HomeMy WebLinkAbout04-17-2013 Council Economic Development Committee2@49@9
AGENDA
City Council Economic Development Committee
Wednesday, April 17, 2013
8:00 a.m.
Emma J. Harvat Hall
City Hall
1. Call to Order
2. Consider approval of minutes from February 12, 2013 Economic
Development Committee meeting
3. Presentation by MidWestOne Bank on development plans
a. Consider a recommendation on approval of Letter of Intent
4. Report on Building Change funding awards
5. Consider request for funding Iowa City Book Festival as new
program for City of Literature
6. Staff time
7. Committee time
8. Other business
9. Adjournment
MINUTES PRELIMINARY
CITY COUNCIL ECONOMIC DEVELOPMENT COMMITTEE
FEBRUARY 12, 2013
HELLING CONFERENCE ROOM, 8:00 A.M.
Members Present: Matt Hayek, Susan Mims, Michelle Payne
Staff Present. Wendy Ford, Tracy Hightshoe, Geoff Fruin, Sara Greenwood
Hektoen, Steve Long, Tom Markus
Others Present: Nancy Bird
RECOMMENDATIONS TO COUNCIL: (none)
CALL MEETING TO ORDER:
The meeting was called to order by Chairperson Mims at 8:02 A.M.
WELCOME AND INTRODUCTIONS:
Chairperson Mims welcomed everyone and asked that those present introduce
themselves.
CONSIDER APPROVAL OF MINUTES:
Chairperson Mims asked if there were any comments, changes, etc., to the minutes.
Payne moved to approve minutes from the December 18, 2012, meeting as
submitted.
Hayek seconded the motion.
Motion carried 3-0.
REPORT ON BUILDING CHANGE INCENTIVE FUNDS FOR PROJECTS IN
DESIGNATED AREAS:
Wendy Ford addressed members. She noted the Building Change Downtown Incentive
idea came about after several discussions regarding the need for providing some
assistance and encouragement to upgrade some of the 'building stock' in downtown
Iowa City. She stated that they looked at various models across the country, and
tailored a plan to fit downtown Iowa City.
Funds that can be used for the program can be from one of several sources: CDBG
funds, the Economic Development opportunity funds, partial commercial property tax
exemption, which is a sliding exemption on the increase in property taxes due to
improvements, or TIF funds in certain situations.
Steve Long says word about the program is already getting out, and that he and other
staff are already receiving calls about the program. Tracy Hightshoe noted that the full
Council will have an item about the use of CDBG funds for fagade improvements at their
EDC February 12, 2013
meeting on February 19. Hayek asked what the match for private to public funds would
be. Hightshoe explained the program would match 40% of total fagade costs, up to
$50,000 maximum. Members agreed this is a good incentive which should encourage
some new investment in downtown buildings.
STAFF TIME:
Long noted staff is working with an advanced real estate course at the University where
they are doing a study on the Towncrest neighborhood this semester. He shared that
the class will be doing some market research for them during this study with a goal of
finding the best mix of retail/commercial and residential.
Markus noted Mims and Jeff Davidson will be in Ames today for the RISE grant.
COMMITTEE TIME:
Hayek noted that he is meeting with other local Mayors today and they will be talking
about a corridor non -compete contract.
OTHER BUSINESS:
None.
ADJOURNMENT:
Hayek moved to adjourn the meeting at 8:14 A.M.
Payne seconded the motion.
Motion carried 3-0.
LDC I ebiuory 12, 2013
Council Economic Development Committee
ATTENDANCE RECORD
2013
TERM
o
NAME
EXP,
N`
N
�
Michelle
01/02/14
X
Payne
Matt
01/02/14
X
Hayek
Susan
01/02/14
X
Mims
Key:
X = Present
O - Absent
O/E = Absent/Excused
CITY OF IOWA CITY
MEMORANDUM
Date: April 15, 2013
To: City Council Economic Development Committee
From: Jeff Davidson, Director; Department of Planning and Community Development
Re: Agenda item # 3: Presentation of MidWestOne Bank development concept plan
At the April 17 EDC meeting representatives of MidWestOne Bank and Neumann Monson Architects will
present a redevelopment concept for the bank's facilities in downtown Iowa City and Riverfront
Crossings. The concept includes the rehabilitation of the bank's historic downtown building, as well as a
new tower building in Riverfront Crossings. The concept also includes a new multi -use parking facility in
Riverfront Crossings which would enable the construction of the new office tower and provide a catalyst
for addition development in the area, including an exciting workforce housing building. What is
envisioned is a partnership between the bank, the City, and a private developer who would execute the
construction projects.
A draft Letter of Intent (LOI) which is attached has been prepared between the City, the bank, and the
University. It will be on your 4/17 agenda for a recommendation to the full City Council. This document
does not bind any of the parties to any particular action, but sets forth our mutual intent for moving
forward.
We are delighted at the prospect of a major regional bank making a long term commitment to downtown
Iowa City for its headquarters. As we would with any major employer downtown, the City will have a role
in providing parking. The ultimate structure of any partnership the City would enter into will be
determined by the City Council. We are excited about the growth and development opportunities.
Cc: f-om Markus, Wendy Ford
Letter of Intent Regarding Development of 509 S. Dubuque Street
MidWestOne Bank (hereinafter "Bank'), the City of Iowa City (hereinafter "City"), and The
University of Iowa (hereinafter "University") seek to set forth their intentions regarding the
future development of a certain tract of real property in Iowa City bordered by Clinton, Harrison
and Dubuque Streets on which now sits the former Sabin School building and its associated
surface parking lot and has the address of 509 S. Dubuque Street (hereinafter "Sabin Property"),
BACKGROUND
As part of the sale of Bank's real estate at 325 S. Clinton Street to University in June 2012, Bank
and University entered into a Real Estate Option agreement relating to the Sabin Property. The
terms of the Option permit Bank to acquire all or part of the Sabin Property if Bank exercises the
Option, one or more times, prior to February 3, 2015. In June, 2012 Bank notified University of
its intent to exercise its purchase option on a part of the Sabin Property, namely the surface
parking lot portion of the parcel located west of the public alley. Bank and University closed on
that transaction in September 2012. A further term of the Bank and University's Real Estate
Option Is the requirement (unless otherwise agreed to by the parties) that University deliver the
Sabin Property to Bank with all buildings and structures razed. In order for University to raze the
former Sabin School building ("Sabin Building"), University, the Federal Emergency Management
Agency (FEMA) and other interested parties must enter into a formal Memorandum of
Agreement regarding the mitigation of any adverse historical/environmental effects in razing
the Sabin Building.
Also as part of the sale of the Bank's real estate at 325 S. Clinton Street to University in June
2012, Bank and University entered into a lease agreement whereby Bank would lease and
occupy the first floor of the former Sabin Building for its home loan center for a terrn not to
exceed three years. The Bank is currently occupying the first floor rental premises in the Sabin
Building.
Bank has notified the City and University that: 1) it intends on exercising its remaining real
estate option with University to acquire the remaining Sabin Property; 2) it intends on
constructing a multiple story office building on the northwest lot of the Sabin Property (already
acquired portion) on which there is now a surface parking lot; 3) that upon completion of the
new office building Bank intends on relocating its employees and operations from the first floor
of the Sabin Building into the new office building; 4) that upon relocating out of the Sabin
Building and into the new office building Bank will wish to provide parking for the convenience
of its employees and customers and to be in compliance with any applicable City building and
occupancy code parking requirements; and 5) that upon opening its new oftice building and
vacating the Sabin Building, Bank is relying upon the University fulfilling its obligation (pursuant
to the terms set forth in Bank's Real Estate Option Agreement with University) to raze the
former Sabin Building and use the cleared land for employee and customer parking.
0 ON
Bank has approached City to discuss the feasibility of developing the remaining Sabin Property
for a City owned and operated parking ramp and privately owned residential townhomes. City
believes structured parking at this site may be a desirable land use alternative to surface
parking and that further consideration of such a development concept is in the best interest of
the City..
It is anticipated that a third party Developer will design and construct both the Bank's office
building on the northwest lot of the Sabin Property and the parking ramp and townhouses on
the site of the Sabin Building; that the parking ramp/townhome structure will be submitted to a
multi -use horizontal property regime ( condominiums) pursuant to chapter 499B of the Iowa
Code; and that the City will lease/purchase the condominium unit consisting of the parking
ramp from the Developer in accordance with Section 364.4 of the Iowa Code
PLAN
T he parties express their intent to diligently and cooperatively pursue the following course of
action in furtherance of the proposed development, understanding that no binding
Cornrnitments can be made until the parties have followed the necessary procedures required
by law and the rules that govern each of them and the transactions contemplated are formally
approved by their respective governing Board or Council.
A. Presentation of design concept and Letter of Intent to City's Economic Development
Committee (EDC). Bank shall present the design concept. It is anticipated that the EDC will
make a recommendation to Council re: the Letter of Intent. GOAL FOR COMPLETION: April
17, 2013
B. Formal Approval of Letter of Intent by Parties. GOAL FOR COMPLETION: May 15, 2013
C. Analysis of Financial Feasibility of City Owned Parking Structure and Gap Analysis of any
Developer Requests for TIF funding. The City has not yet engaged in the financial analysis
necessary to determine the feasibility of a parking structure at this location. The feasibility
is, in part, dependent on the financial terms to be negotiated for the lease/purchase of the
parking ramp as well as TIF incentives, if any, that may be granted to the Developer. The
parties understand that the Bank is not seeking TIF incentives for the portions of the
development that it will own and occupy, but that the Developer may seek TIE incentives for
the residential component and/or Class A office space component of the project. GOAL
FOR SUBMISSION OF TIF REQUESTS TO CITY STAFF: GOAL
FOR PRESENTATION TO
D. Preliminary Design, GOAL FOR PRELIMINARY PLANS AND SPECS: .__
E. Negotiation of agreement between Bank and City of the terms of Bank's use of a portion of
the parking facilities. GOAL FOR COMPLETION:
F. Negotiation of agreements for construction of the Bank's office building between Bank and
Developer. GOAL FOR BANK AND DEVELOPER APPROVAL:
G. Final Design and Cost Estimates, GOAL FOR FINAL PLANS AND SP
N. Negotiation of Agreement for Construction and Lease/Purchase of the parking ramp
between City and Developer . This Agreement, if approved by the City Council, is not a
contract for a public improvement subject to the public bidding requirements of Chapter 26
of the Iowa Code with the exception of the public hearing requirements of the plans,
specifications and estimated cost set forth at Section 26.12. The City Council must follow
the authorization procedures for issuance of bonds in order to approve the agreement.
GOAL FOR CITY COUNCIL AND DEVELOPER APPROVAL:
J. Amendment of Urban Renewal Plan, TIE ordinance and Execution of Development
Agreement (in the event TIE incentives are approved). Completion of these tasks should
coincide with final approval of the construction and lease/purchase agreement.
K. Memorandum of Agreement between University and FEMA regarding mitigation of any
adverse historical/environmental effects in razing the Sabin Building. GOAL FOR
COMPLETION: December 1, 2013
L. Execution of Option by Bank to purchase (or to have its assignee purchase) the remainder of
Sabin Property. GOAL: (Before February 1, 2015)
M. Demolition of Sabin Building Commences. GOAL:
It is understood that this Letter of Intent (i) contains a general statement of mutual intentions
with respect to determining the feasibility of and negotiating the conditions for proceeding with
the proposed transactions; (ii) does not constitute or give rise to any obligation binding on any
party based on any legal or equitable theory (including any right or obligation to continue
negotiations); (iii) does not contain all matters upon which agreements must be reached in
order for the contemplated transactions to be consummated; and (iv) creates no right in favor
of any party. Any binding commitments with respect to the proposed transactions will occur
only after proper approvals have been obtained and definitive agreements have been executed.
This Letter of Intent is not all inclusive and contains only general parameters of possible
transactions. It does not constitute an offer, an acceptance, and is not intended to be binding
on or enforceable against any party. Nothing in this Letter of Intent is intended as, nor should it
be construed as, a waiver, release or modification of any party's rights or obligations under any
existing agreements, or as a wavier of any party's rights to proceed with alternative plans or
projects unless and until definitive agreements are entered into providing otherwise.
MidWestOne Bank
Charles N. Funk Date
President & CEO, MidWestOne Bank
City of Iowa City
Mayor, City of Iowa City Date
City Clerk, City of Iowa City Date
University of Iowa
David Kieft Date
Business Manager, University of Iowa
<ti<'N;pq �r%
CITYO F II O WACITY
nEMO\ANDLIV
To: City Council Economic Development Committee
From: Wendy Ford, Economic Development Coordinator
Date: April 12, 2013
Re: EDC Agenda item #3: Report on Building Change Fagade and Building
Improvement funding
The idea for creating an incentive program for Downtown and the North Side Marketplace came
about after several discussions regarding the need for assistance and encouragement to
upgrade some of the buildings within the central business district of Iowa City. The program
was named the "Building Change" program and would provide matching grants available for
three types of building improvements:
1. Fagade renovation,
2. Fire suppression sprinklers, and
3. Improvements that would enablelimprove the ability to lease underused space.
The public benefits of the program Include:
1. Improved fire safety.
2. Increased property values due to increased ability for income generation from the
property. (We had targeted underutilized second floor properties as recipients of these
funds.)
3. Better aesthetics to improve the look of the downtown area and thus property values.
Increased property values result in increased tax base.
In February, staff promoted the program by:
1. Mailing all property owners and businesses within the area
2. Publicizing via email sent to Chamber membership
3. Publicizing via Iowa City Downtown District newsletter, and
4. Distributing a news media release to local print and radio.
Staff received 16 proposals by the March 6 deadline, for a total of more than $1.3 million in
improvements to downtown buildings. A committee of staff from Economic Development,
Community Development, Urban Planning and Housing & Inspection Services reviewed the
applications and determined that eight proposals were eligible and could be funded in this first
round. Reasons for those not funded included properties being outside the program boundaries,
projects requiring additional fundraising to proceed, or scoring lower than others in total impact.
Funding for the grants comes from either the Economic Development Opportunity fund or the
CDBG Economic Development funds, depending on the project. The table below shows the
projects and the funding source used.
Building
Pro - ject type
Total
Grant
Fund
project cost
30 S. Clinton St.
--
Buildout of 2°d and 31d floor
(former Gilda's Imports
apartments, sprinklers, fapade
storefront)
renovation
$621,750
$37, 729
ED fund
April 12, 2013
Page 2
Building
Project type
Total
Grant
Fund
project cost
118 E. Washington St.
Bo James
Fa ade renovation
$100,000
$40,000
CDBG
127 Iowa Ave.
Atlas Restaurant
Fa ade renovation
$119,260
47;704
CDBG
215 E. Washington St.
Quinton's storefront
Fa ade renovation
$69,332
$27,733
CDBG_
32 S. Clinton St.
Fapade renovation on Washington
Panchero's buildings
St. side of building
$66,190
$19,857
ED fund
218 E. Washington St.
Chait Galler buildin
Fa ade renovation: windows_
$48,698
$8,028
ED fund _
138 S. Clinton St.
(Active Endeavors
Fagade renovation: window
building)
eplacement
$47,000
$16,000
CDBG
13 S. Linn St.
To be
Yacht Club building)
Fire suppression, fa ade renovation
$65,100
determined
I ED fund
The City of Iowa City Strategic Plan adopted in January of 2012 includes a priority of
Development of Downtown and Near Downtown Areas with a specific goal of promoting growth
of the downtown in a manner that builds on the vibrancy of the region. The Building Change
program directly addresses this priority.
Spending authority is granted to the City Manager from the economic development opportunity
fund (account number 1000-457100-448070 for up to $50,000 per expenditure by resolution 11-
180) for uses that align directly adopted Strategic Plan priorities. The projects approved with
CDBG funds have all already been allocated to this use under the FY13 Annual Action Plan
Amendment #1 approved by the City Council. Use of both of these funds requires a report at the
first Economic Development Committee meeting following such disbursement. This memo
serves to fulfill that purpose.
I would note that there are several additional building owners who have since inquired whether
the Building Change program will be open again for applications. We know there is interest and
feel that if funds could be made available in FY14, we might be able to effect additional
investment in our central business district buildings and ultimately create much needed
additional office space for small businesses seeking to locate downtown. We will need to
determine if there will be a FY14 round for the program.
CITY OF IIOWA CITY
RA1��rr�1 U M
To: City Council Economic Development Committee
From: Wendy Ford, Economic Development Coordinator "
Date: April 12, 2013
Re: EDC Agenda item #4: City of Literature Funding additional and annual funding request
The UNESCO City of Literature (Col-) has adopted the Iowa City Book Festival, an event that was originally
conceived and operated by the University of Iowa Libraries. The UI Libraries presented the inaugural and subsequent
3 festivals in July of 2009, 2010, 2011 and 2012. The Iowa City Book Festival brings together nationally prominent
authors, book vendors and the public for three days of events throughout downtown Iowa City locations. Last years'
event drew between two and three thousand people in the middle of the summer. This year's event is sure to draw
even more people because it will take place on a bye football weekend in October, thereby allowing for the
involvement of the University of Iowa's writing community as well as the community at large.
Staffing and leadership changes at the UI Libraries led to the Library's decision that they would no longer produce the
festival after 2012. The CoL Board of Directors agreed that the event, so aligned with the City of Literature, should
continue under their operation. While the CoL had been involved in planning earlier festivals, CoL staff stepped in to
learn the ropes and assume the production of the festival going forward.
As you know, Iowa City has supported the City of Literature with $50,000 in operations funding (as have other
funders, including the University, the City of Coralville and North Liberty) since FY 2010. That, in effect, supports
administration of the festival. They are seeking additional City funding to cover Iowa City Book Festival programming.
The Iowa City Book Festival budget, while it was operated by the UI Libraries, was a little under $40,000 per year and
consisted of funding from sources shown in the middle column, including $1,000 from the City of Iowa City. The UI
Libraries always made up the difference between funds raised and expenses incurred, but will only be contributing in
kind assistance this year. Proposed CoL Book Festival funding is shown right hand column, which requires that CoL
raise additional funds if it seeks to maintain or increase programming levels established by the UI Libraries.
UI Libraries
Proposed City of Literature
Book Fest Funding
Book Fest Funding
2012
2013
City of Iowa City
$1000
10,ow
Humanities Iowa
7,500
7,500"
Johnson County Foundation
1,000
1,000-
UI President's office
5,000
10,ow
ICPL
2,500—
CVB
2,500""
Other private sponsorships under development
?
Earned income
8,375
?
UI Main Library Foundation
iL360
in kind assistance
$37,505
$33,500
proposed/to be requested
requested, tentatively approved
Staff recommends providing CoL the additional $10,000 in funding for the 2013 Book Festival and budgeting an
additional $10,000 per year to the annual funding of $50,000 for $60,000 total in FY15, 16 and 17. The source of
funds for the 2013 and Book Festival is Economic Development Opportunity funds, 1000-457100-448070, and the
ongoing CoL operations funding are from the Community Development Assistance funds, 1000-457100-448020.
April 8, 2013
To the City Council Economic Development Committee:
The Iowa City UNESCO City of Literature organization would like to request that
the City of Iowa City provide $10,000 in funding for the 2013 Iowa City Book
Festival, to be held Oct. 11-13.
The festival, now in its fifth year, moves from the University of Iowa Main Library
to the City of Literature organization this year. With the change in presenting
organization and date come others. Instructors and students with the world-renowned
University of Iowa Writers' Workshop have been invited to participate, as have the
more than 25 international writers participating in the University's International
Writing Program. The Filrul independent film theatre, Little Village magazine,
and the Mission Creek Music Festival also will offer programming, offering these.
organizations to increase their visibility during the event.
'Phis programming, along with a selection of nationally prominent authors, will
provide an exciting and enlightening weekend of events that put literature of all
]rinds in the spotlight.
The festival has drawn between 2,000 and 3,000 people in each of its first four years,
and with a move from the summer to the fall — which makes it more accessible to the
student, staff and faculty population of Iowa City— we expect to draw considerably
more in 2013,
'these people will be coming to the heart of Iowa City, with the majority of events
over the weekend planned for downtown. Facilities like the Englert'Fheatre and the
Iowa City Public Library will be used for Friday and Saturday programming, while
several downtown businesses will host events on Sunday.
In addition to our organization's own funds and those sought by the city, we expect
to receive funding from the University of Iowa, and will seek other sources that have
funded the festival in past years. In addition, we are actively seeking sponsorships
from Iowa City businesses and organizations to round out our budget. Every dollar
brought in will go toward programming, allowing us to leverage, public dollars to
raise private funding to create an active, lively festival that will bring people to town
and provide education and entertainment for residents.
I look forward to the opportunity to speak more with you about this request and to
answer any questions you may have about the festival.
Thank you for your consideration,
John Kenyon
Executive Director
IOWA CITY
UNESCO
CITY -OF
LITERATURE
President
Joshua Schamberger
Vice President
Carolyn Brown
Treasurer
Rod Sullivan
At Large
Sally Mason
Board
Susan Craig
Lori Erickson
Hugh Ferrer
Wendy Ford
Tom Gelman
Kelly Hayworth
Ryan Helar
Robin Hemley
Della Ray Howard
Eileen Johnson
Rebecca Neades
Andre Perry
Tim Terry
James Throgmorton
Nancy Willis
Iowa City UNESCO City of
Literature
123 S. Linn Street
Iowa City, IA 52240
319-356-5245
info@cityofliteratureusa.org
www.City0flitefatureusd.org