First Market District housing project approved for city incentives
KENT DARR Oct 10, 2016 | 3:18 pm
2 min read time
467 wordsAll Latest News, Business Record Insider, Real Estate and DevelopmentThe Des Moines City Council has given initial approval to a tax incentive and loan package for the first residential project planned for the city’s Market District.
Matt Connolly and Frank Levy plan a $9.4 million, four-story building on a strip of land between Southeast Sixth and Seventh streets and bordered by Martin Luther King Jr. Parkway on the south and Raccoon Street on the north.
The property was purchased by the city when it acquired land for the extension of Martin Luther King Jr. Parkway east from Southeast Fourth to Southeast 10th streets. Connolly and Levy, operating as Market District One LLC, will buy the land at market value.
In addition to a unique location in an area that has at least two other larger industrial tracts under contract, the 53-unit housing project includes a combination of market-rate and affordable housing.
Twenty-seven units will charge higher, market-rate rents, while 24 units will be reserved for people making 80 percent of median family income and two units will be for people making 30 percent of median family income.
The finance package consists of a $125,000 economic development grant and tax increment financing with an estimated value of $340,000. Under changes to the city’s tax abatement program that take effect Jan. 1, the project will qualify for 10 years of relief of property taxes on a declining schedule that starts at 100 percent. In addition, the development was approved last year for $850,613 in state Workforce Housing tax credits.
The Workforce Housing tax credit program provides a refund of state sales, service or use taxes paid during construction and a state investment tax credit up to a maximum of 10 percent of the investment directly related to construction of the project. The tax credit awards also require a local incentive of at least $1,000 per housing unit.
Also in the Market District, Nelson Construction & Development has an offer pending for the 2-acre Rowat Cut Stone property at 110 S.E. Seventh St., and an as yet undisclosed out-of-town developer has made an offer for a site immediately south of Rowat at 220 S.E. Sixth St. Read more in this Business Record Insider Notebook article. 
The Market District, a part of the city’s East Village, was identified as a future redevelopment area in 2010. The city of Des Moines, JSC Properties Inc. and MidAmerican Energy Co. have submitted a site that is between Southeast Second and Southeast Fourth streets and north of Martin Luther King Jr. Parkway for a new federal courthouse.
The property in the 12-acre area is owned by MidAmerican and the city of Des Moines. Businessman Jim Cownie, founder of JSC Properties, had previously talked to MidAmerican officials about the private development potential of some of its property that is located in or near the site.
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