The Clear Lake City Council unanimously approved a request from One Vision Monday night to issue revenue bonds for its TimberCrest Apartments project on the main campus of the organization, formerly known as Opportunity Village.
City Administrator Scott Flory explained the City is authorized and empowered by provisions of Chapter 419 of the Code of Iowa to issue revenue bonds for the purpose of financing a project and facilities on behalf of an organization described as a 501(c)(3). Flory stressed that once the City issues the bonds, it steps out of the process and the payments made by the borrower under the local agreement are made directly to the purchasers. The City will have no ongoing involvement in the process. Under Iowa law, conduit bonds are not a debt to the City and no City funds or tax dollars are used to pay for the conduit bonds.
The tax exempt bonds will help One Vision with the remodeling, construction, site work, utility work and other work in constructing a 48-unit senior-focused independent living apartment complex as part of their repurposing of their campus.
“This merely allows One Vision to get to a tax-exempt bond market,” explained Flory, adding that cites and counties are often used by non-profits to obtain federally tax-exempt financing. Since the interest on the bonds is exempt from federal income taxes, the borrower is able to borrow at lower interest rates than would be available with a conventional taxable loan.
Clear Lake Mayor Nelson Crabb told those at the meeting that One Vision leaders have kept the City updated and informed about the project.
“There are a lot of reasons as to why we value this relationship and why we would do it,” said Crabb.
One Vision is Clear Lake’s largest employer and the TimberCrest project is likely the second largest building permit in the community, be