A cluster of 12 duplex houses may soon develop on the western side of Fort Dodge with a little assistance from the city government.
The majority of City Council members said Monday night that they would support the use of tax increment financing to pay for a sanitary sewer line to serve those homes.
That move will not cost the city taxpayers any money, according to Councilman Kim Alstott.
The duplex development, to be called Windstone Circle, would be located on land surrounded by Second Avenue South, A Street and U.S. Highway 169. That property is owned by Eldon Rossow, of Fort Dodge.
A plan submitted to city officials by Rossow calls for building three duplexes immediately, followed by construction of the remaining nine in future years. The project is estimated to cost $3,677,550.
Mike McCarville, a Fort Dodge businessman whose company will build the duplexes, told the council Monday that each unit will rent for $1,500 a month. He said CJ Bio America will take the first three buildings to house employees of its plant under construction in the North central Ag Industrial park.
Tax increment financing, commonly called TIF, occurs when increased property tax revenue from a designated area is set aside to be reinvested in that area.
The proposal for Windstone Circle calls for creating a TIF district in which 60 percent of the revenue would be used to reimburse the developer for the cost of installing an 8-inch sanitary sewer line.
The sewer would cost about $108,000, according to City Manager David Fierke. He said the toatl cost of the project, including interest costs, would be $147,255.
Under the proposal, McCarville's company would install the sewer line and the TIF money would be used to reimburse that cost over several years.
Although the duplexes will not be low and moderate income properties, the use of TIF to support their development would yield money for low to moderate income housing elsewhere.
In the proposed scenario, 40 percent of the increased property tax revenue must be reserved for low to moderate income housing, according to Vickie Reeck, the city's community development manager. That amounts to $58,902.
''The 40 percent set aside is a requirement whenever TIF is used for a housing project and can be used for low and moderate income housing anywhere within the city,'' she wrote in a memo to the City Council.
Reeck reported that a housing TIF district automatically phases out after 11 years. After the district is phased out, the increased property tax revenue from the area is distributed according to the regular formula to the city, county and school district.
Fierke has developed a policy framework for using TIF on housing projects. In a report to the council, he wrote that the Windstone Court project is ''reasonable use'' of TIF.
Councilmen Dean Hill, Mark Taylor, Robert ''Barney'' Patterson, Don Wilson and Alstott said they would support the use of TI for the project. Councilman Dave Flattery said he's in favor of using TIF, but said he will have to abstain from the upcoming council vote because his employer CS Bank, is involved in the project.
Councilman Andy Fritz wasn't at the council workshop on the project, but he has indicated that he is in favor of using TIF for it.
The council will vote to establish the TIF district for the project on July 9. The district will be considered by the city's Plan and Zoning Commission when it meets at 4 p.m. today in the Municipal Building, 819 First Ave. S.