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10-13-2014 Council Economic Development Committee
AGENDA City Council Economic Development Committee Monday, October 13, 2014 8:00 a.m. Emma Harvat Hall City Hall 1. Call to Order 2. Consider approval of minutes from the July 14, 2014 Economic Development Committee meeting 3. Consider a recommendation to City Council for a request for financial assistance for EMRICO, LLC, a Riverside Drive Urban Renewal Area project 4. Consider a recommendation to City Council for financial assistance for Iowa City Marketplace, a Sycamore and First Avenue Urban Renewal Area project 5. Consider a request for continuing financial support of the Englert Theatre 6. Consider a request for continuing financial support of Mission Creek Festival 7. Consider a recommendation for Towncrest incentives at 2500 Muscatine Avenue 8. Staff updates 9. Committee time 10. Other business 11. Adjournment EDC July 14, 2014, p. 1 PRELIMINARY MINUTES CITY COUNCIL ECONOMIC DEVELOPMENT COMMITTEE JULY 14, 2014 EMMA HARVAT HALL, CITY HALL, 8:00 A.M. Members Present: Susan Mims, Michelle Payne, Matt Hayek Staff Present: Wendy Ford, Jeff Davidson, Tom Markus, Eleanor Dilkes, Dennis Bockenstedt, John Yapp, Geoff Fruin Others Present: Marc Moen (Moen Group); Steve Rohrbach (Rohrbach Associates); James Phelps (Rohrbach Associates); Tom Jackson (National Development Council); Mark Nolte (]CAD) RECOMMENDATIONS TO COUNCIL: Payne moved to recommend the financial assistance request for The Chauncey to the full City Council. Hayek seconded the motion. Motion carried 3-0. Payne moved to accept staffs recommendation to deny financial support for Entrepreneurial Development Center, Cedar Rapids. Hayek seconded the motion. Motion carried 3-0. CALL MEETING TO ORDER: The meeting was called to order by Chairperson Mims at 8:04 A.M. CONSIDER APPROVAL OF FEBRUARY 10, 2014 MEETING MINUTES: Payne moved to approve the minutes as presented. Hayek seconded the motion. Motion carried 3-0. CONSIDER APPROVAL OF APRIL 1. 2014 MEETING MINUTES: Payne moved to approve the minutes as presented. Hayek seconded the motion. Motion carried 3-0. CONSIDER APPROVAL OF FINANCIAL ASSISTANCE FOR THE CHAUNCEY: Jeff Davidson addressed Members regarding a request for financial assistance for The Chauncey. He gave a brief history of the project to date, and explained that the project is ready to move forward. One of the first things to enable Council consideration of City financial assistance in the project is to amend the downtown Urban Renewal Plan to include it. Davidson explained that process will begin at the Council meeting on July 15 with a Resolution of Necessity for the City -University Project 1 Urban Renewal Area, Amendment #12. Davidson described the project and a financial structure that has been negotiated between City staff and the developer of The Chauncey, which, if approved by Council, would be memorialized in a Development Agreement. He stated since the earlier stages of the project, there has been one significant change — a reduction in height from 20 EDC July 14, 2014, p. 2 PRELIMINARY stories to 15 stories. Davidson spoke further about the zoning change needed — from P (Public) and CB-5 for the MidAmerican property, to CB-10 (Central Business District). Davidson noted that parking for the residential part of the project will be provided in a subterranean parking area. Davidson noted that the project will displace the Bike Library, which has been known since the project was initiated. He stated that the hope is to create a retail -like area in the ground level that can accommodate it. Davidson then discussed TIF (tax increment financing) and how a project requesting TIF is evaluated. He stated that the main guides for staff are the Council's Strategic Plan and the Economic Development (ED) policies. Projects undergoing financial gap analysis must be aligned with Council's Strategic Planning Priorities and with the Economic Development policies. Noting elements of the ED policies, Davidson cited the requirement for high quality architectural and site design and that Rohrbach and Associates PC, a local firm, has designed The Chauncey project -- and brought a model for display at the meeting. Another element of the ED policies is that energy efficiency and sustainability features must be included. The developer has noted that the building will be built to LEED Silver standards. As part of the financial analysis, Davidson noted that the developer will be purchasing the property from the City along with the subterranean rights for a geothermal field to be installed under Chauncey Swan Park. Davidson explained the financial gap of $14.2 million includes $12.1 million for the building plus $2.1 million for the property and the subterranean rights for the geothermal system. He explained $14.2 million is the financial gap in the whole project, but because the Developer will pay $2.1 million to the City for the property and subterranean rights, those funds will be used to reduce the amount of TIF needed to $12.1 million. Davidson reiterated some of the goals of the project — affordable housing, the Iowa City Public Housing Program will purchase five units; creation and retention of high -quality jobs, with almost 39,000 square feet of Class A office space, there will be the potential for quality employment opportunities; developer equity equal to or greater than the public financing requested, Davidson noted that this can be seen in the report from Mr, Jackson, as can the breakout of the remaining financing of the project; redevelopment of underutilized or blighted property— Davidson stated that staff supports the designation of this parcel as blighted and in need of redevelopment; and also, projects should achieve public purposes, as detailed in the Comprehensive Plan, Urban ,Renewal Area planning documents, andlor City Council Strategic Plan — Staff does believe that all three of these are accomplished by this project. Davidson then focused on the Chauncey Swan Park, stating that the park will be enhanced at the completion of the project. Its improvement will benefit the entire community, and special care is planned to spare the Farmers Market from as much disruption as possible during construction. The developer has indicated that he is committed to spending up to $500,000 for the reconstruction of Chauncey Swan Park as part of the project. Summarizing, Davidson noted that staff is seeking a recommendation for the financial assistance structure presented. This arrangement would then be incorporated into a formal Development Agreement that will come to the full City Council for approval. The current estimate is that this will be a $49 million project — a 15-story mixed -use building, EDC July 14, 2014, p. 3 PRELIMINARY including movie theaters, a bowling alley, lobby/gallery space, Class A office space, a 35-room hotel, and eight floors of condominiums and apartments. Davidson then responded to questions from Members. Hayek asked what the anticipated payback period would be for this TiF request. Davidson referred the question to the Finance Director Bockenstedt who noted that they continue to refine the numbers and right now are looking at a 20 to 25 year period. Davidson further explained the significance of the potential TIF increment on a parcel that has not generated property taxes in decades. Payne asked if the $2.1 million is for the sale of the property, plus the subterranean rights, which Davidson affirmed. Payne also asked about fire protection, and whether the Fire Department has trucks that can reach 15 stories. Davidson noted that there are special fire code requirements for buildings of this height, and he asked if Moen or Rohrbach could respond. Both responded, noting that in high- rises, the stair towers are pressurized to keep smoke out, thereby allowing firefighters to attack fires on higher floors as needed, without being inundated with smoke. There are also communication systems throughout the building and stair towers to aid in such situations, as well as stringent codes for sprinkler systems. Davidson asked if Members would like any further information. Payne asked if the $500,000 for Chauncey Swan Park's reconstruction is part of the $49 million. Moen confirmed that it was. Hayek asked if they could get further information regarding the gap analysis. Davidson then asked Tom Jackson from the National Development Council to join them at the table so that he could further discuss his report. He noted that NDC's philosophy in assisting cities for almost 45 years, is to ensure there is no undue enrichment of the developer if the City is to be a financial partner. Their analysis uses projections that are supported by the market study the development team was required to procure. NDC agrees with these projections in terms of rents for the residential units and rents for the other areas of the building. An 'as complete' appraisal will confirm the capitalization rate, an important part of the evaluation. NDC can substantiate a $14.2 million gap. Two key contributors to the gap are the uses in the commercial portion of the project that Council had favored — the film theaters and the bowling alley. Jackson continued, noting that in modeling this gap analysis as with other projects, such as Park at 201, they treated the project almost exclusively as a 'rental' project, while recognizing that Moen and his team are also going to offer units for sale. This has the effect of keeping the gap smaller than if 'for sale' units were factored into the model. Jackson noted a level of comfort with the analysis of this project and this developer, given the developer's experience. As the design process moves forward and bidding takes place, numbers will be refined, according to Jackson, but in terms of what they know at this time, NDC believes the developer has demonstrated a need for gap financing assistance in the amount shown in the report. Mims asked what the timeframe is on building and occupancy. Moen stated that completion of the residential component is hoped to be two years after commencement. Mims asked how far out that might be. Moen responded that they hope to begin the project in 2015, with the residential section done in two years and commercial completed in two and a half years. Mims then asked about the affordable housing piece of the project, and whether it will be part of the agreement. Moen responded that it will be. She then asked if this should be written more as a Right of First Refusal, with the parameters as they currently are. Mims further explained, noting that they are beginning to see development in the Riverfront Crossings area, also with affordable housing possibilities. She questioned if they shouldn't require EDC July 14, 2014, p. 4 PRELIMINARY affordable housing units on more of a contingency basis. Davidson noted that there are several other projects in the works where they are also considering affordable housing components, helping to scatter these units throughout the community so they are not concentrated in just one area. Hayek stated that he would like Jackson to explain what NDC does, its relationship with the City, how long the relationship has been in place, and to put some context to this arrangement, as far as services the City has received. Jackson responded, noting that the City first contracted with NDC after staff became familiar with NDC's finance certification courses about three and a half years ago. The scope of services that NDC is contracted to provide include analyzing the debt capacity and equity attraction of proposals that are presented for development assistance. This analysis helps to determine If sources of private debt and equity have been maximized before public debt is considered and whether the developer's equity and equity of other investors is enough. NDC then looks at the rationality of developments costs, pulling all of this information together to see if the total costs, less the available debt and equity, leave a financing gap that is reasonable for the City to consider in order to reach stated community goals. NDC is performing these services in 100 other communities across the country, according to Jackson. Jackson noted that NDC's is a quantitative analysis including a focused look at the financial character of the developer's request. The goal is to determine whether or not it's a reasonable request. The qualitative or policy considerations, such as influencing the mix of uses, provision of affordable housing, additional market -rate housing, office space, etc., are left to the City to make. Davidson noted that the City has an annual contract with NDC for services at roughly $6,000 a month. Davidson added that Jackson or another representative of NDC is on -site three days a month, per the contract, and are available to us by phone and email 7 days a week. Mims asked if the developer, Marc Moen, had anything to add. He reiterated that this is a partnership and spoke highly of being able to work with the City staff to come up with the best possible project for this space. He added that when going from 20 to 15 stories, they tried to keep all of the good qualities that made this project special from the beginning. Moen talked about Film Scene and how the collaboration with them began at the Vito's building. He stated that they have been doing well and he believes will continue to be a benefit to the downtown. Hayek and Payne both spoke highly of the project and what has been laid out as the blueprint for moving forward. Mims agreed, stating that there has been a lot of discussion about the use of TIF, but that Iowa City's use has always been in a very responsible manner. She added that the long payback isn't ideal, but that the benefit of this project to the public will be worth it. Mims also spoke highly of NDC's recommendations in this process, and how this helps assure her that the decisions they are making at the Council level are sound ones. Hayek stated that he will support this. He spoke highly of the City's financial standing and its history of TIF use in the area of economic development. He noted that they could take a passive approach to development in the downtown area, but that this would not produce the results they are seeking as they look at their Strategic Plan goals and objectives. This type of development partnership is an opportunity to set the bar and to continue what has been a string of impressive projects for the City. The character of this project, hits upon several of the City's objectives — office space, community space, environmental leadership, density, and affordable housing, he said. EDC July 14, 2014, p. 5 PRELIMINARY Payne moved to recommend the financial assistance request for The Chauncey to the full City Council. Hayek seconded the motion. Motion carried 3-0. Ford noted that Members have a memo in their packet regarding this request from the Entrepreneurial Development Center. This is an organization that has been around for several years now, helping startups in the Corridor. This is their third request for funding from the City. Ford stated in 2007 they requested $15,000. The Economic Development Committee at that time decided to defer a decision on that request due to the new relationship EDC had begun with ICAD, an organization the City funds. At that time, committee members were unsure of how much involvement EDC would have with the southern portion of the Corridor. in 2009, the group requested $20,000 annually, and the City again deferred this request due to budgetary concerns and a lack of detailed information. This March, the group approached the City Manager's office with a request for $25,000 for the remainder of this calendar year, and then $50,000 per year for the next five years. She stated that staff still has the same concerns, one — that the City funds are even more limited now, and two, that staff is not clear on the actual number of businesses in Iowa City that have received assistance from EDC. Ford stated that staff would require more detail about the finances of the group and does not have enough information to recommend the request for funds. Hayek asked if staff had requested further information in the past to no avail. Ford confirmed. Mims added that she is comfortable with staffs recommendation to not grant this request. Other Members agreed. Payne moved to accept staffs recommendation to deny financial support for Entrepreneurial Development Center, Cedar Rapids. Hayek seconded the motion. Motion carried 3-0. UPDATE FROM IOWA CITY AREA DEVELOPMENT GROUP: Mark Nolte, ICAD president, addressed Members, quickly reviewing ICAD's accomplishments over the past five years. To date, they have worked on 21 projects, which have created 877 new jobs that are at or above the county average. Continuing, Nolte stated that technology is on the forefront. He talked about some of the growing industries, such as wind energy, and natural and organic products. Medical biotech is another strong industry in this area. Technology in the vehicle industry is thought to be one of the next big changes, according to Nolte, and ICAD is working with leaders around the state and nation to position itself for such changes. Nolte stated that they have drafted a proclamation that the City Attorney's office is reviewing. It says that Iowa City is open for these companies and industries are welcome to come here for the automotive automation industry. He noted they are working with the Chamber of Commerce, the Convention and Visitors Bureau, the Downtown District, and others to market the area as the place for automotive automation research and deveiopment. Nolte also noted the CoLab and its success. There are at least five other companies on a waiting list for space at the Col-ab. Members spoke briefly with Nolte about the success of ICAD and how they are critical in helping to bring EDC July 14, 2014. p. 6 PRELIMINARY the talent we need to this area, as well as to keeping the talent that comes out of the University. Hayek thanked ICAD and the Chamber for what they do, noting these updates are helpful to the Committee. STAFF UPDATES: Davidson noted that the University has received proposals for their Art Museum project. They have asked the City to collaborate with them in the evaluation and selection of a preferred developer for this project. This will take place in August or September of this year, according to Davidson. In regards to the old St. Pat's School site in Riverfront Crossings, the deadline for proposals for this site is 4:00 P.M. July 16. Davidson stated that included in the RFP was a request for space that the City would like for some of the business incubation/applied research opportunities that are coming out of the University, as well as businesses that are outgrowing the CoLab and need more space. Davidson noted that staff have travelled to the University of Illinois and Iowa State University to see research park facilities that are affiliated with the universities. Davidson talked next about the Harrison Townhouses and parking project, a partnership involving Midwest One Bank, stating that it will be coming to the Council soon, as is the hotel project planned for the Hieronymus Square property. Lastly, Davidson noted that the Sycamore Mall, or the Iowa City Market Place, as it is now known, will have an announcement soon on a new anchor tenant for the mall. He added that staff does anticipate the group will need some assistance from the City in enhancing the facilities, but specifics are as yet unknown. Ford shared that work continues with the real estate listing agency in marketing the industrial park. She also noted there will soon be an amendment to the Riverside Drive Urban Renewal Area on the Council's agenda. Hayek asked about what is happening in the Towncrest area. Davidson noted that there is interest in the property directly to the south of the two new buildings. He added that the streetscape project is done, and that staff hope to continue it in the area. Ford stated that there are a few tenants of this area that are exploring the possibility of a joint venture to build a new building, but that the project is still in the early stages of consideration. Davidson stated that staff continues to work with the Town and Campus Apartments owner. Hayek asked about the old Kerr McGee site at Muscatine and First. Davidson stated that one of the owners is not interested in selling, even though two others are. COMMITTEE TIME: None. OTHER BUSINESS: None, ADJOURNMENT: Payne moved to adjourn the meeting at 9:11 A.M. Hayek seconded the motion. Motion carried 3-0. EDC July 14, 2014, p. 7 PRELIMINARY Council Economic Development Committee ATTENDANCE RECORD 2013 - 2014 TERM NAME EXP. w o o W W W A A I A Michelle 01102/14 X X X X X X Payne Matt 01/02/14 X X X X X X Hayek Susan 01/02/14 X X X X X X Mims Key: X = Present O = Absent O/E = Absent/Excused r'�~® CITY OF IOWA CITY �'''r' MEMORANDUM To: Economic Development Committee From: Wendy Ford, Economic Development Coordinator Date: October 10, 2014 Re: Agenda item #3; Consider request for financial assistance for EMRICO properties Introduction Kevin Hanick, representing EMRICO Properties, LLC, is proposing a multi -family housing development on the former site of Hartwig Motors on Riverside Drive in the Riverside Drive Urban Renewal Area. Development costs for the project total $16.1 million, for which he is requesting TIF rebates of $1.8 million (11.2% of the development costs). The project would be a significant investment in a neighborhood that has struggled with declining property values and disinvestment in recent years. We'd like to introduce the project concept to you at this meeting, and with your approval, proceed to the City Council with a development agreement in the coming weeks. Background The proposed project consists of 96 rental housing units with a mix of studio, one- and two -bedroom apartments and 6 three -bedroom apartments. Twelve units will serve the workforce rental market and be under the management and compliance review of the Housing Fellowship. All of the units will be designed and marketed for young professionals and graduate students who desire proximity to the law and health science campuses and other locations on the west side of the river. Parking for 71 vehicles will be provided below ground in the building and 105 more spaces will be available behind the building. Sustainability features will include an array of rooftop photovoltaic solar collector panels to electricity for the building and recycling centers on each floor. The property is adjacent to two public infrastructure projects in the planning stages for which the developer has committed to dedicating right-of-way valued at approximately $100,000. The first is a pedestrian tunnel that will pass through the west embankment of the railroad bridge over Riverside Drive improving pedestrian and bicycle safety. The other is a streetscape improvement project along Riverside Drive which requires additional right-of-way for street trees and sidewalks, further separating the pedestrian and bicycle traffic from vehicular traffic in that block. The streetscape project will be an aesthetic improvement along one of the main entry ways to the community. As with all requests for TIF financing — rebate or up front — Tom Jackson, our analyst with the National Development Council has completed a review of the proposed project and substantiates a financial gap. Several components of the project contribute to the gap. It is a site that requires demolition of existing structures; rents are priced for residents who are not undergraduate students; the expense of building 71 underground parking spaces; higher architectural design features and the use of certain surface materials (brick, stone, corten, etc.) and the quality finishes designed to appeal to the young professional. NDC's report is attached. The Riverfront Crossings Master plan completed in 2012 specifically envisions the west side of Riverside Drive taking on a more pedestrian -friendly character, and transitioning to urban apartments and mixed - use development. Objectives in the area include capitalizing on Highway 6 access and riverfront proximity, improving pedestrian and bike circulation, and extending riverfront trails. Deveiopment in the area is to become more pedestrian, with improved access, including trails and views to the river, an improved streetscape and overall better aesthetic. Finally, the master plan envisions a variety of land uses in the area including multiple housing types including condo towers, apartment and townhouses; destination river view restaurants, small to mid -size commercial uses and hospitality businesses. October 10, 2014 Page 2 City Council Strategic Planning Priorities The Economic Development Policy updated in April, 2014 states the City Council Strategic Plan shall serves as a basis for economic development financial incentives. The EMRICO project aligns well with the City Council's stated goals of being more inclusive and sustainable, and it meets at least three of the City Council Strategic Planning Priorities: fostering healthy neighborhoods, creating a strong urban core and serving as a strategic economic development activity. Healthy Neighborhoods The proposed housing units are designed to appeal to a diverse range of young professionals and graduate students offering the types of amenities homeowners and permanent residents seek. For example, there will be a good-sized "back yard" with green space, plenty of on -site parking, sustainable features such as solar energy generation and recycling on site, and upscale architectural building materials and design. These details along with the easy walking distance to major employment centers and entertainment contribute to the physical and social health of the neighborhood and its residents. Creating a Strong Urban Core The project site is less than a mile from the center of downtown Iowa City and returns an underutilized former car lot into a hub of daily life for its residents. The addition of more than the required workforce housing -priced units will help to ensure residential options within the urban core and to provide these options with highly desirable, easy pedestrian access to work and entertainment destinations. Strategic Economic Development Activities This project would be a significant investment and neighborhood enhancement for the Riverside Drive and Miller Orchard neighborhood area. The complementary timing of this project with the City's streetscape improvements and pedestrian tunnel projects will further enhance the appeal and lure additional investment to the neighborhood. Economic Development Policy The 2014 Economic Development Policies begin with "it shalt be the policy of the City of Iowa City to use the City Council Strategic Plan as the basis for its economic development activities. Inherent in the plan is to attract new development including residential, commercial and industrial uses to grow the tax base." Minimum standards The 2014 policies also established minimum standards required of developers. To be eligible for public financing, developers must achieve some or all of the standards. The aspects of this project meeting those standards are as follows: • The project must have high quality architectural and site design. The proposed project combines a lively palette of building materials that will bring new interest to Riverside Drive. The architecture is sensitive to the site and to the living units on the first floor and their separation from grade using street trees, ramps and walls. (see letter from developer). • Projects must be energy efficient and offer sustainability features above and beyond the required building code. Among other features, the project will have an array of photovoltaic solar energy collectors to generate a portion of the energy required for the building. The building will also include recycling collection centers on each floor. • If residential, projects must either provide a certain number of affordable units or contribute to a fund for that use. October 10, 2014 Page 3 This project will make 12 of its 96 apartment units (12.5% of the units) available for lease as workforce housing to income qualified residents. The developer will work with the Housing Fellowship for the management and monitoring of those leases. • Redevelop an underutilized or blighted property. When the former car dealership opened at this site, it was closer to the edge of town than to the center. As the community has grown, property near the core has become more valuable, thus making the highest and best use of greater density and more oriented residential or mixed uses. • Developer equity must meet or exceed the financial request from the City. This is accomplished, as detailed in the attached report from NDC. Rebates Preferred The 2014 Economic Development Policy also states that for developers seeking financial assistance, rebates, as opposed to cash up -front shall be highly preferable. This developer has secured the additional financing required to do the project with rebates as opposed to up -front cash. TIF rebates ensure the City bears no risk because the project will be completed and have paid in 100% of its full property tax bill before a portion of that amount is rebated the following year. Recall that the portion of new property taxes not rebated to the developer continues to flow as new tax revenue to the schools, the County and the City. Recommendation Staff is recommending approval of the City's financial participation in the form of TIF rebates, not to exceed $1,809,875. With this project, we gain a new housing option west of the river. We see this as a catalyst project for further development in the Riverside Drive portion of Riverfront Crossings, leading the way in the addition of new, affordable, close -in housing options for young professionals and graduate students. 4, "_. Current photo or site Enclosures: Letter of request from developer NDC report Dear Councilors, Please accept this letter as a formal request for Tax Increment Financi for the redevelopment of a 3.02 acre parcel at 629 S. Riverside Drive, Iowa City. This parcel has been recently rezoned to Riverfront Crossings district The project requires $1,809,875 in TIF financing and we request that assistance be distributed in the form of TIF rebates over ten years. The project will consist of 96 leased residential units. The majority of the units are studio, one and two bedroom units, the unit types sought after by non-undergrad tenants. The design and appeal of such dwelling units is targeted for an underserved Iowa City population, specifically young professionals who work at various west side locations (University Hospitals and Clinics, Dental School, Law School, Pharmacy School, Nursing School, etc.). There has been virtually no west side development since the conversion of the Grandview Apartments, in University Heights, to condominiums almost 10 years ago. We believe there is a segment of the rental population that is non -undergraduate and would like amenity based leased housing located close to downtown and the emerging cultural scene, yet not in typical eastside undergraduate complexes. Creating such an appeal accounts for some of the reason gap financing is required. The addition of fully developed underground parking availability, higher end interiors, elaborated architectural detailing and finishes, multiple elevators, and extensive landscaping and the development of community areas have all added to the overall development costs and distinguish this project from more typical projects that cater to undergraduate populations. The project will be actively and overtly marketed as a "professional" building with rules for noise and limitations of number of tenants per unit. The project will consist of 96 leased residential units. The majority of the units are studio, one and two bedroom units, the unit types sought after by non-undergrad tenants. The design and appeal of such dwelling units is targeted for an underserved Iowa City population, specifically young professionals who work at various west side locations (University Hospitals and Clinics, Dental School, Law School, Pharmacy School, Nursing School, etc.). There has been virtually no west side development since the conversion of the Grandview Apartments, in University Heights, to condominiums almost 10 years ago. We believe there is a segment of the rental population that is non -undergraduate and would like amenity based teased housing located close to downtown and the emerging cultural scene, yet not in typical eastside undergraduate complexes. Creating such an appeal accounts for some of the reason gap financing is required. The addition of fully developed underground parking availability, higher end interiors, elaborated architectural detailing and finishes, multiple elevators, and extensive landscaping and the development of community areas have all added to the overall development costs and distinguish this project from more typical projects that cater to undergraduate populations. The project will be actively and overtly marketed as a "professional" building with rules for noise and limitations of number of tenants per unit. 629 South Riverside Drive The target tenants for this project are especially interested in a location that allows them pedestrian and bicycle access to the west side campus workplaces, recreation facilities, and downtown cultural events. Access to the Law School and the UIHC is only 4-5 blocks via the Myrtle Street pedway. There are no less than 15 restaurants within 4 blocks of this location. The City Council has been clear in its intention to revitalize the downtown by limiting liquor licenses, supporting storefront remodeling grants, and hiring a downtown development coordinator. The University has in turn located the new School of Music downtown and are soon to announce the downtown location of the new Museum of Art. In addition, the University Recreation Center located on Burlington Street, which was designed to serve both students and non -students alike, has announced plans to double the size of the facility. Our community is in the process of balancing the appeal of downtown and near downtown to include more adult activities ("FilmScene" for example of a TIF supported project, and the redeveloped Englert Theater) with existing food and entertainment options. We will construct 96 units, primarily 2 bedroom 2 bath units with a mix of studio, 1 bedroom and a limited number of 3 bedroom 2 bath units. We will offer 12 units (30% more than the 10% suggested by City planning department) at "Workforce" rental rates as determined by HUD guidelines. To this end we anticipate utilizing the Housing Fellowship (an Iowa City non-profit CHODO) in a management and compliance role for the designated units. In an effort to appeal to a market of young professionals who have strong interest in environmental sustainability, we are anticipating the utilization of rooftop photo voltaic solar collector panels to generate electrical capacity. We also are planning to devote spaces on each floor for recycling centers. ff f{ 4fl h I is MM t �l i.,i � IIfRYw..A 5 F `yA N Y Y It should be noted that the applicant has already invested in the proposed site by removing older existing structures and completing Phase I and II environmental studies. The clearing of an underused, yet crucially located, blighted site. Most of all we view this project as a significant CATALYST for future Riverfront Crossings development and an architectural statement for the South Gateway entrance to Iowa City. Upscale projects will inspire more of the same. We have agreed to cede significant property to the City for street buffer and wider pedestrian right of way, reduce curb cuts on Riverside Drive (US Highway 6), and offered easement cooperation for the development of the scheduled tunnel project under the railway overpass. The additional 10 foot across the entire Riverside Drive frontage and the easement for tunnel access is estimated to have a value of approximately $100,000. We look forward to further conversation with you regarding this project. Thank you for your attention and consideration. EMRICO LLC by: Kevin Hanick MEMORANDUM Date: October 8, 2014 To: Jeff Davidson, Economic Development Administrator, City of Iowa City From: Tom Jackson, Director, National Development Council CC: Wendy Ford, Economic Development Coordinator, City of Iowa City RE: Riverview Condominiums, 629 South Riverside Drive At your request, NDC has reviewed the materials submitted by Kevin Hanick of Iowa City (hereinafter, "the Developer") in support of a request for City gap financing for the development of ninety-six (96) residential condominiums at 629 South Riverside Drive. Twelve of the units (12.5%), will have reduced rents that meet the City's affordability requirements for workforce housing and will be restricted to households at or below 120% of the Area Median Income (AM I). The project will also include 71 underground parking spaces and an additional 100 outdoor spaces. Given its location, availability of underground parking and proposed high level of finishes, the Developer intends to manage the development as rental units marketed to university faculty and staff, medical residents and other professionals. NDC and City development and planning staff have met with the Developer on multiple occasions since November 2013 and have exchanged questions and updated information by email between on -site visits. The Developer has refined its projections on the project's development costs and operating revenues and expenses as the project's design, specifications and unit mix have been modified in response to zoning requirements and a market analysis. The developer has provided the following documentation to support their projections and request for gap financing: • A Market Study, dated August 12, 2014, by Cook Appraisal/Commercial Valuation Research Group, of Iowa City; • A final proforma statement of operating revenue and expenses (revised pursuant to the completion of the market study); • A development budget based on conceptual designs and construction estimates provided by Build to Suit, Inc. of Iowa City (Pat Barten, formerly of McComas-Lacina Construction and Southgate Development, principal) • A financing term sheet from the University of Iowa Community Credit Union identifying a maximum loan amount, rate, term and underwriting criteria. An appraisal identifying the project's as -complete fair market value (FMV), estimated rental revenues and expenses, vacancy rates and absorption periods has not been completed at this time. The comprehensive Market Study covers many of these same issues, but the final appraisal will be relied on by the senior lender to determine the maximum loan that will be offered to the project. The Riverview Condominiums October 8, 2014 Page 2 Developer represents that an appraisal prepared by Rick Inman of Rally Appraisals is being finalized and is expected during the month of October. NDC's analysis of the projected financials for the project suggests that gap financing from the City in the amount of $1,809,875 is required to bring the project's sources in line with projected uses, as follows: Total Project Costs $16,106,136 Projected Bank Loan $10,029,375 62.27% TIF-Supported Financing $ 1,809,875 11.24% Required from Developer $ 4,267,386 26 49% Total Sources $16,106,136 100.00% The estimates and projections the developer has provided, as modified and confirmed by the supporting materials identified above, support a recommendation for gap financing for the project through a rebate of the portion of the incremental property taxes generated by the development for the following reasons: 1) Rents for units designed to appeal to residents who are not undergraduate students are not well established near the project site. Given the proposed larger units, square foot rents average just below $1.20 per square foot, well below many units closer to Downtown. 2) The twelve (12) affordable units, composed of 1, 2 and 3 bedroom apartments, reduce the project's potential gross income by $26,411 in the first year. The resulting reduction in the project's net operating income reduces its capacity for debt and equity attraction. 3) A stabilized vacancy rate of 2% is identified in the market study and accepted for NDC's analysis. This rate is below the 3% rate modeled for other projects proposed in and near the Riverfront Crossings district. 4) The amount of bank debt attracted to the deal has been maximized given the projected operating proforma and underwriting criteria (1.2 debt coverage ratio, 75% loan to value) that are very favorable to the project. The projected loan amount is also influenced by the capitalization rate, which was identified in the market study at a very strong 6.75%. 5) The recommended equity contribution of $4,267,386 was determined based on an 8.5% internal rate of return (IRR) given the projected after-tax cash flow and net sales proceeds of the project if held as a rental property for 25-years. The 8.5% IRR was proposed as reasonable in the market study and accepted by NDC for its analysis. Conclusion: the project as presented demonstrates a need for gap financing in the amount of $1,809,875. If the terms of the selected senior debt and updated project costs are substantially different from what the Developer has projected, NDC will review this evaluation as requested by the City. r CITY OF IOWA CITY .zZt--- MEMORANDUM Date: October 8, 2014 To: City Council Economic Development Committee From: .Jeff Davidson, Economic Development Administrator Re: Agenda item #4: Consider a request for financial assistance for Iowa City Marketplace CORE Sycamore Town Center LLC is owner of the former Sycamore Mall property now rebranded as Iowa City Marketplace. They have successfully negotiated leases that will fill the vacant Von Maur anchor store space with Lucky's Market, a fresh food organic grocery store, and Planet Fitness, a personal fitness center. As shown in the attached letter, CORE has requested financial assistance from the City to assist in funding the improvements necessary to get the new tenants in the space. A $4.4 million renovation budget for Phase I improvements that will get Lucky's and Planet Fitness into the Von Maur space has been reviewed and approved by City Engineering Division staff. It includes parking lot and pedestrian accessibility improvements. The request for financial assistance has been subjected to the City's standard financial gap analysis process, using our financial analyst the National Development Council (NDC). NDC evaluated the total mall renovation budget of $9.1 million and substantiated a financial gap of $4.7 million. The City has negotiated a Phase I improvements project which would provide $1.75 million in Tax Increment Financing assistance for the $4.4 million in improvements necessary to get the anchor store space reoccupied. This is what is before you for consideration of approval at your October 13 meeting. The proposed financial assistance will be structured as a six year TIF rebate which is predicated on the taxable value of the property increasing from the current $10.2 million to approximately $16.0 million once the mall is fully reoccupied. These figures and the associated assumptions have been reviewed with the City Assessor. We are limited to a 6 year TIF because that is the number of years remaining in the Sycamore and First Avenue Urban Renewal Area which was established under the economic development provisions of State TIF law. The TIF district expires in FY21. Because of the short term remaining in the TIF district, we are proposing using the taxable value increase from the entire Sycamore/First Avenue TIF District to fund the $1.75 million. The assessor has indicated that Iowa City Marketplace is such a dominant component of the Urban Renewal Area that increases and decreases in the mall's assessed valuation are mirrored in the entire district. By capturing the TIF increment from the entire district we believe the $1.75 million can be fully funded in the six year timeframe. Because it is structured as a rebate, it is predicated on the actual taxes paid and there is no exposure for the City if assessed valuations do not hit the estimated targets. In that case the mall owner may not receive the full $1.75 million. About the project The rebranding of Sycamore Mall as Iowa City Marketplace, and establishment of Lucky's Market as the anchor tenant is the foundation for the revitalization of the mall property. The rear of the anchor space, which is not a prime retail location, will be renovated for Planet Fitness with a more formalized entrance facing US Highway 6. Attached are renderings showing the proposed exterior renovation design and site plan layout. October 9, 2014 Page 2 The mall owner has explained that getting the anchor space reoccupied is the key component of getting the remainder of the mall leased up. The mall is currently 40% vacant, and after Lucky's and Planet Fitness are in place it will be 25% vacant. The mall owner has indicated that having the anchor space occupied is a huge catalyst in getting the lights on in the remaining spaces in short order. This is reflected in the taxable value estimations that have been made with the City Assessor. There is additional benefit to having the mail space occupied by an entity like Lucky's Market because of the hours of operation. A typical retail store in the anchor space would bring people to the property between conventional mall retail hours of 10:00 am to 9:00 pm. Lucky's operating hours will be approximately 7:00 am to 11:00 pm. It is estimated that Lucky's will attract 7500 to 10,000 people to the mall each week. The center of the mall will be reconfigured with individual storefronts onto the parking lot. This will occur for Lucky's Market in the phase one project that is before you, and is intended to include additional retail spaces in subsequent phases. According to the mall owner this is a deliberate strategy that is being implemented nationally to "demallify" old mall properties. For the time being the Panera and movie theatre ends of the building will remain in the mall format. The City has indicated to the mall owner that a condition of our financial involvement will be pedestrian and landscaping improvements to the parking area. We intend for the mall renovation to be a significant enhancement to the adjacent neighborhoods and the mall owner has indicated they embrace this philosophy. Sidewalk connections to the mail entrances will be constructed from Sycamore Street, Mall Drive, and the proposed new right -in entrance on First Avenue. These sidewalks are shown on the attached site plan layout. These enhancements will be memorialized in the development agreement. Sustainability initiatives A press release was issued by the mall highlighting the "green -friendly" features that will be part of the mall renovation. The specific initiatives include: Replacement of HVAC refrigerant with R-22 refrigerant. This refrigerant has zero ozone depleting potential, low global warming potential and is expected to produce energy savings of 15-20% 2. Recycling of ceiling tiles, aluminum ductwork, miscellaneous metals, concrete and lighting fixtures from the Von Maur space 3. Donation of old furniture for reuse or resale 4. Creating a "Go Green" area within Iowa City Marketplace where customers and tenants can recycle cans, bottles, and other containers 5. The renovated spaces will include LED light fixtures which use substantially less energy 6. The parking lot lighting will be renovated to LED fixtures October 8, 2014 Page 3 The City Council adopted Strategic Plan The April 2014 revisions to our adopted economic development policies were intended to more closely align with the adopted City Council Strategic Plan. A principle goal is to attract and retain commercial businesses that will grow the property tax base. Financial incentives offered by the City, specifically TIF, should implement the goals and strategies of the Strategic Plan. The following goals and strategies are achieved by this project: • High quality architectural and site design. The Iowa City Marketplace Phase I renovations are being designed by local architect Shive Hattery Engineers and Architects. Design standards will be memorialized in the development agreement which will be adopted by the City Council. • Energy efficiency and sustainability features beyond what is required through adopted building codes. The items highlighted above go beyond building code requirements. • Developer equity equal or greater to public financing requested. The proposed funding split based on the $4.4 million Phase I cost estimate is 60% developer/40% City. This financing will deplete the resources of the Sycamore and First Avenue TIF District for the remaining life of the district, meaning there will be no City funding through TIF of subsequent renovation phases. • Redevelopment of underutilized or blighted properties. The mall owner has kept the property in good condition. However, at 40% vacancy it is considered a blighted property. This is reflected in the assessed valuation. • Projects achieving public purposes as detailed in the Comprehensive Plan. Comprehensive Plan guidance for the Iowa City Marketplace property is included in the adopted Southeast District Plan. That document includes a section on page 30 establishing goals for "encouraging activities and physical improvements that create a sense of identity and improve the economic vitality for the Sycamore Mall/First Avenue Commercial Corridor." Summary CORE Sycamore Town Center LLC has requested City financial assistance to establish Lucky's Market and Planet Fitness in the former Von Maur space. This is Phase I of the larger project that will fully lease the mall as the rebranded Iowa City Marketplace, and raise the taxable value of the property from $10.2 million to $16.0 million. Actual annual property taxes paid will increase from approximately $347,000 to $566,000. Following expiration of the TIF district in 2012, the full property taxes will flow to the taxing entities. In exchange for the recommended $1.75 million TIF funding, the mall owner has agreed: 1. To fund 60% of the estimated $4.4 million in Phase I improvements 2. That the exterior building renovations will be consistent with the architectural renderings provided 3. To make pedestrian and landscaping improvements to the parking area as shown in the site plan layouts provided 4. To implement environmental sustainability features as enumerated October 9, 2014 Page 4 The proposed project is consistent with the adopted City Council Strategic Plan, and the Southeast District Plan which is the Comprehensive Plan for this area. According to the City Assessor the recent decline in property value and anticipated increase in property value after improvements are completed on the mall property will be mirrored in the property values in the entire Sycamore/First Avenue Urban Renewal area. Recommendation Approval of a six year TIF rebate using the incremental value of the entire Sycamore/First Avenue TIF District, not to exceed $1.75 million. (a, A I LZ MASTER PLAN wma,um IOWA CITY MARKETPLACE - IOWA CITY, IOWA W t ..f� ✓F� 10.07.14 SHVGhIATC@RY Q HroHw.4r e ( J��JJJJJ PHASE1IMPROVEMENTS wwowc. IOWA CITY MARKETPLACE - IOWA CITY, IOWA 10.07.14 5HIVEFIA=-FRY YJ♦ - �'G r{El A ll IF, l U. HIGHWAY 811STAVENUE FRONTING FACADE UPGRADES -VIEW FROM SOUTH EAST IOWA CITY MARKETPLACE - IOWA CITY, IOWA W�rw:m 11110 10.07.14 SITYG-HATfERY August 14a`, 2014 Mr. Tom Markus City Manager City of Iowa City 410 E. Washington St. Iowa City, IA 52240 Re: Sycamore Matt — Iowa City Marketplace Request for Development Assistance On behalf of the owners, I am pleased to announce exciting new possibilities at Sycamore Mall — including a dynamic tenant mix, job creation and enhanced retail sales. We are now formally requesting financial assistance for the development of this new tenancy and associated capital improvement requirements, in order to bring these benefits to Iowa City. The advantages are substantial in so many ways, such that we are requesting a 50150 partnership for this to help not only the area surrounding the shopping center, but the entire local community. This project is no longer a dream or mere vision, as we have already secured the tenants to make this a reality. No guess work is needed, as this project will bring in excess of 200 jobs and boost retail sales to a level in excess of $20,000,000 per year initially, Both the jobs and the retail sales numbers represent new benchmarks for Iowa City, providing positive economic growth for everyone well into the fixture. We have worked on our budget with assistance from our architects and engineers, Shive-Hattery, located in Iowa City and have developed a comprehensive budget of $4,400,000. In order for the project to move forward we will need the assistance of the City of Iowa City in the amount of $1,750,000. These funds will be used for tenant improvements, redesign and remodeling of specific areas of the center, including infrastructure work that will be necessary to complete the transformation of the property to a degree required for a change of this magnitude. The anticipated change in the property's taxable valuation will represent a considerable increase. The present valuation is $10,150,000; and, we are quite confident, this amount will increase to $16,000,000 in the near future, and even higher as the center continues to grow. The addition of these types of tenants and the changes planned for the destination shopping and entertainment center will increase taxable property value and retait sales volume for the entire geographic area. Non -monetary improvements are also very important and can be so valuable for the people within the trade area. The center is being designed to be a social gathering place, a place to shop, a place to dine and a place for family activities and entertainment — but represents so much more. Careful attention has been paid to the public spaces with children's play areas and dedicated places and a variety of options to cater to entertainment for all ages. We are tying together the vibrant tenants we currently have and bringing in new ones to complete a desired balanced mix. Sycamore Mall soon to be branded the "Iowa City Marketplace" will be the place local and regional residents will shop and frequent as an exciting entertainment and social meeting place. We have incorporated the best qualities of a power center and have kept a social area within part of the enclosed mall. The City„ local community and businesses that have been located in Sycamore Mall will all benefit. Everyone has worked very hard to make this happen and we would like to express our sincere thanks to all of those in the City that have generously given of their time and talents to extend efforts for us that will ultimately benefit of the entire Eastside community. FINANCIAL ASSISTANCE REOUESTED: A financial analysis of the project shows that the project is not financially feasible without assistance. The Owner, CORE Sycamore Town Center LLC, a Delaware limited Liability Company hereby requests assistance in the amount of $1,750,000. We know the City expects certain performance standards such as occupancy levels, employment levels, landscaping and/or other aesthetic requirements and we look forward to working these into the development. fohn Arlotti Developer Representative for Ownership CORE Sycamore Town Center LLC Wendy Ford From: Matt Hartz <mhartz@newpi.coop> Sent: Wednesday, October 08, 2014 11:04 AM To: Wendy Ford Subject: New Pioneer letter to Economic Development Committee Attachments: NPC-IC Economic Development Committee 10-8-14.pdf Follow Up Flag: Follow up Flag Status: Flagged Good Morning Wendy, Please see the attached letter from the New Pioneer board of directors for inclusion in the Economic Development Committee's meeting packet. Are you the appropriate contact for this communication? Best Regards, Matt Hartz zo; �deo-op City Council of Iowa City ATT N: Economic Development Committee 410 E. Washington St. Iowa City, IA 52240 October 8, 2014 Dear Committee Members: The New Pioneer Co-op board of directors recently learned that the City of Iowa City is considering offering $1.7 million in tax increment finance (TIF) assistance to the California owners of the newly renamed Iowa City Marketplace to attract Lucky's Market. Lucky's is a Boulder, Colorado -based organic and natural foods grocery chain that is in part financed by venture capital. The market for groceries in the Johnson County area is fixed, and already very competitive. Bringing in an additional competitor in this category will not drive economic development in the city. It will not increase the size of the market, nor will it increase employment in Johnson County since one or more other stores likely will be forced to eliminate jobs to match their reduced market shares. By approving the TIF assistance to Core Realty Holdings and Lucky's Market, the City of Iowa City would force existing grocers in Johnson County both to pay taxes and lose business in order to support the financial success of a new out-of-state competitor. This is a prospect that seems counter to the City's own economic goals from the Comprehensive Plan. We welcome Lucky's to Iowa City but let them come and compete on an even playing field. Do not ask existing grocers to subsidize their entry into the Iowa City market. Sincerely, The New Pioneer Co-op Board of Directors Admin.Otfim za 5. Linn St. Unit fA! Iowa City, 1A 5a4o • (319) 24s.G"o www.newpi.com 6 `.p CITY OF IOWA CITYMEMORANDUM ilp To: Economic Development Committee From: Jeff Davidson, Economic Development Administrator Date: October 9, 2014 Re: Agenda Item #4 The City Manager has asked that the following two articles be included in your packet. Cedar Rapids council backs three TIF deals Incentives will support Nash Finch redevelopment and Berthel Fisher, New Pioneer Coop projects By Rick Smith, The Gazette ine rormer alstribution center of Nash Finch at 1201 Blairs Ferry Rd. NE in Cedar Rapids is seen in this photo taken on Monday, Aug. 18, 2014. (Justin Wan/The Gazette-KCRG TV9) CEDAR RAPIDS — Three tax increment financing or TIF incentives were endorsed this week by the City Council. The projects that will benefit include The Hunter Companies' project to build a $12 million office building for Berthel Fisher & Company with retail space and a restaurant at Edgewood Road NE and 42nd Street NE; the Hunter Companies' $16 million project to demolish the former Nash Finch distribution center at 1201 Blairs Ferry Rd. NE to make way for a new commercial development called Northtowne Market; and New Pioneer Cooperative Society's $5.5 million renovation of a vacant building at 3338 Center Point Rd. NE. Each of the incentives will allow the property owner to forego the payment of property taxes on the value of the new investment for five years. In the Berthel Fisher project, the city estimates a tax savings for the property owner of $1.6 million over five years and the payment of $4.79 million in property taxes to local jurisdictions over the next 15 years. On the Nash Finch property, the city estimates a tax savings to the property owner of $2.1 million for five years and the payment of $6.4 million in property taxes over the next 15 years. The New Pioneer project will see $731,500 in tax savings to the property owner over five years and the payment of $2.2 million in property taxes over the next 15 years. All the properties currently generate some level of property taxes for local jurisdictions, and that base tax level will be paid during the five-year, tax -break period of the incentive. During public hearings this week on the Nash Finch and New Pioneer projects, Dennis Jordan, economic development strategist for the Cedar Rapids Metro Economic Alliance, told the City Council this week that the development projects were important for the city. Jordan said The Hunter Companies was taking on risk at the vacant Nash Finch property, the demolition and redevelopment of which likely would not take place without city incentives, he said. The property once was at the edge of town, but now is on a major commercial artery in the city, he said. City Council member Monica Vernon said the Nash Finch property was a vacant industrial brownfield "in the middle of the city," and she doubted that a developer would come forward to redevelop the property but for a city incentive. Jordan said the council's incentive for the New Pioneer project may serve as a catalyst for other investment in the Center Point Road NE commercial corridor, he said. Council member Scott Olson said New Pioneer already was renovating the Center Point Road NE building, and he asked Jennifer Pratt, the city's interim development director, why the city was being asked to provide a property -tax break on a project that already was proceeding without it. Pratt said the city had been in discussions with New Pioneer for some time, but she said the business's move to renovate and open has outpaced the Community Development Department's ability to get the incentive package to the City Council. New Pioneer has said it hopes to be open by the end of the year F0-©1Fif [o `LVA Corridor Business journal _._ Today's PM E mad Wednesday, Oct. 8, 2014 Update Catch up on the day before you head home for the night. Bxeaking_News . E *� Focus: Real . + • + Estate/Development -""dual £uiu ilwcxs Opening for New Pioneer's Cedar Rapids store draws RR?lFny?R near As New Pioneer Food Co-op nears the opening of its Cedar Choose the Rapids site, the co-op has received initial approval for tax dental carrier increment financing from the city and announced three job that more Iowa fairs. employers choose.o The job fairs will be: • Oct. 16 at NewBo City Market from 4-7 p.m. • Oct. 16 at the Iowa City Work Force development office from 4-7 p.m. DAILY THEME e Oct. 31 at NewBo City Market from 2-6 p.m. SCHEDULE Monday -Health Care For more information, visit: www.Homeprownlowan.com. Tuesday - Education Wednesday - Real Estate/Development U.S. Cellular to host hiring events Oct. 14 in CR and C Thursday - oralville I A r=-w-.Q p� C I TY OF t O WA CITY `''AI� ME M 0RANDUM Date: October 1, 2014 To: City Council Economic Development Committee From: Wendy Ford (— Re: Agenda Item #5 — Consider a Recommendation for Englert funding in FY16 Budget and intent to fund in FY17 and 18; and Englert Theatre Annual Report. The Englert staff and Board of Directors are requesting a recommendation to the City Council for $70,000 in the FY16 budget, and that you also recommend intent to continue funding the Englert at that level in FY17 and FY18. In December of 2008, the City Council Economic Development Committee approved a proposal from the Englert Theatre for a three year annual funding request of $50,000 for fiscal years 2010, 2011 and 2012 to be reviewed annually. Prior to budget season each year since, the Englert has presented an annual report and requested consideration for continued inclusion in the budget for three more years. Last year, the City's support of the Englert included $50,000 for operations funding and an additional $20,000 for capital improvements. The construction of a lounge in the second floor gallery space will allow the Englert to help offset the impending loss of rental revenue from Hancher and the Division of Performing Arts as they move into new facilities in the coming months, and provide better service for patrons and event rentals going forward. The gallery is now more marketable for private rental functions. Over the course of the six fiscal years the City has provided funding to the Englert: • The annual budget has gone from $843,000 with a $118,000 deficit (2008) to a $1.3 million budget, without a deficit for a third year in a row. • Event attendance has grown from 30,297 in 2009 to 57,641 in 2013 (and is in line for 63,000 by the end of 2014). • Increased programming to include summer months and a growing diversity of events. • Repaired nagging roof leaks and the piaster ceilings under them. • Replaced some but not all of the aging sound and lighting equipment. • Celebrated the 100 year anniversary of the theater. • More than quintupled the number of Englert's Friends donors from 200 in 2011 to 855 in 2013 and just over 1,300 today. Recommendation Staff recommends supporting the Englert's request, and forwarding a recommendation to the full City Council to fund the request through the Economic Development Division budget in FY16 and retain a placeholder in the FY17 and 18 budgets. This is justified by the following factors: October 9, 2014 Page 2 • Addresses Strategic Plan goal of Continued Development of the Downtown and Near Downtown Areas with the specific action of facilitating private investment through partnerships on strategic properties. • The theater is meeting all of the goals set forth for it and has grown its operation by more than 25% while becoming more efficient in maintaining expenses and increasing margins. • The Englert continues to provide entertainment alternatives for the entire community, including those under 21; • A strong theater generates downtown visitors who frequent restaurants, shops and other entertainment venues. • The Englert attracts visitors and residents to downtown. Of credit card ticket purchasers, 42% of ticket purchases are made with cards from outside of Johnson County and 19% of those are from out of state. With projected attendance at 63,000 this year, the number of Englert visitors coming for shows from outside the county will top 26,000 people. Please be prepared to discuss the Englert's request for a renewed funding commitment. If you have any questions, feel free to contact me. Cut #15.5tB265# tptH x+k6�iea�,leteAry� CIE' M E lhash'141011 St. 10*4Chy.te 52M !CONNECT LOW, ;Fatebu-A-PMrSpaeetTowner October 7, 2014 To the Economic Development Committee: Thank you for your continued support of the Englert Theatre. This Annual Report outlines our organization's progress and growt; in 2013 and so far in 2014. The report includes our current financial statement, ticket sales data, donor relations data, and future strategic plans for the theater. The Englert Theatre continues to experience positive growth. The organization's operations are charting a course towards long-term financial stability and the theater's offerings as a cultural landmark in Downtown Iowa City have been diverse, far-reaching in appeal, and artistically impressive. In the first quarter of 2014, the Englert reached a partnership with local arts initiative Mission Creek Festival, penning a three-year agreement to serve as fiscal sponsor and administrative consultant to the Iowa City event. Through this partnership, which we hope to renew on an ongoing basis, the Englert will assist Mission Creek Festival in becoming a local institution and a national landmark in arts programming. As we look to the future of our partnership with the City of Iowa City we request approval of continued financial support -- $50,000 contribution towards operations and $20,000 reimbursement for continued capital improvements — for fiscal year 2016 and the following two years (2017 - 2018). We greatly appreciate the city's approval in this past year of a$20,000 reimbursement for capital improvements at the theater. This support contributed to the Phase I renovation of our Douglas and Linda Paul Gallery. Further capital support would allow us to continue our next phases of development for that gallery space in 2015 — to transform it into another key stage/room in our histcric building that can serve as a public and private meeting space for local groups and businesses and a small performance venue for music, literature, and dramatic readings. As always, we encourage the City to consider its support of the Englert as an investment in Iowa City's overall cultural and economic vitality. The Englert's ongoing programming brings welcome energy to downtown Iowa City and encourages considerable consumer spending with approximately 60,000 attendees each year. We are very appreciative of the City of Iowa City's support and attention to Englert-related issues. We hope this support will continue into the future. We remain committed to growing the cultural cache of Iowa City for a wide range of residents and visitors. Sincerely, Andre Perry Executive Director The Englert Theatre Table of Contents 1. Current Financial Report II. Debt/Cash Flow Projection III. Three Year Financial Report IV. Attendance Report & Ticket Purchase Demographics V. Englert Theatre in the Greater Marketplace VI. Donor Relations VII. Future Strategic Plans I. Current Financial Report Below, please find the Englert Civic Theatre, Inc. profit and loss statement ending August, 2014 reflecting eight months of financial performance. August YID financial performance is below budget by $20,198 and is below prior year by $117,302. August YTTJ financial performance has been driven by challenging programming margins including a budgeted investment in a new family series partially offset by a strong Mission Creek contribution in its inaugural year with the Englert. PROFIT/LOSS STATEMENT Income Aug Actual Aug Budget Last Aug Fundraising/Grants $24,129 $6,300 $21,323 Englert Events 11,492 59,978 66,376 Playbill Advertisting 2,248 12,300 1,308 Rental Events 32,864 26,955 33,448 Mission Creek 0 0 0 Other Z613 2,663 Z317 Total income $73,345 $108,196 $114,772 0'- Administration $9,318 $5,863 $5,304 Marketing Z331 3,083 Z452 Building 9,065 9,328 7,921 Fundraising Expenses 5,785 200 L267 Personnel 46,382 38,845 33,039 Englert Events 15,569 51,584 51,475 Artist& Audience Outreach 0 0 0 Playbil! Advertisting 5,030 6,000 4,141 Rental Events 507 0 0 Mission Creek 0 0 0 Non-Operating(interest) L422 1750 2,082 Total Expenses $95,409 $116,653 $107,680 Aug YTOActual Aug YTDBudget Last AucYTD $144,499 $108,940 $138,796 424,579 462,647 489,217 44,509 52,500 48,665 130,303 111,058 140,610 206,732 125,ODD 0 30,009 25,236 27,097 $980,631 5885;281 $844,375 $45,802 $37,819 $47,208 32,061 24,668 21,923 53,666 60,735 53,028 14,592 7,600 7,977 318,929 284,552 268,768 374,102 363,245 362,144 1,688 0 0 9,401 18,OD0 14,425 4,094 3,905 5,265 179,385 113,500 0 11,251 15,400 16,377 $1,044,972 $929,424 $797,114 Oper8tmgProfit/(Lo5s1 ($22,064) ($8457) $7092 ($64,341) ($44,143) $47261 2011 Capital Campaign $1,000 $000 $1,500 $8,000 $8,ODD $13,700 Proiltmoss1 $8592 ($56,341) ($36,143) $60,961 11. 2014 DebVCash .Flow Projection Subsequent to the July, 2011, Cityscape equity buy-out and legal entity consolidation to a single non-profit organization January, 2012, the Englert has maintained a positive cash flow with manageable debt position. The below chart reflects 2014 Englert April YTD and forecasted debt and cash positions 450,000 -- --`— - -- 400,000 3M,000 $350,421t entv-ftw year mortgage, 300,D00 $67,500}hte year note 250,000 200,000 1SOp0D 1W'000 50,(M Jan Act Feh Act MarAd Apr AR MayF t Jun Frt Jul Fat Aug Faf Sep Rrt Ort Fort Nw Fcrt Dec Fat Mash—P-Debt III. Three Year Financial Report with 2014 Budget Key historic financial drivers have included substantially improved theater utilization, better programming margins, and reduced spending. 2011's capital campaign generated $254,001 in cash and future pledges to support ongoing building debt and spending. 2012 expanded summer programming accelerated Englert Series admission revenue and allowed Total Income to exceed $1 million. 2013 recognized the highest -ever level of Operational Profit of $64,379. Income Total Development Income Other Income Rentals Englert Series Mission Creek Total Income Expenses Administration Building Fundraising Non -Operating Personnel Rentals Englert Series Mission Creek Total Expenses Operational ProfiU(Loss) 2011 Capital Campaign ProfW(Loss) 2011 ACTUAL I H 3 2012 ACTUAL 12013 ACTUAL 1 2014 Budget DI'VITIJU 121,661 $ 77,299 8,298 21,532 311,107 6,794 320,257 858,547 $ 155,422 34,2411 197,595 807,1471 d 12 122,943 $ 80,698 10,068 25,059 36%189 6,426 545,753 1,180,936 $ 249,319 42,332 174,033 920,484 109,312 $ 86,895 19,737 22,114 413,277 7,643 662,812 4,321,790 $ 216,075 44,000 169,705 901,351 1,456,131 117,007 87,865 20,000 22,375 445,498 8,705 651,181 1,468,131 $ 33,058 $ 34,269 $ 64,379 $ (10,000) $ 69,153 $ 48,200 $ 32,100 i $ 35,000 $ 1OZ211 $ 82,469 $ 96,479 $ 25.000 IV. Attendance Report & Purchase Demographics These numbers come from our ticket sales as well as our "drop count" at every event. We use the drop count numbers when the event is free or a renter uses an outside ticketing source to sell tickets. We use ticket sales numbers for all events sold through the Englert box office. 2014 Attendance (As of May 31, 2014) Englert Presents/Co-Presents Tickets Sold: 12,357 Englert Presents/Co-Presents, Free/Non-Ticketed Events: 1,062 Rental Attendees (both ticketed and free events): 15,465 Total: 28,884 (as of May 31, 2014) — end of year projection: 63,000 2013 Attendance Englert Presents/Co-Presents Tickets Sold: 30,756 Englert Presents/Co-Presents, Free/Non-Ticketed Events: 4432 Rental Attendees (both ticketed and free events): 22,453 Total: 57,641 2012 Attendance Englert Presents/Co-Presents Tickets Sold: 26,322 Englert Presents/Co-Presents, Free/Non-Ticketed Events: 3,652 Rental Attendees (both ticketed and free events): 22,807 Total: 52,781 2011 Attendance Englert Presents/Co-Presents Tickets Sold: 20,792 Englert Presents/Co-Presents, Free/Non-Ticketed Events: 3,748 Rental Attendees (both ticketed and free events): 27,077 Total: 51,617 2010 Attendance Englert Presents/Co-Presents Tickets Sold: 17,622 Englert Presents/Co-Presents, Free/Non-Ticketed Events: 1,478 Rental Attendees (both ticketed and free events): 26,813 Total: 45,913 2009 Attendance Tickets Sold: 9877 Non -ticketed attendees (lectures and other rentals): 20,420 Total: 30,297 Ticket Purchase Demographics 2009-2014: These figures are gathered from online credit card sales and phone order sales. They only tell part of the story of customers who have come to the Englert. Other methods of purchasing tickets are not accounted for in this review. These figures show a strong base of support for Englert events from the immediate community. While the Johnson County numbers have dipped down, the Out - of -State numbers and the Other Iowa numbers have increased. Enelert Theatre Customers 2014 (through May 2014) Total Johnson County: 58% -Iowa City: 45% -Coralville: 6% -North Liberty: 4% -Other Johnson County: 3% Total Non -Johnson County: 34% -Cedar Rapids/Marion: 10% -Other Iowa: 241,10 Out -of -State: 8% Enelert Theatre Customers 2013 Total Johnson County: 66% -Iowa City: 51 % -Coralville: 8% -North Liberty: 4% -Other Johnson County: 3% Total Non -Johnson County: 27% -Cedar Rapids/Marion: 8% -Other Iowa: 19% Out -of -State: 7% Englert Theatre Customers 2012 Total Johnson County: 66% -Iowa City: 5 1 % -Coralville: 8% -North Liberty: 4% -Other Johnson County: 3% Total Non -Johnson County: 28% -Cedar Rapids/Marion: 8% -Other Iowa: 20% Out -of -State: 6% V. Donor Relations Community Sponsors The Englert continues to receive significant support and contributions from several community partners in the forni of ongoing pledges to our 2011 Capital Campaign amounting to $137,500. Those partners include: ACT Benchmark, Inc. Hills Bank and Trust Company Integrated DNA Technologies MidWestOne Bank Rockwell Collins University of Iowa Community Credit Union West Music Other Sponsors Include: 126 Applicance Barn Arts Mission, Inc. Basta Pizzeria Ristorante Blick Art Materials The Bywater Family Fund Cedar Ridge Vineyards Chair Galleries Downtown Clinton Street Social Club Devotay Gannet Foundation Gay & Chia Hands Jewelers HyVee Iowa City Coralville Area Convention and Visitors Bureau Iowa City Downtown District Iowa Department of Cultural Affairs Iowa Public Radio MC Ginsberg Mediacom Moen Group Motley Cow Cafe New Pioneer Co-op Oasis Pediatric Associates of Iowa City and Coralville Press -Citizen Media Share/Sherton/Hotel Vetro Takanami Total Tree Care Iowa City Trumpet Blossom Cafd Yotopia Frozen Yogurt Zephyr Friends of the Englert (Individual Donors): 1308 households as of May 31, 2014 (May 2013: 855; May 2012: 485; May 2011: 200) VI. Englert Theatre in the Greater Marketplace Englert programming and development in recent years has positioned the theater on relatively equal ground to other theaters, performing art spaces, and concert venues in the Midv✓cst. In some instances, the Englelt's event schedule exceeds the quaiity of events of other theaters in competitor markets. It is important to note that the theaters, performing arts spaces, and other venues we compete with often have larger capacities (1000+) or exist in cities with populations larger than Iowa City (70,000 pop.) Despite these possible limitations the Englert has the potential to further rival the programming found in other markets, thus making Iowa City a more desirable location for current residents, potential new residents, and other Iowans seeking a venue for cultural events. Competitor Markets for Arts Programming in the Midwest City Population Chicago, IL 2,800,000 (Sample venues: The Metro, Goodman Theatre, Vic Theatre) Minneapolis / St. Paul (Twin Cities), MN 2,800,000 (Sample venues: The Orpheum, First Avenue / 7" St. Entry) Omaha, NE 400,000 (Sample venues: Orpheum Theatre, the Slowdown) Champaign -Urbana, IL 200,000 (Sample venues: Krannert Center, Canopy Club) Des Moines, IA 200,000 (Sample venues: Hoyt -Sherman, People's) Madison, WI 200,000 (Sample venues: Majestic Theatre, Overture Center) Sioux Falls, SD 150,000 (Sample venues: Washington Pavillion) Lawrence, KS 100,000 (Sample venues: Granada, Bottleneck, Lawrence Arts) Columbia, MO 100,000 (Sample venues: Blue Note, Missouri Theatre) VII. Future Strategic Plans Programming Vision An ongoing effort of the theater is to sharpen our programming initiative. Diverse programming remains a key goal: We ensure our events attract the various demographics in our community. In the past year we have offered a wide variety of programming including: children's shows, plays and musicals, readings, lectures, music performances, film series, and on-stage/intimate shows. We have showcased both local and national talent. Our biggest step in programming this year was reaching an agreement with Mission Creek Festival to serve as the new home for the arts initiative in its ninth year. Moving forward, the Englert will work with Mission Creek to grow the festival's scope in all areas. Capital Improvements As we look to the future, we continue to catalog capital improvements that will enhance the Englert experience for all patrons. In 2014, we are conducting a phase one renovation of the second floor Douglas and Linda Paul Gallery. In 2015, we are looking at potential upgrades in our audio / visual components. Further down, we are conceiving a possible build -out of our rooftop area into a green -space that can be utilized for rental events, providing beautiful vistas of downtown Iowa City. Changing Cultural Landscape of the Corridor In past years, we have discussed the Englert's plans to adapt to the changing arts landscape of the Corridor. In 2014, we are beginning to face some of these challenges directly. This year, a five-year, $40K/year contract with the Division of Performing Arts has expired. This change leaves us with a $20K gap in revenue in 2014 and a $40K gap in revenue in 2015. In Fall 2016, when the new Hancher opens, we will lose rental revenue as Hancher programming returns to its own venue. As we move into years with less guaranteed, long-term programming we are exploring ways to fill these gaps via increased programming revenue in the fall and spring seasons and new rental ventures such as weddings. r r=-�A°I CITY OF IOWA CITY MEMORANDUM To: Economic Development Committee From: Wendy Ford, Economic Development Coordinator Date: October 9, 2014 Re: Agenda Item #6 — Consider a recommendation for financial support of Mission Creek Festival Introduction: Iowa City's Mission Creek Festival (MCF) is requesting $12,500 from the City's Economic Development Assistance Funds for its April, 2015 festival, and a request to be included in the FY16 budget process for the same amount for 2016. The April, 2015 event will mark the 10`h annual five-day Mission Creek Festival and continue a tradition featuring fine music, literary and culinary culture, and growing a relatively new feature of programming geared to youth and technology innovation. The event highlights Iowa musicians, writers, chefs, and entrepreneurs exposing them to national attention while simultaneously connecting nationally recognized talent in these fields with an Iowa audience. The resulting media coverage is a boon to Iowa's presence in the national scene and presents Iowa City as the cultural center of the upper Midwest for the entirety of the festival. Every year more tickets are sold, more events are staged and more of the community is involved. History/Background: There is broad support from businesses and our non-profit community, local radio stations, media and several facets of the University of Iowa. Notably, local restaurants are very strong contributors, an indicator that Mission Creek is good for their bottom lines. The festival has grown in notoriety gaining the attention of regional and national media. The addition of programming geared to youth and technology innovation has grown the audience and reinforces the concept that "We Create Here," in the Creative Corridor. With such broad community support, a growing program and increasing notoriety, the festival's influence reaches far beyond the Creative Corridor. The City began its support of MCF using Community Event and Programming funds beginning in FY10. For each of the last two fiscal years, the City has added to that support through Economic Development Assistance Funds. Current yr Budget yr FY10 FY11 FY12 FY13 FY14 FY15 FY16 Community Event & Programming funds $5,000 $3,632 I $4,000 $4,000 Economic Development I Requesting Requesting funds $5,000 $5,000 $12,500 $12,500 TOTAL $5,000 $3,632 $g,000 $9,000 $12,500 $12,500 October 9, 2014 Page 2 At the Economic Development Committee meeting in April, 2014, the City Manager expressed a preference for including MCF funding in the budgeting process, which will allow both the organization and the City time for planning expenses and resources. Approving today's request would be the last time MCF would be requesting funds from within a current fiscal year and it would position future year's requests within the framework of the budgeting cycle. Recommendation: Staff recommends approving this request, and forwarding a recommendation to the full City Council to fund the April 2015 Mission Creek Festival with funds from the Economic Development Assistance Fund, and to budget the same amount in the FY16 budget. We feel it is justified because the Mission Creek Festival: • Addresses the City Council's Strategic Plan goal of a commitment to a strong urban core, and • is a strategic economic development activity because it enhances the image and brand of Iowa City as a creative, cultural hub. MISSION CREEIFESTIVAML October 7, 2014 To the Economic Development Committee I am writing to submit a funding request to the City of Iowa City's Economic Development Committee in the amount of $12,500 for Mission Creek Festival 2015 (March 31 —April 5, 2015) as well as the 2016 festival (dates pending). We deeply appreciate the history of support — financial and advisory — from the City of Iowa City. Our festival continues to grow in positive ways from year to year. This document includes some of the basic information about the organization including past year data, 2015 budget, and staff bins. With a focus on music, literature, film, art, youth outreach, and food culture, Mission Creek Festival provides the greatest opportunities for Iowa -based artists to perform their work as well as for Iowa -based patrons to see nationally and internationally -regarded artists. Our literary arm is the longest -running literary festival in Iowa City. Our music programming consistently brings notable acts to Iowa City for the first time, thus increasing our stature amongst prominent artist booking agents. Last year's festival featured legendary composer Philip Glass, two-time National Book Award nominee Rachel Kushner, performance artist Laurie Anderson, and indie-rock band The Head and the Heart. Mission Creek Festival continues to garner positive and strong regional coverage as well as national coverage from publications in the music and literary worlds, thus increasing the spotlight on Iowa City as a cultural center. We believe Mission Creek does important work in putting Iowa City on the map as a place to be, a place to live. In 2014, we have expanded our programmatic offerings with more events for K — 8 youth, a film series presented in conjunction with FilmScene, and a two-day Tech + Innovation conference within the overall festival. In 2015, we will continue to develop those endeavors as well as host our first ever craft fair within the festival to support craft artists in our greater community. We are also excited to announce that we are developing a long-term partnership with the Englert Theatre in which that organization will become the official home of the festival, providing important administrative support to help ensure the sustainability of the Mission Creek initiative for many years to come. Thank You, Andre Perry Mission Creek Festival, Director 1. Organizational Information Organization: The James Gang dba Mission Creek Festival Event: Mission Creek Festival / Dates: March 31 —April 5. 2015 /Attendance:—10,000/year Contact: Andre Perry / 221 E. Washington Street, Iowa City, IA 52240 319-688-2653 x108 t andre@englert.org About Founded in 2005, Mission Creek Festival is an annual week-long festival that takes place every spring in Downtown Iowa City. The festival is dedicated to inspiring and building the Iowa City area's artistic communities through the exposure of local, regional, national, and international artists. The programming focuses on literary readings, music performances, public lectures, film screenings, local food culture, educational outreach, and a tech + innovation mini -conference. In 2015, programming will expand to include a more focused visual art element as well as a craft fair celebrating the work of local and regional craft artists. The festival serves audiences of all ages and cultural backgrounds. The festival also utilizes the existing cultural geography of our town — bookstores, clothing stores, cafes, and performance spaces —turning the downtown area into an easily -navigated nexus of music, art, and transformative experiences. The primary objective of the Mission Creek Festival is to enhance the quality of life in the community through diverse arts programming that caters to young and creative individuals, traditional patrons of the arts, and general members of the community. It is our belief that students, professionals, new transplants, young families, and lifelong residents can work together to infuse a community with vitality. In our continuing dedication to new and progressive art forms, as well as broadening the scope of the festival to include initiatives like local food culture and educational outreach, we present festival artists and attendees with programming experiences uncommon in the Southeastern Iowa cultural landscape. Consequently, our festival increasingly draws comparisons to nationally recognized events like South By Southwest in Austin, Texas and Litquake Festival in San Francisco, California. This festival has literally grown from "the ground up," with the support of local and regional businesses that continues to sustain us. Many of our sponsors have noted how our event not only deepens the cultural fabric of the Cedar Rapids/Iowa City "Corridor," but also drives residents and revenue toward locally -owned shops and restaurants. We work closely with our local business partners and sponsors to assess needs, measure outcomes, and arrange in -kind and promotional donations that highlight the area's resources and services. 2014 Festival — Quick Facts Attendance: 10,200 (3-year average: 9,900) Number of featured musicians: 295 / Number of featured writers: 90 Number of Iowa -based musicians: 130 / Number of Iowa -based writers: 57 Number of Iowa -based chefs: 6 Venues in 2014 (19 venues): The Englert Theatre, Blue Moose, The Mill, Gabe's, Prairie Lights, RSVP, Foxhead, MC Ginsberg, Revival, Yacht Club, Deadwood, Nodo, Beadology, Motley Cow, Iowa City Public Library, Dublin Underground, White Rabbit, John Pappajohn School Of Business, Atlas Restaurant Sponsors in 2014 (22 sponsors / 58.6K in sponsorship funds): University of Iowa Community Credit Union — TITLE SPONSOR, City of Iowa City, Integrated DNA Technologies, West Music, MC Ginsberg, Iowa City Sheraton, Iowa City/Coralville Convention and Visitors Bureau, Iowa City Area Development Group, New Belgium Brewing, Jim Beam Global, Little Village, The Iowa Review, FullStack, Hobu, Revival, Motley Cow, Devotay, Deluxe Bakery, Iowa Public Radio, Iowa City Downtown District, Tuesday Agency, and University of Iowa: Hancher, SCOPE, KRUI Selected Past Festival Performe raters/Lecturers (2006 — 2014): Philip Glass, Laurie Anderson, Rachel Kushner, Jason Isbell, The Head and the Heart, Hannibal Bursas, Grizzly Bear, David Cross, Tig Notaro, Bon Iver, Beach House, the Magnetic Fields, Guided By Voices, Thurston Moore & Kim Gordon of Sonic Youth, John Waters, Patty Griffin, Greg Brown, Pieta Brown, Bowerbirds, GZA/Gerius, Public Enemy, Divine Fits, Thao & The Get Dow Stay Down, the Mountain Goats, Dan Deacon, Fruit Bats, Zola Jesus, No Age, the Antlers, Camera Obscure, Tiiiy and the Wall, Sharon Van Etten, Colson Whitehead, Aleksander Hemon, Charles D'Ambrosio, Edmund White, Eula Biss, Tim Hecker, Rhys Chatham, The Meat Puppets, William Elliott Whitmore, D.A. Powell, Booker T., Kiki Petrosino, and hundreds more... Future Goats: -Expansion of festival by providing high -quality programming for niche interest groups — tech, literature music— as well as hybrid programming to create connections between these different groups. Il. Mission Creek Festival Budget Overview FY2015 Revenue 2016(projected) 2014(actual) Festival pass sales: 17,500 17,425 Individual tickets sales: 105,000 80,180 Sponsorships — cash: 57,5"uv^ 68,825 Concessions: 10,000 16,418 Total revenue: 190,000 212,848 Expenses Staffing: 30,000 20,500 Programming & Outreach: 129,000 138,287 Marketing: 4,500 8,905 Administration, Production: 8,500 13,392 Concessions: 3,000 4,925 Total costs: 173,000 186,009 Net/(Balance): 16,000 26,839 Ill. Staff Bios Andre Perry, Festival Director Andre Perry lives in Iowa City where he serves as the Executive Director of the Englerf Theatre, a ' 01- year-old performing arts space in the heart of downtown. He is also the co-founder and director of the Mission Creek Festival, a weeklong exploration of music, literature, and food culture that inhabits established venues as well as non-traditional performance spaces in Iowa City. Perry received his MFA from the Nonfiction Writing Program at the University of Iowa (2008) and his BA in English from Princeton University (2000). He continues to write and publish in the field. Joseph Tlefenthaler, Associate Programming Director Joseph M. Tiefenthaler is a native Iowan and serves as the Executive Director of FilmScene, an independent non-profit movie theater in downtown Iowa City. He received his BA in English from the University of Iowa in 2005 and worked at the University of Iowa's International Writing Program for seven years where he coordinated the annual Fall Residency Program — effectively serving as the cultural ambassador from Iowa City for roughly 30 writers from around the world. He is also the Editor -at -Large for acclaimed literary journal, Wag's Revue. Christopher Wiersema, Associate Programming Director Leaving a position at Chicago's Newcity magazine, where he covered arts and culture, Chris relocated to Iowa City in 2001 and found a fertile arts community that offered encouragement, collaboration, and enthusiasm. Noticing a deficit in avant-garde music programming, Chris began a music promotion company, Outsound Productions, with little more than his email, a clutch of extension cords, the promise of a home -cooked meal, and tacit permission to use a closed downtown business as a venue. Since then his productions have occupied traditional and non-traditional venues alike. The scope of his musical focus now includes myriad genres and he has hosted artists, composers, and musicians from around the world. Chris previously served as manager of local music venue, the Picador. He has studied at Columbia College and the School of the Art Institute of Chicago. r Ir CITY OF IOWA CITY ��IN �Pwfflo M E M. U R A N D U M Date: October 9, 2014 To: City Council Economic Development Committee From: Tracy Hightshoe, Neighborhood Services Coordinator Re: Towncrest Financial Incentives Financial incentives to encourage revitalization and reinvestment in the Towncrest Urban Renewal Area (URA) were established in 2011. The URA was founded on slum and blight to encourage and support development and reverse the deterioration of commercial and residential property. Incentives include Tax Increment Financing (TIF), Gap Financing Forgivable Loans, Pre -Development Design Grants and Fagade Improvement Grants. Community Development Block Grant (CDBG) funds are also available for Fagade improvements and small business assistance to businesses that qualify under various federal requirements. Iowa City Free Medical Clinic (2440 Towncrest Drive) used FY11 CDBG funds for a complete exterior rehabilitation based on the Towncrest Design Standards adopted in February of 2011. MDK Development L.L.C. used TIF, Towncrest Gap Financing and a Pre -Development loan to construct two new medical offices on William Street and, most recently, Iowa City Hospice utilized the fagade improvement grant to complete an exterior remodel at 1025 Wade Street. City staff has been working with Greg Downes to construct a new building at 2500 Muscatine Avenue for several years. The lot has been vacant since 2009. The owner has submitted various building designs for a residential building; however the designs did not meet the Towncrest Design Plan and were denied. Staff encouraged the owner to hire an architect to assist with the design of the building. The owner hired an architect to design a 7-unit residential building that will incorporate the exterior elements required by the Design Plan. The proposed design has been approved by the Staff Design Review Committee. The owner requests financial assistance for architect fees and increased design costs. Staff recommends approval of a $25,000 forgivable loan from the same source of funds as the Gap Financing Forgivable Loans for the architect fees and the increased costs of exterior finishes required by the Design Plan. The owner estimates that the brick and stonework to be utilized will increase his cost by approximately $54,000 over a building with vinyl siding as originally proposed. This will be the first residential property to be assisted in the Towncrest Urban Renewal Area. Staff's recommendation is contingent upon the owner obtaining a building permit based on the submitted design as soon as a development agreement is entered and starting construction no later than May 1, 2015. Grants are paid after the project is completed and a Certificate of Occupancy issued. Should you have any questions, please contact me at 319.356.5244 or tracy-hightshoe@iowa- city.org. Towncrest Area Fagade Improvement Program Application APPLICATION INFORMATION m ad A � Attachment B: Contact: Wendy Ford, Program Administrator 410 E. Washington Street Iowa City, IA 52240 (319)356-5248 Name: Greg Downes Application Date: 10/2/2014 Phone: 319-530-9608 Approval Date: Referred by: 'latex Grant Amount. DUNS Number (http:/ffedgov.dnb.com/webform) AgroemQnt # Shaded area for office use only BUSINESS INFORMATION Name of Business: Greg Downes Business/Project Owner's Name: Same Address: 601 Hollywood Blvd. Suite 6 Phone: 319-338-5491 Fax: 319-338-3406 E-mail: gregd@downesre.com Website: na Type of Business: Real estate owner / developer Approx. % of the building occupied by 0 applicant business: Residential units in building? 7 PROPERTY OWNER INFORMATION Name: Greg & Teri Downes- Years Owned: 16.5 Address: 2500 Muscatine Ave Phone: 319-338-5491 city/statslzip: Iowa City, Iowa 52240 Estimated Cost of Improvements: $ 95,000 1 Grant Amount Requested: $ 25,000 . 1 DETAILED DESCRIPTION - Please submit a detailed description of your Fagade improvement project on a separate sheet. Include visuals if possible and describe all materials and proposed changes to building facade: CHECK APPROPRIATELY: 01 own the property in consideration ❑ I lease the property in consideration* I have read the Towncrest Fagade Improvement Program and Design Guidelines. I understand that if the proposal is approved, I witl make the above improvement the property in accordance with the Program Guidelines. nn APPLICANT'S SIGNATURE:" AII t i L Y11i6/ DATE: 1011114 10/1/2014 Regarding the application for facade grant assistance for 2500 Muscatine Avenue in Iowa City As my property is located in the Towncrest Revitalization Area and the proposed improvements are subject to design and review requirements. As such a number of enhancing features were required to go forward with construction in the district. Several of these have costs attached that are above what I would have done were I not in the district. Typically I would use brick or stone for accent but much of the exterior finish would have been vinyl siding. As vinyl siding is prohibited in this area I was required to use masonry and cement board siding for exterior materials. I would anticipate about $20,000 cost for vinyl siding with some brick or stone veneer accent. The main building is proposed to be full masonry veneer. Brick and stone textures and colors had to be preapproved by staff. The cost of the brick and stonework is estimated at $74,0000 by my mason. Additional expense will be required if temperatures are below freezing at the time we apply the masonry veneer. The detached garage is to be hardiboard cement siding in a prefinished paint. The labor is $8, 585. The material costs have not as yet come back but I have estimated them at $7,500. Additionally staff has asked that I provide a steel handrail painted a specific color. I will have to get a local shop to fabricate them and paint them. I have estimated the cost of the deck railings at $3,000-$4,000. 1 am attempting to build a high quality architecturally appealing structure. I utilized a local architectural firm to design the property and made several modifications to get acceptance under the design and review process. This has been an expensive project just through the design stage. I spent just under $10,000 to get the preliminary site plan and conceptual drawings completed to the satisfaction of staff. The construction drawings have not been billed as yet but the initial proposal was an additional $17,000 for this portion of the design process. I think the time to date is approximately $13,000 according to the latest report I received. Thank you for your consideration. 4ne�.,. Roof Bra ♦IR-T VP' SOUTH ELEVATION ELEVATION KEY NOTES WEST ELEVATION OI KNS s1r FAZE BRIOf: VBBPR.- O FRO.[LTINg 5w FRoM AOIX QEROKEE RED MLDIAS ST WTME - NTH ALU FA - Rou" O2 51NSLE NN6 NNOLH NIH Lo" LOLL. 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STRWARE PROVIDE MLNNM PRWDERA51R5 NTH VW FACW ON PERRETE4 OF am. 6-9-14 r CITY OF IOWA CITY MEMORANDUM Date: October 9, 2014 To: City Council Economic Development Committee From: Tracy Hightshoe, Neighborhood Services Coordinator Re: Building Change Program Building Change, a successful City of Iowa City economic development program introduced last year, was offered again this past spring/summer. Business and property owners in the City - University Urban Renewal Area (downtown buildings) and Northside Marketplace were eligible to apply for fagade, energy efficiency, fire safety and accessibility improvements, and renovation of underutilized upper level space for commercial or residential uses. Fagade improvements in the City -University Urban Renewal Area were eligible for a 30% grant paid through Community Development Block Grant (CDBG) funds. Projects not meeting the federal requirements were eligible for a 0%, 5-year loan for up to 50% of the total project costs. This financing was made possible through a partnership between the City and Hills Bank & Trust Company, MidWestOne Bank and the University City Iowa Community Credit Union. The lenders committed up to $150,000 for local businesses and property owners to improve their downtown and Northside Marketplace buildings. Eleven applications were received. Nine were selected for funding, including two projects in the Northside Marketplace. CDBG grants totaling $85,125 for Fagade improvements were awarded to Bremer Trust (Cold Stone Creamery building), Joe's Place, Martini's, Sports Column and Yotopia. These funds will leverage over $283,000 in private investment. Oasis Falafel, Blue Bird Diner, the former Tobacco Bowl (Thomas Connolly), M.C. Ginsberg and Sports Column received loan approval for their proposed improvements. The City anticipates that the improvements will be completed by June 30, 2015. Downtown and Northside Marketplace businesses and property owners may still apply for the 0% interest loan. Approximately $60,000 remains available. Please contact me with any questions or concerns at tracy-hightshoe@iowa-city.org or 319.356.5244. Building Change Applications as of this printing: 10/8/2034 Round Recipients Project type Total Eligible costs C0BG Grant Loan Owner Cold Stone building 132 E. Washington (Bremer Trust) 2nd Level: Remove paint, tuckpoint, cornice $ 57,000 $ 17,100 $ 39,900 Joe's Place (Brian Flynn) 115 Iowa Ave. Complete Fa de Improvement $ 96,700 $ 29,010 $ 67,690 Martini's (Fatah Teghanemt, Aziz Longou) Paint, masonry repairs, door replacement & 127 E. College St. walkway improvements $ 74,450 $ 22,335 $ 26,058 $ 26,058 Sports Column (Soren Larson) 14 S. Dubuque St. Windows, awning, mural (alley) $ 42,300 $ 12,690 $ 14,805 $ 14,805 Yotopia (Veronica Tessler) Clinton St. Fagade & Energy Eff (Grant only for fayade) $ 23,200 $ 3,990 $ 91605 $ 91605 Blue Bird Diner (Thomas Connolly) 330 E. Market St. Storefront window and door $ 13,400 $ - $ 6,700 $ 6,700 Oasis Falafel (Naftaly Stramer) 206 N. Linn St. Windows/door $ 6,500 $ - $ 31250 $ 3,250 M.C. Ginsberg (Mark Ginsberg) Fagade improvements: reglaze windows, sign, 112 E. Washington St. hidden door $ 54,600 - $ 27,<-00 $ 27,3O0 Tobacco Bowl/Former Buzz (TLC Omnibus) 111 S. Dubuque St. Storefront window and door $ 6,800 $ 3,4D0 $ 3,400 Totals $ 374,950 $ 85,125 $ 91,118 $ 198,708