Incentive would be for housing built in next 3 yrs.

Residents and developers may soon have a new incentive to build in Albert Lea.

The Albert Lea City Council unanimously supported a new tax abatement program on Tuesday, which would eliminate city property taxes for five years on single-family homes, duplexes and multi-family housing with less than four units built in the next three years.

City staff plans to discuss the program with the Albert Lea School Board and Freeborn County Board of Commissioners to gauge support.

The program aims to establish the city’s use of tax abatement for housing initiatives and to “provide incentives to encourage the construction of new owner-occupied and rental residential housing units within the city of Albert Lea,” said City Manager Chad Adams.

The program will increase Albert Lea tax valuations and its tax base, which will benefit taxpayers and the city, Adams said.

Though the housing market will not kick off for a few months, Adams said it is beneficial to begin discussing the program.

“It’s nice to get this out there to developers or builders who are looking at potentially building a home, or somebody in the community who is looking to build a home, that we’ve got this policy available,” he said.

The project is planned to be in the pilot stage for three years and could be amended.

City staff are considering tax abatement for other residential projects above the four-unit limit, Adams said.

Austin, Worthington and Waseca have adopted nearly identical programs, he said.

The Austin City Council voted in August to approve the Austin Housing Initiative as a way to boost and incentivize new housing projects.

Applicants must meet several provisions to qualify for the program:

The assistance will be provided within state auditor interpretation, debt limit guidelines and other appropriate requirements and policies.

The project must be in accordance with comprehensive land use plan and zoning ordinances, or required changes to the land use plan or zoning ordinance must be under active consideration by the city at the time of approval.

Property must be within corporate limits of the city and be zoned properly for any proposed development.

The applicant must not have received other local financial assistance, such as tax increment financing, workforce housing or Small Cities Development Program funding.

Construction must start no later than six months from the date of approval, which includes building permits.

Property taxes must be paid on time and in full.

Approval must be secured before the start of construction of the housing unit or home.

Applications will be considered on a first-come, first-serve basis, and the acceptance of new applications will be dependent on the availability of funds, Adams said.

Property taxes, including city, county and school, would be about $2,250 on a home valued at $150,000, Adams said.

The city plans to cap total tax abatement at $100,000 each year to allow for it to be used in other economic development tools.

In other action, the council:

Accepted Merna Sunde estate trust donations, which designated $25,000 for the Albert Lea splash pad and $25,000 to the Marion Ross Performing Arts Center. The city plans to display Sunde’s art as a requirement of accepting the funds. Pieces will be selected in the near future.

Oversaw the final meetings for councilors George Marin, John Schulte V and Larry Anderson. Each counselor gave a final address.

Approved an off-site gambling permit for the Albert Lea Amateur Hockey Association for Jan. 28 at City Arena.

Indicated its approval of the Shell Rock River Watershed District’s proposed renewal of its half-percent sales tax.

Declared a 2002 Dodge Durango as unclaimed property, which allows for a notice of a public sale for three weeks. The vehicle may be sold if it is not claimed during the three weeks.

Authorized a transfer of $500,000 in funds from the general fund to the building maintenance fund for upcoming capital improvements at the Aquatic Center, City Arena, City Hall and City Garage. 

Approved an encroachment agreement between the city and Freeborn County Properties LLC for Vern Eide Chevrolet to install a sign, which would partially encroach into a city-owned easement.

Accepted a $475 donation for Senior Center programs and activities.

Modified City Manager Chad Adams’ travel allowance from $350 to $425 and changed his needed notification for leaving his position from 60 days to 30 days to correspond with other entities.