Opinion ID: 1965352
Heading Depth: 2
Heading Rank: 1

Heading: Sergeant Bluff-Luton Sch. Dist. I.

Text: In 1987, the defendant city council [1] of Sioux City established the Donner Park Urban Renewal Project, pursuant to Iowa Code chapter 403 (1993). [2] On December 19, 1994, the city council approved Amendment No. 5 for the Donner Park Urban Renewal Project and tax increment district. Amendment No. 5 added three tracts of land to the Donner Park Urban Renewal Project. One of the tracts of land added to the renewal project was a residential real estate development known as the Virginia Meadows Addition. Before adopting Amendment No. 5, the city made no finding that the Virginia Meadows Addition constitutes a slum area or blighted area, see Iowa Code section 403.4(1) (no municipality shall exercise authority under urban renewal law until its local governing body has adopted a resolution finding that one or more slum, blighted or economic development areas exist in the municipality), but did state that the purpose of including Virginia Meadows in the Donner Park Urban Renewal Project was for economic development. Sergeant Bluff-Luton is a consolidated school district mainly comprised of two small towns southeast of Sioux City and is responsible for the education of children who currently and in the future will reside in Virginia Meadows. Due to Virginia Meadows' inclusion in the city's urban renewal project, the city, pursuant to Iowa Code section 403.19 (division of revenue from taxationtax-increment financing), receives property tax revenue, calculated on the value of the improved property, generated from Virginia Meadows for a period of several years. Sergeant Bluff-Luton Sch. Dist. I, 562 N.W.2d at 155. The city intends to use the tax revenue generated from Virginia Meadows for tax increment financing (TIF) and issuance of bonds to pay for economic development of urban renewal areas. Id.; see also Iowa Code §§ 403.9, 403.19(1), (2); Richards v. City of Muscatine, 237 N.W.2d 48, 58 (Iowa 1975) (discussing tax increment financing under Iowa Code § 403.19). The school district, on the other hand, will receive less tax revenue than if the Virginia Meadows Addition was not included in the urban renewal project. Sergeant Bluff-Luton Sch. Dist. I, 562 N.W.2d at 155. This is because on urban renewal or TIF realty, the school district must calculate its tax levies based on the assessed value of the property as undeveloped, whereas the city is entitled to levy taxes on the valuation of the property as improved. On February 10, 1995, the school district filed in district court a petition for injunctive relief, seeking to prevent the city council from assessing taxes based on inclusion of Virginia Meadows in the Donner Park Urban Renewal Project. The district court denied the school district's request for injunctive relief based on its conclusion that injunctive relief was not appropriate. Id. at 156. The school district appealed that decision.