Monona Council mulls over potential development of subdivision lot

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By Audrey Posten, North Iowa Times Editor

The Monona Council discussed the potential development of lot 19 of the Gordon Subdivision at its regular meeting Jan. 9. 

Currently one large lot located between Highway 18 and residential property along Darby Drive, it was recently considered as a potential site for a Dollar General store. Now, said city administrator Dan Canton, there has been talk of subdividing the land into smaller lots (perhaps five) to form a cul de sac.

The question, Canton noted, is how the lot can best be developed for residential use and how to pay for the infrastructure. One way, he said, is through tax increment financing (TIF).

TIF, Canton shared, is “the difference between the base lot and one with a house.”

According to the Iowa Legislative Services Agency, “under tax increment financing, the property taxes collected from the consolidated tax rate levied against the increase in taxable valuation over the base valuation of property in the area are segregated. The consolidated tax rate is the sum of all property tax levies certified to the county to be collected as property taxes.” Those segregated property tax receipts can be captured and distributed back to a potential developer in order to pay for the creation of infrastructure. The city could also pay for the infrastructure, in which case the funds would go back to them.

“In order to be a TIF district, there has to be a debt incurred by somebody,” Canton said. 

Canton estimated that infrastructure—including water, storm sewer, chip sealing a street and curb and gutter—would cost $126,000. The area already has sanitary sewer.

The value of the homes built on the lots would determine the amount of property taxes, and thus the speed at which the infrastructure funding could be recovered, he shared.

Councilman John Elledge worried the money that would later be returned to the city would be worth less than when the city paid for the infrastructure.

“Why doesn’t Monona Enterprises pay for it?” questioned councilman Dan Havlicek. “Why is the city doing it?”

“They’re looking for a partnership,” noted mayor Fran Passmore. “I think working together is the TIF district. I think it would be good for the area to be developed, if possible.”

Passmore said there would be additional meetings with Monona Enterprises about options for the lot. 

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