‘It essentially levels the playing field’

City of Eagle Grove offers tax breaks for new developments

EAGLE GROVE — People who decide to locate their home or business in Eagle Grove are eligible for certain tax breaks through an improved city policy, according to Bryce Davis, city administrator.

One area in particular, known as the Eagle Grove Revitalization District, offers developers a five-year, 100 percent property tax abatement and an additional five-year, 50 percent tax abatement, Davis said.

“So your total tax abatement period is 10 years after you build,” he said. “That’s single-family or multi-family.”

The Eagle Grove Revitalization District encompasses the entire northeast corner of the city, which Davis said is the older part of town.

“It’s everything east of the railroad tracks and everything north of Second Street,” he said. “It’s a pretty big area.”

Officials amended plans for that district during the City Council’s meeting on Monday.

“Essentially the purpose is to revamp a comprehensive city-wide tax abatement policy,” Davis said. “The last time we identified tax abatement for residential new construction essentially was in 1993. Laws have changed since then and obviously the cost of construction has changed since then. It’s essentially revamping the tax abatement policy to provide more of a thank you or incentive, depending on what type of development and reasoning why for that development the individual has.”

The Eagle Grove Revitalization District has 14 open lots controlled by the city or the Community Development Corporation.

Developments outside of the Eagle Grove Revitalization District are eligible for a five-year, 100 percent tax abatement on the first $75,000 of assessed valuation.

“We also did if you improve your house over 10 percent anywhere in town, you will get the tax abatement schedule for three-year, 100 percent on the improvements only,” Davis said.

Additionally, if a developer improves a commercial building in the city’s downtown district, they are eligible for a three-year, 100 percent tax abatement on those improvements, he said.

“It essentially levels the playing field,” Davis said. “If I had multiple individuals apply for a building permit, as long as they follow the parameters of our application, they will get that tax abatement schedule.”

He added, “It just evens the playing field a little bit. The city is not in the business of picking winners or losers. So if anyone wants to build a development or home within the city, they have that ability. It’s a simplified process. We don’t have to have development agreements, we don’t have to have any type of risk mitigation strategies from a city perspective because if they build it, they will get that schedule and after that, they will start paying property taxes and it will go to a different taxing jurisdiction. As long as we don’t have any infrastructure costs in the project from a city perspective, it’s just a streamlined process that anyone can apply for as long as they meet certain parameters.”

Eagle Grove property tax abatement policy

• In the Eagle Grove Revitalization District, which covers the northeast section of the city, developers can receive a five-year, 100 percent property tax abatement with an additional five-year, 50 percent tax abatement.

• Anywhere outside of the Eagle Grove Revitalization District, developers can receive a five-year, 100 percent tax abatement on the first $75,000 of assessed valuation.

• Improvements on a home anywhere in Eagle Grove can earn the owner a three-year, 100 percent tax abatement on the improvements only.

• Developers who improve a commercial building in the city’s downtown district are eligible for a three-year, 100 percent tax abatement on those improvements.

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