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For use in this chapter, the following definitions apply:
1. “New construction” means new buildings or structures and includes new buildings or structures that are constructed as additions to existing buildings or structures. “New construction” also includes reconstruction or renovation of an existing building or structure that constitutes complete replacement of an existing building or structure or refitting of an existing building or structure, if the reconstruction or renovation of the existing building or structure is required due to economic obsolescence, if the reconstruction or renovation is necessary to implement recognized industry standards for the manufacturing or processing of products, and the reconstruction or renovation is required in order to competitively manufacture or process products or for for-profit entities to market a building or structure as a speculative shell building, which determination must receive prior approval from the Council.
2. “Speculative shell building” means a building or structure owned and constructed or reconstructed by a for-profit entity without a tenant or buyer for the purpose of attracting an employer or user that will complete the building to the employer’s or user’s specification for manufacturing, processing, or warehousing the employer’s or user’s product line.
The new construction of shell buildings by the for-profit entity for speculative purposes is eligible for property tax exemption. The exemption shall be for one of the following:
1. The value added by new construction of a shell building or addition to an existing building or structure.
2. The value of an existing building being reconstructed or renovated, and the value of the land on which the building is located, if the reconstruction or renovation constitutes complete replacement or refitting of the existing building or structure.
This exemption shall apply only (1) for properties that are currently served with public water and sewer and for which no road improvements are needed; or (2) for properties for which the developer will assume all responsibilities for such public improvements.
1. If the exemption is for a project described in Subsection 1 of Section 7A.03, the exemption shall be effective for the assessment year in which the building is first assessed for property taxation or the assessment year in which the addition to an existing building first adds value. If the exemption is for a project described in Subsection 2 of Section 7A.03, the exemption shall be effective for the assessment year following the assessment year in which the project commences. An exemption allowed under this section shall be allowed for all subsequent years until the property is leased or sold or until the exemption is terminated by ordinance of the City Council.
2. Eligibility for an exemption as a speculative shell building shall be determined as of January 1 of the assessment year. However, an exemption shall not be granted for a speculative shell building of a for-profit entity if the building is used by the for-profit entity or a subsidiary or majority owners thereof for other than as a speculative shell building. If the shell building or any portion of the shell building is leased or sold, the portion of the shell building that is leased or sold and a proportionate share of the land on which it is located, if applicable, shall not be entitled to an exemption under this section for subsequent years. Upon the sale of the shell building, the shell building shall be considered new construction for purposes of Section 427B.1 of the Code of Iowa if used for purposes set forth in Section 427B.1.
1. If the speculative shell building project is a project described in Subsection 1 of Section 7A.03, an application shall be filed pursuant to Section 427B.4 of the Code of Iowa.
2. If the speculative shell building project is a project described in Subsection 2 of Section 7A.03, an application shall be filed pursuant to Section 427.1(27) of the Code of Iowa.
A person may submit a proposal to the City Council to receive prior approval for eligibility for a tax exemption on new construction. The City Council, by ordinance, may give its prior approval of a tax exemption for new construction if the new construction is in conformance with the zoning plans for the City. The prior approval shall also be subject to the hearing requirements of Iowa Code Section 427B.1. Prior approval does not entitle the owner to exemption from taxation until the new construction has been completed and found to be qualified real estate. However, if the tax exemption for new construction is not approved, the person may submit an amended proposal to the City Council to approve or reject.