USA - IOWA Trends and Developments Contributed by: David M Erickson, Robert J Douglas, Jr, Christopher S Talcott and Amy S Montgomery, Dentons Davis Brown
Redevelopment tax credits Developers have the opportunity to receive tax credits for revitalising properties categorised as “brownfield” and “grayfield” sites. Brownfield sites include abandoned, inactive, or underused industrial or commercial properties where either actual or perceived environmental contamination hinders redevelopment, such as properties pre - viously used as gas stations, dry cleaning facili - ties, and other businesses that may have used hazardous materials in their operations. Gray - field sites include abandoned public buildings and vacant industrial or commercial properties that are deteriorating, obsolete, or underused. The Iowa Economic Development Authority administers this tax credit initiative. Workforce housing tax credits The Workforce Housing Tax Incentive Program is administered by the Iowa Economic Devel - opment Authority consists of state tax credits awarded in an amount of up to USD1 million per project to developers providing housing in Iowa communities, with a focus on projects that rehabilitate abandoned, empty, and dilapidated properties. Local matching funds are required for a project, which can be through tax abatement from the city, cash grants, or other means. Common real estate documents required for Iowa’s tax incentive programmes Development agreement Developers are often required to enter into a development agreement with benchmarks for completion of the project and other obligations set forth in the agreement. Often, a correspond - ing memorandum of the development agree - ment is filed of record with the county recorder in the county where the property is located.
Minimum assessment agreement In conjunction with tax abatement and TIF incen - tives, developers are often required to enter into a written minimum assessment agreement, which establishes an agreed-upon minimum post-development assessed value for the land with completed improvements. Land Use Restriction Agreement (LURA) A LURA between the developer and the Iowa Finance Authority is required for LIHTC projects that sets forth compliance obligations for a pro - ject, such as income qualifications for tenants, transfer restrictions, record keeping require - ments, etc. The LURA is filed of record with the county recorder in the county where the property is located. Demand for increased development in Iowa attracts attention of Iowa legislature There has been a push in the Iowa legislature recently to expand incentives that encourage development that is gaining traction, specifi - cally with respect to incentives for development of “mega sites” consisting of over 1,000 acres of land. Iowa’s prized agricultural land has his - torically received extensive statutory protection, such as through restrictions on ownership of agricultural land by both domestic and foreign entities. As a result, legislation for development incentives that affects agricultural land requires a delicate balance between preserving farmers’ interests while promoting development. New proposed legislation, Senate File 574, would create the Major Economic Growth Attraction (MEGA) Program to be governed by the Iowa Economic Development Authority, which would increase the number of acres of agricultural land that can be owned by foreign entities and would provide tax incentives to foreign businesses if they meet certain requirements and are not
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