HomeMy WebLinkAbout06-14-2016 Economic Development Committee� r ,
CITY OF IOWA CITY
UNESCO CITY OF LITERATURE
1. Call to Order
AGENDA
CITY COUNCIL
ECONOMIC: DEVELOPMENT COMMITTEE
JUNE 14, 2016
1 2:00 NOON
EMMA HAWAT HALL
C[TY HALL
2. Consider approval of minutes from the May 10, 2016 Economic Development
Committee meeting
3. Discuss Economic Development Policy Review process
a. Focus group agenda
b. Background TIE info to present at focus group meetings
4. Staff report
5. Committee time
6. Other business — set next meeting dates.
7. Adjournment
EDC 6.14.16 packet
page 1
MINUTES
CITY COUNCIL ECONOMIC DEVELOPMENT COMMITTEE
MAY 10, 2016
CITY MANAGER'S CONFERENCE ROOM, CITY HALL, 12:00 P.M.
Members Present: Rockne Cole, Susan Mims, Jim Throgmorton
Staff Present: Eleanor Dilkes, Wendy Ford, Geoff Fruin, Tracy Hightshoe
Others Present: Tom Banta (ICAD); Nancy Bird (ICDD); Matt Swift and Jill (Big Grove);
John Rapson; Dick Dorzweiler; Steve Locher; Rebecca Neades (ICACC);
Mitchell Schmidt (Gazette)
RECOMMENDATIONS TO COUNCIL:
Cole moved to recommend the request to the full City Council for financial assistance of
$40,000 for facade improvements to Big Grove Brewery, located at 1225 S. Gilbert Street.
Throgmorton seconded the motion.
The motion carried 3-0.
CALL MEETING TO ORDER:
The meeting was called to order by Chairperson Mims at 12:00 P.M.
CONSIDER APPROVAL OF MINUTES:
Minutes of the April 12, 2016, meeting were reviewed.
Cole moved to approve the minutes as presented.
Throgmorton seconded the motion.
The motion carried 3-0.
CONSIDER A RECOMMENDATION FOR FINANCIAL ASSISTANCE OF $40,000 FOR
FACADE IMPROVEMENTS TO BIG GROVE BREWERY, 1225 S. GILBERT STREET:
Fruin spoke to Members regarding this request, noting that in 2013 the Riverfront Crossings
Master Plan was adopted for this area. This section of Gilbert Street is included in the Master
Plan and the request for facade improvements would be a very positive thing for this area. He
spoke to the value of improving one of the older buildings in this area and about Big Grove's
plans for it. Matt Swift then addressed Members, stating that they are excited about the
opportunity to bring Big Grove Brewery to Iowa City. They plan to use a high-tech brewing
system that will enable them to brew in an efficient manner. There will be a tap room addition in
the rear of the building which will open up toward the park behind the building. Mims stated that
she was very pleased to see this application and the plans that Big Grove has for this building.
Cole agreed with Mims, stating that this area of Riverfront Crossings could use a development of
this type. He believes it will become a destination. Throgmorton also agreed that the project will
be a plus for the area. He then asked for some clarification of the plans in the packet — he
wanted to know more about a mezzanine area that is shown on the drawings and how it
integrates with the rest of the floor plan. Swift explained where noting that it will be business
offices and located above the main floor area of the building. Fruin then spoke briefly to the park
development to the west, noting that Council will be seeing some plans soon regarding what is
projected for this area.
EDC 6.14.16 packet
page 2
Cole moved to recommend the request to the full City Council for financial assistance of
$40,000 for facade improvements to Big Grove Brewery, located at 1225 S. Gilbert Street.
Throgmorton seconded the motion.
The motion carried 3-0.
CONSIDER A RECOMMENDATION FOR NEXT STEPS IN REVIEWING ECONOMIC
DEVELOPMENTAND TIF POLICIES:
Ford noted after last month's meeting, staff thought that they should lay out a plan for a policy
review. Staff is suggesting that they conduct a series of focus groups that would involve small
groups of constituents who have or would be likely to have involvement with the TIF process.
This could include developers, architects and engineers, taxing entities, the Chamber of
Commerce, the local development group, and the Iowa City Downtown District, etc. Input could
then be gathered from these various groups, all in an effort to help guide changes to the
economic development and TIF policies. Ford stated that staff envisions that these focus groups
would be attended by at least one staff member and one member of the Committee. During this
time, Ford noted that the Economic Development Committee would continue to meet monthly,
with staff presenting various metrics for consideration. Once these focus groups have met and
ideas have been gathered, staff would present a recommendation for a new economic
development/TIF policy to a larger gathering of the focus groups before making a final
recommendation to the EDC.
Mims stated that she likes this idea, that she believes they need to gather input from key
stakeholders that are involved in development and potential TIF requests. She added that she
agrees with Ford, that they need something that will be workable both for the City, the taxpayers
of the City, and also the business owners and developers. Throgmorton stated that he has a
slightly different view, though he agrees with the importance of gathering input from key
stakeholders. He believes they need to expand the set of stakeholders. He suggested adding the
Center for Worker Justice, the Black Voices Project, and the City Federation of Labor, in
conjunction with the non-profit housing groups in the area. Throgmorton stated that he believes
these groups have a strong interest in what he considers `social justice,' which needs to be a
component of the economic development policy. Continuing, Throgmorton added that he
believes they need a separate stakeholder group consisting of environmental organizations. In
regards to the focus group discussions, Throgmorton further clarified how he believes they can
help participants better understand such policies as TIF and economic development. He also
spoke to the current policies and what he believes they need to change, such as providing
incentives for ensuring that they are continually producing a walkable city. Regarding incentives,
Throgmorton stated that he believes they need to provide them for projects that directly benefit
lower -income residents, such as providing job opportunities.
Cole stated that he wants to emphasize that we should honor the current policy but that he
believes they need to move forward as soon as possible with making changes, especially in light
of several upcoming projects and TIF requests. He stated that he agrees with Throgmorton, that
they must have labor involved in the process. Cole stated that he has four areas of concern
where he would like to see changes made. One is the affordable housing issue, and he believes
they have started to move in the right direction here. Environmental standards is another area he
believes will be important. Cole stated that he believes they should have some smaller
committees focusing on these important areas. Continuing, Cole spoke to the issue of high -
quality design and the need to further delve into this area as well. As for the review process with
TIF, Cole would also like to see this changed. He would like a process that would allow a
developer to appeal a staff `no' decision, when staff discourages approaching the EDC or Council
EDC 6.14.16 packet
page 3
with a request for TIF. The appeal would go to the Council for judgment. In terms of timeframes,
Cole agreed with Ford's outline.
Mims stated that she does not see how they can update the policies in a very timely manner if
they are also going to be educating stakeholders — that this would be a more prolonged process.
Regarding the topics that Cole and Throgmorton raised, Mims said that these are pretty much
already included in the current TIF policies and perhaps just need a bit more specificity. As for
the social justice piece, she does not see how some of these additional stakeholders are going to
provide significant input to the development of the policies, other than to say what they would like
to see happen, from their point of view. She believes that one of the biggest things in making
changes to these policies is that they will need to be workable in the end. She spoke to the
balance that she believes is needed with these types of policies.
Cole then spoke regarding the Center for Worker Justice and how they work closely with the
Iowa Policy Center and the Labor Center at the University of Iowa. He stated that he has found
that they are able to bring a lot of policy weight to proposals that they would make, which he
believes would be very beneficial in this circumstance. Cole stated that at the end of this process
he would like to make three concrete improvements that have been vetted by the community for
the next two to four years. He wants these changes to be significant and workable, as well as to
facilitate development.
Mims asked if staff's recommendation, as laid out in the memo, with the addition of some of the
additional stakeholder groups as mentioned by both Throgmorton and Cole, would be acceptable
to the other Members. Throgmorton stated that he believes it is absolutely crucial that a range of
stakeholders be involved in this process, that they should have a say as to what should be
developed in the city, that they should have a say as to what incentives are provided and for what
types of development they are provided for.
The discussion continued, with Mims asking the other Members how they would like to proceed
from here. Throgmorton stated that basically the recommendation of staff is a good one, and that
his suggestion is to add to the stakeholder groups that would be involved. He also believes it to
be crucial for staff to be collecting useful information about what measures could reasonably be
expected to encourage developers to produce structures that are, for example, very energy
efficient. Cole then spoke to affordable housing, noting that while this area is critical, he goes
back to three areas: environmental, quality jobs, and quality design. He believes that if they could
measurably improve these three areas and have the stakeholders focus on these, that it would
not be an overwhelming process. He also stated that he believes they should not rule out upfront
money for TIF when it comes to things like affordable housing and sustainability. Fruin then
spoke briefly to Cole's appeals process comment, noting that a developer can request TIF from
Council even if they have been discouraged from doing so at the staff level. He added that a few
years ago they had a request that proved not to have a financial gap and the developer followed
staff's recommendation not to proceed with a request because there was no gap. The developer
could still have approached Council to make his case.
Throgmorton then referred to his memo in the meeting packet. Elaborating on it, he said he
believes the density bonus provision needs to be compatible and consistent with whatever the
economic development policy becomes in order for things to move forward in the manner they
believe it should. Mims noted that these bonus provisions are totally separate from the TIF policy.
Mims spoke to how past Councils have handled TIF requests, giving some background on these.
Cole then asked how staff plans to solicit participation in the aforementioned focus groups. Fruin
responded that he and Ford would basically come up with a list of these participants, but that if
Members have any suggestions to let them know. Members then agreed that staff will look at
EDC 6.14.16 packet
page 4
setting up focus group dates and once these are known, Members can decide which groups they
can sit in on.
Ford spoke briefly to the upcoming workshop series 'So You Want to Start a Business' that she
and Hightshoe are working on. This weekend will be the first of five programs being offered at
Kirkwood Community College. Right now there are approximately 25 people registered for each
of the five sessions. Hightshoe also noted new changes the microloan loan program. This
program is geared to low income entrepreneurs (making 80% or less of median income) with
loans up to $10,000 at an interest rate of 3%. The City will continue as loan guarantors, in a
partnership with MidwestOne Bank.
COMMITTEE TIME:
Throgmorton asked where the public can find the City's economic development policy on the web
site. Ford noted that it is at icgov.org and in the upper right hand corner, where the search field is,
they can type in 'economic development policies.' The page will then come up with the links to
that document.
OTHER BUSINESS:
None.
ADJOURNMENT:
Cole moved to adjourn the meeting at 1:04 P.M.
Throgmorton seconded the motion.
Motion carried 3-0.
EDC 6.14.16 packet
page 5
Council Economic Development Committee
ATTENDANCE RECORD
2016
TERM
NAME
EXR
A
N
o
rn
rn
rn
Rockne Cole
01/02/18
X
X
X
Susan Mims
01/02/18
X
X
X
Jim
01/02/18
X
X
X
Throgmorton
Key:
X = Present
O = Absent
O/E = Absent/Excused
EDC 6.14.16 packet
page 6
Ir ,
CITY OF IOWA CITY
UN6C0 CITY OF LITCRATURL
CITY OF IOWA CITY
MEMORANDUM
Date: June 7, 2016
To: Economic Development Committee
From: Wendy Ford, Economic Development Coordinator
Re: Economic Development Committee Focus Group Planning
The following is an outline of how staff envisions the focus group meetings designed to gather
thoughts, ideas, and get feedback on Iowa City's use of TIF. We are proposing a 90 minute
meeting including a brief 20 minutes of introduction and overview followed by two 35 minute
discussions.
The first 35 minute discussion is designed to get impressions from community members about
the use of TIF. In order to get the benefit of each focus groups' perspective, we have penciled
out some discussion starting questions for each in the table below. These questions are meant
to begin a discussion with specific relevance to each focus group and will help us understand
the communities' understanding of TIF. We expect an enlightening discussion that will provide
broad insight to the community's understanding of TIF. We do not intend to limit the discussion
to just the discussion starters listed below.
The second 35 minutes will be focused on the future and the discussion starting questions will
be the same for each group. The goal of this part of the discussion will be to get input on the
public benefits TIF can and should leverage when public funds are used.
We will email participants the current TIF policies to review ahead of the focus group meetings.
Let's discuss this focus group meeting outline at your EDC meeting on June 14.
Agenda item
Time allotted — discussion starters
Make Introductions;
10 minutes
give purpose of
meeting
Overview of TIF
10 minutes
policy, examples of
TIF use, IC TIF in
Johnson Co
Ask for opinion
35 minutes
feedback.
(IMPRESSIONS)
Different questions
dependinq on rou :
- Past TIF recipients
- How has TIF helped meet your goals?
- Talk about the trade-offs, if any, of receiving public financing in
exchange forproviding public benefit
- Developers,
- Does TIF help et projects with greater public benefit?
Cull o. 14. 10 paCnel
page 7
Agenda item
Time allotted — discussion starters
architects,
- Are there things other than TIF the City could use to assist in the
engineers
development process?
- Talk about the trade-offs, if any, of receiving public financing in
exchange for providing public benefit
- How should design quality be measured?
- Taxing Entities
- How impactful has Iowa City's use of TIF been on your operation?
- What percent of Affordable Housing should be required in
residential TIF projects.
- Neighborhood
- What are your impressions of TIF?
Association
representatives
Do you feel IC's neighborhoods benefit from TIF
- What percent of Affordable Housing should be required in
residential TIF projects.
- Chamber, ICAD,
- What are the benefits to your organizations of TIF?
CVB, ICDD
- If TIF went away, what, if any loss would your organization feel?
- Environmental
- Is TIF an appropriate tool for leveraging the public benefit of
group reps
sustainability?
- What are the appropriate sustainability measures for gauging
whether/not a project should be granted TIF?
- Would TIF be an appropriate use for building the RFC park?
- Is TIF the ONLY tool that could be used to leverage public benefit?
- Nonprofit
- Do you think TIF is used appropriately in Iowa City?
representatives
- What percent of Affordable Housing should be required in
residential TIF projects.
- If jobs are a part of a TIF agreement, should TIF be granted to an
employer whose average wages are below the area mean wage?
Ask for feedback.
35 minutes
(FUTURE CHANGES)
- Ask all
- What are the most important public benefits the City should seek
when providing TIF?
- Considering the majority of costs in TIF projects are borne by the
developer and the developer is the driver of the projects in which
he/she engages, what kinds of projects would you like to see in
Iowa City, specifically those that might be granted TIF financing?
- What changes would you like to see in the TIF policies?
- If the demands for public benefit are too high for developers to
meet, is the alternative of just getting an adequate or mediocre
building that may result in generations of smaller tax revenues than
might otherwise have happened with TIF okay?
EDC 6.14.16 packet
page 8
Tax Inc
rement
Financing
Focus Groups
for Policy Discussions, 2016
What
is Tax
Ins
Financin
• A method of reallocating property taxes
resulting from an increase in taxable valuation
• The increment is the change between the
former value and the new value
• The only significant source of funds for cities to
use for Economic Development incentives
WEDC 6.14.16 pac
"M
page 10
How TIF works
(it's all about
the increment)
Owner Pays
100% Property
taxes:
$39,000
IE
1
1
1
'1
1
1
1
1
1
1
1
1
Owner STILL Pays
100% of the Property taxes:
$194,000
Including TIF
' levy:
$122,000
" TIF Increment
FROM NEW
' VALUE created,
all or part of
' which
may be
' reallocated
TIF Pori
cles
• High quality architectural and site design
• Energy efficiency and sustainability above required
building code standards
• Affordable housing: provision of units or contribution to
fund
• Creation of high quality jobs
• Developer equity equal to or greater than request
• Redevelopment of underutilized or blighted property
Other public benefits as detailed in comprehensive
plan, urban renewal planning documents or City
Council adopted Strategic Plan
Avenue of
Property Tax Exemption Areas
A Central Business Distnet
B Near Southside Commercial
FG
Near Southside Residential
Tax Increment Financing Districts
1 Northgate Corporate Park, 1999
2 Sycamore and First Avenue, 200D
3 Scott Six Intl usldal Pad*, 2001 8 Hwy. 6 Commercial Urban Renewal Are a, 2003 Zk
4 City -University Project 1, 2001 9 Moss Green Urban Vill age, 2010 fNv
5 Lower Muscatine Rd. & Mvy. 6, 2002 10 Towncres1, 2011
6 Industrial Park Road, 2002 �11 Riverside Dnve, 2012
1 Heinz Road, 2002 M 12 Camp Cardinal Urban Renewal Area, 2013
TIF Project examples
IM
Base'value: $ 56%520! iMMM
2015 value: $ 109160,280
New value: $ 91590,7601
MetaCommunications
Number of JoI �Mmi
Medical 0
Base value:
AAAr ___1____
.. ..
1 9_
t;j
q-,--Towncrest
Alpla of Iowa, Inc.
Base value: $ 3,594,340
2015 value: $ 16,676,470
New value: $ 13,082,130
Number of Jobs: 200+
Payroll : $6 million+ (est
ti
United Natural Foods Inc.
Base value: $ 4,653,740
2015 value: $ 11,715,050
New value: $ 7,061,310
Number of Jobs: 249
:�p I:$8m'
...and others
S:T A
V=N
VAIL a
.. a•wsua e- `',y i � �� �� _ i 4 ]_ _. 1 it �-�II�.
is 'IF Sol
fill
r R
j
in
Tax Increment
Financing
Johnson County
.-,tent of Each Town's Capturgedmin
■ PORTION NOT ca luring TIF
PORTION CAPTURING INCREMENT for TIF
100%
90%
80 %
70%
60%
50%
40%
30%
20%
10%
0%
°����0
Jan. 1, 2014 valuation year, FY201512016
Total Town Value, TIF Incremment, TIF pe apita
Iowa City
Coralville
North Liberty
Solon
Tiffin
Lone Tree
Swisher
Shueyville
Oxford
$453
$34,�20
$�10,449
%$99045
$119598 TIF Valuation
$9,538 Per Capita
$9,784
$259656
$9,610
$0 $1 $2 $3 $4
Total Value of Community in Billions
F NOT CAPTURING TIF INCREMENT
CAPTURING TIF
Jan. 1, 2014 valuation year, FY201512016
Johnson County's TIF Pie -.who has how much?
Iowa City,
3.34%
Tiffin', 2.&
Solon, 2.1 f
Shueyville
1.74%
Lone Tree
1.35%
Swisher, 0
Oxford , 0.
ation year, FYI 5116
Articles of interest...
INNOVATION
Corridor Business Journal May 30 - June 5, 2016 9
MERGE nabs grant for prototyping studio
By Chase Castle
chase@corridorbusiness.com
The w-worldng space and educational
tech center MERGE in downtown Iowa
City isn t scheduled to open until this fall,
but a newly announced $1.5 million grant
is likely to tide over stakeholders.
The grant from the Iowa Economic De-
velopment Authority announced May 20
will go toward a biomedical and electronics
prototyping hub, called protostudios, which
supporters said will be used by students.
The studio will be located within MERGE,
a two -floor space on Iowa City's Pedestrian
Mall that will host collaborations between
the University of Iowa's Office of Research
and Economic Development the Iowa City
Area Development Group (ICAD) and the
community at large.
UI staff said the grant will pay for hard-
ware for 3-D modeling and biomedical
device and wearable technology develop-
ment, among other applications.
Protostudios will occupy the first floor
of the space, which is on the western side
of the Iowa City Public Library. The down-
stairs area will be occupied by office and
meeting space.
David Conrad, assistant vice president
A view from the first floor of MERGE, located on the western side of the Iowa City Public
Library downtown. When the space officially opens this fall, a studio for developing proto-
types using 3-D modeling equipment and other electronics will be located on the first floor.
PHOTO/CHASE CASTLE
for research and economic development,
noted in a news release that protostudios
will be part of a statewide network that
includes advanced manufacturing hubs
such as TechWorks at the University of
Northern Iowa and the Center for Indus-
trial Research and Service (CIRAS) at Iowa
State University.
'MERGE and protostudios will incen-
tivize faculty, postdocs and graduate stu-
dents to start more companies, create a
pool of tech talent to meet the states IT
workforce needs, promote STEM educa-
tion, and bring together town and gown
communities for economic develop-
ment' Mr. Conrad said.
In describing the studio's long-term
potential, university staff said the center
could be used by people ranging from stu-
dents and graphic artists to startups and
even established technology companies,
with a spedfic focus on coding, web and
mobile app development.
Some of those practices were already
taking place at ICAD's former headquar-
ters in the IC Colab space, which was lo-
cated about two blocks southeast near the
corner of Court and Linn streets.
Including the group's Coralville office
at 2852 Coral Court, CoLab members
have included design firm Creative Mel-
len, software engineers Hobu, education
technology company Pear Deck and many
others.
ICAD President Mark Nolte said about
eight businesses made the move this
month from the old office into the new
space, which is poised for renovation and
remodeling in the coming months.
'They understand the short-term,
and they understand the long-term,' Mr.
Nolte said. 'We've really worked hard to
minimize the disruption in their business
as we continue to help them grow."
The center will offer bench seating in
an open work environment for up to 30
people, in addition to 18 rentable offices
that will range in size from private work-
spaces to rooms accommodating up to
eight people. The property is owned by
MERGE PAGE 11
EDC 6.14.16 packet
page 24
University of Iowa Vice President for Research and Economic Development Dan Reed said
MERGE's location at the center of Iowa City's Pedestrian Mall should help draw a diverse
range of users, including university staff, students and community professionals. PHOTO/
CHASE CASTLE
MERGE
CONTINUED FROM PAGE 9
the city of Iowa City, which has agreed to
offer a four-year lease at a rate of $2,000
a month the first two years and $2,500 a
month the final two years.
Although the space was originally
scheduled to open this spring, Mr. Nolte
said organizers are still awaiting applica-
tion results for federal Economic Devel-
opment Administration funding. He said
the project formally requested $800,000,
which would be equal to the amount
pledged by the university.
"So we just had to go ahead and move
over there and occupy the space as -is, and
once we know what, if any, federal fund-
ing we've got, then we 11 remodel accord-
ingly," Mr. Nolte said.
The space will still accommodate drop -
in and freelance professionals, some of
whom have already begun using the new
co-worldng space, despite the renovations
ahead. CBJ
MetaCommunications
expansion plans get
state assistance
MetaCommunications was awarded state
assistance for an expansion that is expect-
ed to create 105 new jobs in Iowa City.
The enterprise software company was
awarded $775,000 in direct financial assis-
tance through the High Quality Jobs pro-
gram for a planned $1.6 million capital in-
vestment. MetaCommunications produces
software used by creative agencies and
global brands to help them innovate faster
and more effectively.
The company's hiring plans extend over
three years, the Iowa Economic Develop-
ment Authority (IEDA) stated in a press re-
lease detailing the awards, announced on
May 20.
The IEDA board of directors approved
direct financial assistance and tax bene-
fits for eight companies planning capi-
tal investments totaling more than $43
million.
EDC 6.14.16 packet
page 25