City Considers Tax Incentive For Assisted Living Facility
The Glenwood City Council could decide as early as its next meeting on June 13 if it’s going to give the owner of the former Park Place building nearly $400,000 in tax breaks with the hope he can turn the building at 114 Green St. into a privately-owned and operated assisted living facility.
Aaron Rodenburg is requesting a $396,000 “incentive package” that would include the rebate of outstanding property taxes owed on the building and a sliding- scale tax abatement plan over the next several years. Rodenburg purchased the Park Place building shortly after Five Star Quality Care closed the nursing-care facility in April 2015. Rodenburg conceded to council members he had hoped to resell or “flip” the property for profit, but soon realized the facility has limited use and is need of major renovation. He said he now plans to invest up to $2 million in the property to turn it into an assisted living complex that could house between 60-90 residents and create 25-30 jobs.
According to records on file at the Mills County Treasurer’s Office, the property currently has an assessed value of just under $276,000. Nearly $70,000 in property taxes incurred in September 2016 and March 2017 remain unpaid on the property. Under Rodenburg’s proposal presented to the city council, he would pay the outstanding $70,000 in taxes, but receive a refund of the city’s portion – approximately $24,000. In addition to the “rebate,” Rodenburg is requesting a future abatement of taxes on the property totaling $372,000.
During a committee meeting with council members last week, Rodenburg said up to this point he’s invested over $50,000 in the property and suggested the project would probably not move forward without both the rebate and abatement.
“If I just get the abatement, I don’t get any of my $50,000 back,” Rodenburg said.
Glenwood City Attorney Matt Woods said if city council members are receptive to the rebate, he would advise them to have a personal guarantee from Rodenburg that he would pay back the $24,000 should the project not come to fruition.
“The risk (to the city) is the project doesn’t go through and the city’s handed you $24,000,” Woods told Rodenburg.
Bob Josten, the city’s long-time bonding attorney, said the personal guarantee would be the city council’s way of saying, “If the project doesn’t get done, we want the money back.”
Josten, known statewide for his expertise on municipal funding and bonding matters, said the approach being discussed regarding Rodenburg’s proposal falls under the state’s definition of “Urban Revitalization.” The authorization of tax abatements isn’t uncommon for projects of this nature.
“The concept of abating (taxes) has been around for years and widely used around the state of Iowa, but it hasn’t been used widely in Glenwood,” Josten said.
Josten said the value of the abatement being considered with the project could result in a tax exemption that lasts “nine or 10 years.” Josten said the city has the authority to offer the abatement without the permission of Mills County or the Glenwood Community School District, two governmental agencies also directly impacted by the collection of taxes on the property.
Rodenburg told council members they should support his “incentive package” proposal because his project, “Glenwood Lake senior living community,” would address a need for additional assisted living beds in Glenwood and create jobs for the community.
A pair of council members offered differing views on his proposal.
Craig Florian stressed the importance of limiting risk and taxpayer liability, but appears to be receptive to Rodenburg’s request.
“There is a risk to us if Aaron doesn’t do anything with it (property),” Florian said. “Nobody else seems to be beating down the door (to buy the property). We don’t want the building to just deteriorate and come back to us.”
Dan McComb appeared less receptive, noting he has concerns about the property being “in conflict” with Glen Haven, the community’s long-time skilled-care and assisted living provider. Glen Haven is in the process of replacing its nearly 60-year-old skilled nursing home with a new “village” concept facility on the campus of the Glenwood Resource Center. Glen Haven also operates Linnwood Estates assisted living, which McComb pointed out was built without incentives from local property taxpayers.
“That’s their (Glen Haven’s) burden to come to you,” Rodenburg responded.
Glen Haven, a community-based non-profit organization, doesn’t pay property taxes on its skilled nursing facility, but is taxed for Linnwood Estates assisted living. Built at 700 N. Linn St. in 2003, the Linnwood Estates property is currently assessed at over $1.6 million with an annual property tax burden of over $33,000.
The city council is expected to take up Rodenburg’s request at its June 13 meeting. Josten is preparing documents for a possible tax rebate and/or abatement for the council members to consider.
EDITOR’S NOTE – Aaron Rodenburg declined to discuss his proposed project or his tax incentive request from the city when contacted by The Opinion-Tribune last week.