Proposed development could house area workers, benefit local Kiwanis Club

The Spirit Lake City Council voted unanimously last week in favor of a resolution supporting a proposed $18.8 million housing development. The resolution didn't financially commit the city to anything yet, but it's intended to aid Eagle Construction and Talon Development as the developers seek workforce tax credits for the project from the Iowa Economic Development Authority.

Robert Smith, representing the developers, discussed the proposed development with the Spirit Lake City Council during their April 22 meeting. Smith said developers hope to construct about 126 units on roughly 9 acres south of the Great Lakes Mall between Royal Avenue and Peoria Avenue. The development would feature three-story apartment buildings as well as a number of townhomes — he described the project as similar to the Tallgrass housing development, which was completed around 2016 and is situated along Sunner Avenue in Spirit Lake.

Smith described the newly proposed development as market-rate workforce housing. He said Eagle Construction and Talon Development have tackled about 27 similar projects over the past eight years, several of which were in western Iowa.

"The apartments are for the regular worker that wants to have a place to live close to work," Smith said. "There's a real need for that here, according to our market studies. Rather than having people drive-in for half-an-hour, they could live and work right in the community they're in. That's the niche that we like to work in. The smaller communities need to have people close by."

Spirit Lake City Administrator Gregg Owens said the city has prospectively budgeted for local matching funds it might provide, if the developers are successful in their application for state tax credits — he said the city's contribution would potentially come in the form of a $500,000 economic development grant as well as tax abatements estimated at a value of about $394,000. Owens later indicated the potential tax abatements would be a fair trade for ultimately putting the unoccupied land on the city's tax roll long-term.

Smith expressed similar sentiments.

"Every city has a set up like that where they work with states and the locals to, for a short period of time, forgive the taxes, and then with the new development, when it's stabilized, the taxes come back in and pay for all that through future taxes," he said. "It raises the economic value of the land substantially from a zero to — in this particular case — $18.8 million or $19 million."

Smith indicated the developers have already secured several million from local investors and plan to consider bonds, loans and other grant opportunities to finance the remaining total cost.

The lot on which the current proposed project would stand is currently owned by the Spirit Lake Noon Kiwanis Club, and Smith said the developers intend to take possession of the land in September. Owens said he sees the pending land sale as another benefit of the proposed project.

"It's nice that the beneficiary, if this comes to pass, is the Kiwanis Foundation, who will have a pretty sizable amount for their efforts on behalf of children in Dickinson County," Owens said. "There's no better steward of that money."

The 9.13 acre of land were donated to the local Kiwanis Club by Lee Seemann in March of 2023, according to county records — previous recorded land transfers valued the land at about $840,000 in 2022.

"The intention is that the proceeds from the sale become an endowment fund that will impact the lives of the children of Dickinson County for generations," the Kiwanis Foundation said in a statement.

A portion of what's called the Spirit Lake Kiwanis Club Berkley Place Trail runs through the northern side of the proposed housing project, and Smith said developers are interested in dedicating a portion of the land to ensure the public's continued use of the paved path. Owens explained the city currently holds an easement over the Kiwanis Club's trail, allowing the city to provide maintenance for the trail. He said developers are proposing the trail segment be made city property — decreasing the size of the available lot by less than an acre, but avoiding a city easement over a private residential development. The proposed plan would not change the city's current maintenance responsibilities for the trail, according to Owens.

Smith said developers expect to begin work on the housing project by October, and crews would continue their work for approximately the next 14 to 16 months. Developers hope to have the first phase of the project — largely consisting of apartment units — complete and fully leased by Christmas of 2025. Smith said crews will then move immediately into the project's second phase in mid to late 2026. He said that second phase will include additional housing units, such as the townhomes, as well as a community center and fitness facilities.

"It's a draw that really is a nice amenity, along with being able to use the city bikeway," Smith said, calling the proposal a cohesive project for new residents.

Smith said organizers may return to the Spirit Lake City Council for further approvals after the Iowa Economic Development Authority considers the project's application. Owens said he expects the IEDA will have considered the applications and made its decision by mid-August.