A recent boom in Campustown construction may be due to property owners paying less in taxes. Owners of new buildings going up and those being renovated are seeing tax breaks because of the Campustown Urban Revitalization Program.

Richard Horn, Ames city assessor, said the only current tax abatement district is in Somerset in northwest Ames. Tax abatement in Campustown is done on a project-by-project basis, but a project is only eligible if it is in the Urban Revitalization District, he said.

Projects have been considered “one at a time for three or four years now,” Horn said. “We’re not in the habit, recently at least, of condemning land so they’ll build something on it that we want.”

According to the Campustown Urban Revitalization Program tax exemption schedule, “all qualified real estate located in the designated Campustown revitalization area is eligible to receive a partial exemption from taxation on the Actual Value added by the improvements…”

Property owners can choose to be partially exempt on paying taxes for a period of three, five or 10 years, according to the tax exemption schedule.

Joe Pietruszynski, Ames city planner, said a district is established where the city wants certain types of projects to occur, which could be anything from wanting more density to preserving historic structures. The district must meet state criteria, and once it’s created landowners can apply for tax abatement when they prove they have met the criteria, he said.

“What it really means is the community is saying, ‘We’ll give you tax abatement, but you have to give us something for it,'” Pietruszynski said.

For example, 127 Welch Ave. is in the university impacted district and has a 2003 assessed value of $577,000. If the property owner, Scott Randall, applied for the tax abatement and did what was required to get the abatement, he would get an 80 percent or 100 percent abatement on his taxes in the first year, depending on which exemption plan he chose. Randall paid $8,697 in taxes in September 2003 and again in March 2004.

Apartment buildings not in the Urban Revitalization district are not eligible for the tax break. For example, 1300 Coconino Road, in southwest Ames was assessed at $6,604,000 in 2003. Property owners of the building paid a total of $199,254 in taxes for Sept. 2003 and March 2004 combined. Large scale apartment buildings being built in Campustown that would have paid comparable taxes are seeing large-scale tax breaks.

According to the Campustown Urban Revitalization Program application packet, projects are accepted for tax abatement only if they meet set standards.

In order to qualify for an abatement, the Urban Revitalization Campustown Criteria Matrix states property must meet several stringent requirements. (See sidebar).

According to the program’s revitalization application packet, the program requires that the improvement must add a minimum of 5 percent of value to the property.

“The most important thing is you have to be in the urban revitalization district,” said Jeff Benson, Ames city planner.

“The biggest thing is you need to use brick, but you can use other materials if it’s a historical building. It has to do with the city’s policy of looking at projects that would happen anyway, but have them done in a way that would fulfill the public purpose.”

Pietruszynski said density increasing in Campustown is already allowed under the current zoning.