Concerns Raised Over Adel’s Tax Abatement Program and Possible Annexation

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ADEL, Iowa  --  Seven years, no taxes...not a bad deal, right? The tax abatement program has attracted folks to Adel from all over, causing lots of growth and new developments like Bear Estates off of 288th Trail.

"It was a big deciding factor in moving out to Adel and building a house," said Ashli Agard, who moved to Adel from Urbandale.

"No taxes has been huge," said Karie Livingston. "We lived in Ankeny before, and so it was just a good opportunity for us to build in Adel and it made it affordable to do that."

But not everyone sees the tax abatement plan as a good thing.

"My husband and I are probably what I would call the first casualty of the abatement issue," said ReNae Arnold of K Avenue. ReNae and her husband bought a new construction foreclosure house in Adel in 2009, on South 16th Street. The couple poured money into the home to fix it up and then put it on the market.

"We bought it for $235,000," said Arnold. "With everything that we did to finish it and by the time we were done we should have been able to sell it for at least $329,000, and we ended up selling it for $284,900, so we did not break even at that point."

ReNae says they just could not compete with the tax abated homes.

"We just couldn't get anybody to look at it because they were going a block down the street for the tax abated homes, because if anybody hears they get $40-50,000 in free taxes, they think they're getting a good deal on a new home."

ReNae's father, a state lawmaker, is concerned about the tax abatements causing what he calls a "massive transfer of state funding into one school district," to make up for the loss of education funding that would have otherwise been provided for by property taxes.

"It's unfair and if all, very many school districts around the state did that, it would totally tilt our state budget," said Republican Representative Ralph Watts of Adel.

Todd Chapman, a lifelong resident of the community, shares that concern.

"If other cities do this, what Adel's doing, I mean think of the millions of dollars that the state's going to have to come up with to backfill every other school," said Chapman.

Now the city is proposing an annexation of more than 1,000 acres south of town. A public hearing on annexation was scheduled for Tuesday night at at the library, but the city canceled that hearing after realizing it had not mailed out written notices within 14 business days of the scheduled public hearing, as is required.