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Marshalltown, IA, Officials Debate Use of TIF to Aid Self-Storage Expansion

Marshalltown, Iowa, officials are considering an expansion of the town’s Urban Renewal Plan (URP) for Area No. 3 to make way for a proposed self-storage expansion. The move is opposed by some local businesses as well as Marshall County officials, who believe it would set a bad precedent in the use of its Tax Increment Funds (TIF), according to the source.

The addition to the URP would be a small, commercial area on the south side of town, from Olive Street to S. Center Street to Iowa Avenue; but the move would give a self-storage business TIF money for the expansion, according to Mark Eaton, a local businessperson who’s against the proposal. “I am concerned the reason to expand this district is to give a person money [from TIF] to build or expand a business that does not create any jobs,” Eaton said on Monday during a public hearing. “TIF is used by cities and counties to attract people and businesses for jobs. TIF is used by governments in competition with other cities and counties who are using their TIF money to compete for those jobs. There is not competition in this instance. If this passes, it opens the door for me to ask for money to expand my business. I don’t think it should be passed.”

In addition to opposing the TIF aspects of the proposal, Marshall County officials have objected to the legal description of the area issued by the city, which was prepared by a city employee. “We have asked multiple times for pending legal descriptions to be done by somebody that is qualified, such as a surveyor. We still do not have an accurate description, and I think it is a bad use of TIF to give money to somebody so they can meet code for a storage facility that will not create any jobs,” said Whitney Hunt, the county’s assistant auditor/recorder.

Though the report indicates the addition would help one self-storage facility expand, Hunt’s comments indicated it would also create undo competition with another similar business. “It is within 1,800 feet of another self-storage unit facility,” Hunt continued. “You are planning on giving money to someone who is in competition with another business that has been there for 28 years. I do not think that is right. We have seven mini-storage facilities in Marshalltown. There are good uses for TIF and bad uses for TIF. This is not a good use.”

It’s possible the TIF could be used to add “taxable value” to the self-storage property, according to city administrator Jessica Kinser, who indicated the developer could include such a clause in the project application.

It’s not clear when the city council may formally review or decide on the URP proposal.

Source:
Times-Republican, Local Business, County Official Object to City’s Urban Renewal Plan

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