corresponding to the community development organization’s area of operation.  (b)  A representative from a private sector lending institution.  (c)  A representative of a community organization in the area.  (d)  A representative of business in the area.  (e)  A representative of private citizens in the community, area, or region.

                         b. “New Construction” means new buildings or structures and includes new buildings or structures which are constructed as additions to existing buildings or structures.  “New construction” also includes reconstruction or renovation of an existing building or structure which constitutes complete replacement of an existing building or structure or refitting of an existing building or structure, if the reconstruction or renovation of the existing building or structure is required due to economic obsolescence, if the reconstruction or renovation is necessary to implement recognized industry standards for the manufacturing or processing of products and the reconstruction or renovation is required in order to competitively manufacture or process products or for community development organizations, not-for-profit cooperative associations under chapter 499, or for-profit speculative shell building, which determination must receive prior approval from the city council.

                         c. “Speculative shell building” means a building or structure owned and constructed or reconstructed by a community development organization, a not-for-profit cooperative association under chapter 499, or a for-profit entity without a tenant or buyer for the purpose of attracting an employer or user which will complete the building to the employer’s or user’s specification for manufacturing processing, or warehousing the employer’s or user’s product line.

            Section 3.  Property tax exemption for buildings of certain organizations

New construction for shell buildings by community development organizations, not for profit cooperative associations under chapter 499 of the code of Iowa or for-profit entities for speculative purposes or the portion of the value added to buildings being reconstructed or renovated by community development organizations, not for profit cooperative associations under Iowa Code chapter 499 or for-profit entities in order to become speculative shell buildings may be exempt from taxation pursuant to Iowa Code section 427.1(27).  Such exemption shall be effective for the assessment year in which the building is first assessed for property taxation or the assessment year in which the reconstruction or renovation first adds value and all subsequent years until the property is  leased or sold or until the exemption is terminated by ordinance of the city council.  Eligibility for an exemption as a speculative shell building shall be determined as of January 1 of the assessment year.  However, an exemption shall not be granted a speculative shell building of a not for profit cooperative association under Iowa Code chapter 499 if the building is used by the cooperative association, for other than as a speculative shell building.  If the shell building or any portion of the shell building which is leased or sold, the portion of the shell building leased or sold shall not be entitled to an exemption under this section for subsequent years.  An application shall be filed pursuant to section 427B.4 of the code of Iowa for each project for which an exemption is claimed. 

             Section 4.  Term and Amount of Exemption.  The actual value added by new construction of a speculative shell building as defined in this chapter is eligible to receive a partial exemption from taxation for a period of five years.  The amount of exemption from taxation for actual value added shall be as follows:

             For the first year       75%

            For the second year 60%

            For the third year     45%

            For the fourth year   30%

            For the fifth year       15%

            Section 5. Exceptions.  A property tax exemption under this chapter shall not be granted if the property for which the exemption is claimed has received any other property tax exemption authorized by law.

             Section 6.  Application for Exemption.  An application shall be filed for each speculative shell building resulting in actual value added for which an exemption is claimed in the manner provided by section 427B.4 of the code of Iowa.  The application for exemption shall be filed by the owner of the property with the local assessor by February 1 of the assessment year in which the value added is first assessed for taxation.  Applications for exemption shall be made on forms prescribed by the director of revenue and shall contain information pertaining to the nature of the improvement, its cost, and other information deemed necessary by the director of revenue.

             Section 7.  Prior Approval.  A person may submit a proposal to the city council for prior approval for eligibility for a tax exemption.  The city council, by ordinance, may give its prior approval of a tax exemption for a new construction if the speculative shell building is in conformance with the zoning plans for the city, provided such ordinance shall not be finally adopted until at least thirty (30) days after a public hearing as required by Iowa Code Section 427B.1.  Such prior approval shall not entitle the owner to said exemption until the new construction has been completed and found to be qualified real estate.  However, if the exemption for new construction is not approved, the person may submit an amended proposal to the city council to approve or reject. 

            Section 8.  Eligibility for Industrial Tax Exemption Under Chapter 427B of the Code of Iowa.  Upon the sale or use of the speculative shell building or a part thereof, said building shall qualify as new construction for the purpose of Chapter 427B of the Code of Iowa (2005) entitling the building or a part thereof to the industrial tax exemption for five years if said use has been recommended for said tax exemption by the “Quality Jobs 4A Strong Future Action Team” as meeting their program’s target criteria.  If said use does not meet the program’s target criteria, it shall not qualify for the industrial tax exemption for the entire five years, but the building shall qualify for the industrial tax exemption for the number of years it had remaining on the speculative shell building exemption at the exemption rate set forth for those remaining years.

            Section 9.  Repeal of Ordinance.  This chapter may be repealed by the city council when in its opinion continuation of the exemption granted ceases to be of benefit to the city, but all existing exemptions shall continue until their expiration. 

             Section 10.  Severability Clause.   If any section, provision, or part of this ordinance shall be adjudged 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 11.  Repealer.  All ordinances or parts of ordinances in conflict with the provisions of this ordinance are hereby repealed. 

             Section 12.  Effective Date.  This ordinance shall be in full force and effect from and after its adoption and publication as provided by law.

___________________________

Darrell G. Smith,

MAYOR PRO-TEM

Attest:  ______________________________

Deborah K. Neels, CITY CLERK

ADOPTED:  April 12, 2005.