Storm Lake Council Rezones 13th Street Parcel for First Apartments in a Decade

Casey Orth-Nebbitt, a Storm Lake landlord who has watched the city go without a new apartment complex for 13 years, walked into this week's council meeting with a pointed question: if Storm Lake is finally getting the housing it needs, why should it also give away a decade of property-tax revenue to make it happen?

The Storm Lake City Council approved a rezoning at 211 E. 13th St., a 3.5-acre parcel immediately east of Ace Hardware, changing its designation from institutional to residential and clearing the legal path for Axis Properties of Orange City, Iowa to build the city's first multi-family apartment complex since 2013. The planning and zoning commission had unanimously recommended approval before the council acted. Building Official Scott Olesen told the council the project aligns with Storm Lake's comprehensive plan: "There has not been an apartment, solid, multi-family product since 2013. It provides a different housing option."

The need is well-documented. A Comprehensive Housing Needs Analysis by Maxfield Research & Consulting projects demand for approximately 1,450 new housing units in Storm Lake through 2035, a figure driven by some of the fastest population growth the city has seen in years. Storm Lake reached roughly 11,627 residents in 2024, up 8.2 percent from 2019 alone. One apartment complex will not close that gap, but it would be the first step taken in more than a decade.

What hangs over the project now is the abatement question Orth-Nebbitt raised before the council. Under Storm Lake's older ordinance, rooted in Iowa Code Chapter 404 (the Urban Revitalization Act), new multi-family development in designated urban revitalization areas may qualify for a 10-year, 100% property-tax exemption on the increased assessed value created by the improvement. State statute offers a more moderate alternative: a 10-year sliding scale starting at an 80% exemption and declining to 20% by year ten. Storm Lake's ordinance reportedly goes further, holding the exemption at 100% for all ten years. That structure means the added value of an Axis Properties apartment complex would generate no new property-tax revenue for Storm Lake's schools, Buena Vista County, or city services for the full decade, with existing property owners effectively absorbing the share that new development would otherwise contribute.

The fiscal exposure is difficult to quantify because the city itself has not tracked it. City Communications Coordinator Dana Larsen confirmed that Storm Lake lacks a comprehensive accounting of total abatement value granted under the older ordinance, leaving both the council and the public without a clear picture of how much has already been foregone.

Axis Properties' investment model adds another dimension. The Orange City firm structures its multi-family developments as 10-plus-year investor syndications with Axis as managing partner, a structure it used on the 64-unit CenterView Apartments in Sioux Center. If the Storm Lake project follows the same model, a 10-year, 100% abatement would provide a near-complete tax holiday across the entire core investment period, with full property-tax obligations potentially vesting just as the investor group considers an exit.

The Iowa League of Cities describes Urban Revitalization Act abatements as tools to incentivize investment "that might not otherwise occur." But with no new apartment product in Storm Lake since 2013, a verified 1,450-unit demand shortfall, and sustained population growth, Orth-Nebbitt and others argue the market conditions here may be sufficient to attract investment without maximum-duration relief.

Under Chapter 404, the council has legal authority to revise or sunset the older ordinance without state approval. Whether it exercises that authority before Axis Properties formally requests an abatement is the pivotal question as the project advances to final ordinance adoption, development agreement negotiations, and any required public hearings on tax incentives.