Tax abatement proposal still sparks controversy
WORTHINGTON -- After meeting with city and school board officials and having several discussions during board meetings, Nobles County Commissioners on Tuesday decided once again to delay a decision on an economic development proposal hoped to increase new home construction.
The proposal, written by an ad hoc committee of the city, proposes to offer tax abatement on new single-family dwellings of $200,000 or more for a period of five years.
Commissioners Diane Thier and Marv Zylstra have spoken in opposition to the proposal since it was first introduced, saying the county can't afford to lose the tax revenue.
Other commissioners have suggested alternative options, such as providing the tax abatement on spec homes until occupied or reducing the period of abatement to three years.
Worthington City Administrator Craig Clark, in speaking to the board on Tuesday, said the city remains agreeable to the original terms and offered to answer any questions commissioners had.
"We don't want to see (the proposal) languish -- we want to see a final resolution," Clark said.
There was still some question among commissioners on whether the tax abatement program would extend to other communities and rural areas of Nobles County, or if it would just be offered to homes built in Worthington.
"We didn't have a position on how far it would go," said Clark, adding that District 518 Schools is favorable to offering the abatement district-wide.
"District 518 goes a long way -- to Wilmont and Rushmore," Commissioner Thier pointed out.
Benson said he was leaning toward accepting the proposal, if it was offered only for spec homes, was county-wide, and the abatement remained in effect only until the home was occupied.
"I really have trouble giving it that full five years," Benson added.
"If we could do just the city, fine," said Commissioner Vern Leistico. "If we had to do the whole county ... I think it's going to cost us too much in the long run. That's the way I feel. Really, I'm against your deal."
Commissioner Bob Demuth Jr. said the ad hoc committee's proposal was a step in the right direction.
"However the vote goes, I want to encourage the ad hoc group to continue with economic development," Demuth said. "I'm in favor of it for speculation houses until filled."
Brad Chapulis, city manager of community and economic development, said Worthington is in competition with neighboring counties and states to create jobs and housing.
"Economic development is a cut-throat business," he said. "What comes first, economic development or housing? You have to have both."
Chapulis spoke of a program in Spencer, Iowa, where the city, public utilities, county and banks pledged funds for grants up to $15,000 for purchases of new mid-range ($110,000 to $180,000), single-family homes within Spencer's city limits. Spencer is located about an hour's drive from Worthington. The grants are available on a first come, first serve basis, with a commitment of up to 40 grants or a deadline of Sept. 1, 2014, whichever comes first.
Benson encouraged the board to take another look at the proposal and "flush it out," while Leistico said he heard there are 14 houses valued at $250,000 or more in the city of Worthington that are currently on the market.
Leistico then presented a motion to abate taxes on up to 10 single-family units for a maximum period of three years. The motion died for a lack of a second.
Demuth followed that with a motion to table the matter, give commissioners an opportunity to review the abatement issue and then take action at the next board meeting.
Before then, the hope was to bring representatives of the city, county and school board together again for more discussion. Benson and Demuth will represent the county at that meeting.