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DeWitt water tower

DEWITT — A developer is eyeing DeWitt for a sizable housing development that would include both senior and multi-family living.

Despite the need for both types of housing within DeWitt, City Administrator Steve Lindner and the City Council wondered if it would be too much, too quickly, as a similar project by a second developer has also been proposed.

Currently on the table are three separate developments. One, proposed by Davenport-based developer Chris Ales, is intended for senior residents with low-to-moderate incomes who are 55 years of age and older. That idea received positive comments by both the council and Lindner.

It would be an estimated $9.3 million investment, Lindner said.

“I think we certainly understand the need for senior apartments as a whole in our community,” said council member Garey Chrones.

If approved, it would be built in the field south of Casey’s along 11th Street.

The second proposed development, by Ales, is a multi-family, 36-unit development that, if approved, could be built south and east of the proposed senior living complex along an extension of 14th Avenue. It would feature a handful of market-rate units but primarily provide living quarters to families who meet the state’s LMI criteria. If approved, it would be built using Section 42 federal tax credits.

The third proposal, from North Arrow Partners in Villa Park, Illinois, was heard by the council last month and includes 36 units of LMI housing that would also use Section 42 tax credits. That project, if approved, would cost an estimated $5.5 million and occupy the space east of an extension of Eighth Avenue and north of an extension of 14th Street.

Approval process

The City Council at two separate meetings gave the projects a verbal but nonbinding blessing. The issue was originally discussed April 19, but some wording in the resolutions needed to be adjusted, so the council revisited it last week.

While offering its support, the council discussed the desire for only one of the two multi-family facilities to be built.

The council also approved potential property tax rebates to all the projects.

The support is the first step of many to get the projects off the ground, Lindner said.

The vote of support April 19 was one of the only DeWitt City Council votes in recent memory that was not unanimous. Council member Dawn Marcus on April 19 voted in opposition of the two multi-family developments; she was absent from last Monday’s meeting.

“I know several families that would love to build a home in DeWitt,” she said in an April 30 email. “I’m not against apartments, but I feel there is a bigger demand for single-family homes. I would much rather see a housing addition than apartment buildings.”

Marcus on April 19 voted in favor of the senior living complex.

Following the council’s blessing, one of the next steps is for the developers of all three projects to propose their developments to the Iowa Finance Authority, which scores all proposed LMI developments. Without the IFA’s approval, projects cannot get the proper funding and state tax credits that offset the developer’s cost. That key hurdle often can sink similar projects.

Part of that IFA approval process is a market study conducted for each development. The study, which is not paid for by the city, determines if the market – in this case, DeWitt – needs the housing, and if it can sustain it.

“There are many projects in this round (of IFA scoring), and many other rounds, that will go unfunded because they don’t score high enough,” Lindner said.

Council members, including Chrones, said they weren’t sure the market could sustain what would equate to about 70 new multi-family LMI apartments if both projects – in addition to the senior housing – were approved.

“If the IFA comes back and says within our community we could absorb all three, that doesn’t necessarily mean we should do them all at once,” Chrones said. “I am concerned with moving forward with all three, but I also feel that if we get IFA’s support, I could certainly see the senior housing and one of the other two.”

Therefore, in last Monday night’s meeting, Ales proposed a solution that was the key in gaining the council’s approval.

He said if both his developments, as well as North Arrow’s, is approved, Ales would withdraw his project, thus creating a situation where there would be one senior living development (by Ales) and one multi-family development (by North Arrow).

Any project must be approved by the city’s planning and zoning committee as well as the council before any construction can take place.

Why now?

The sudden onslaught of LMI developments is encouraged by recent rule changes in the IFA’s grading formula that includes incentives to communities affected by the Aug. 10 derecho.

Twelve Iowa counties, including Clinton, are recognized by the federal government as needing aid following the storm that brought hurricane-force winds through the area. The designation, provided by FEMA, allows renters and property owners in those counties to apply for cost-of-living assistance in relation to the storm.

However, Lindner said cities in those counties also are eligible for additional points on the IFA’s scoring system when it analyzes the viability of LMI housing projects.

“It makes DeWitt a prime spot for these developments,” Lindner said.

Another recent change is in the IFA’s income eligibility thresholds for tenants. The change, Ales said, allows property managers to host a wider variety of incomes within their properties.

“These programs are more attractive today than they were when we started,” Ales said.

Adjusting the eligibility rules means a wider array of tenants can live in the units, Ales said.

There currently is no Section 42 housing in DeWitt or in Clinton County, according to the Iowa Finance Authority’s website. If both multi-family LMI projects are approved, DeWitt would be the first town in Iowa with more than one Section 42 development, the IFA said.

Filling a need

A 2019 report by Iowa State University that analyzed economic trends of towns across the state found DeWitt generally imports more workers than it exports, a metric that shows the need for housing within DeWitt for those workers, Lindner said.

“There’s jobs – at least 1,000 to 1,200 manufacturing-type jobs,” Lindner said. “It depends on the month and year because it can fluctuate.”

The LMI, multi-family housing also can be used to attract students and young families to town, officials said.

Dave Necker, owner of Necker’s Jewelers who has worked with Ales on Quad City-based development projects in the past, told the council be believes DeWitt needs the housing.

“This is certainly something that hasn’t been addressed to its fullest for many years,” Necker said. “And so, working on these and bringing them to DeWitt can help with getting some young people to live in DeWitt. The low-to-moderate (income) family is something that would help the workforce in this community, and I believe is something we need. I have a knee-jerk reaction to anything that is low income, but I think I understand it differently than I used to.”

Nick Joos is the DeWitt Observer’s news editor.

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