HomeMy WebLinkAboutCCEDC Packet 9-15-17If you need disability-related accommodations in order to participate in this program/event, please contact Wendy
Ford, Economic Development Coordinator at 319-356-5248 or wendy-ford@iowa-city.org. We ask that contact us
early to allow sufficient time to meet your access needs.
Agenda
City Council
Economic Development Committee
Friday, September 15, 2017
3:00 pm
Emma Harvat Hall
City Hall
1. Call to Order
2. Consider approval of minutes from the July 21, 2017 Economic Development Committee meeting
3. Consider a recommendation to the City Council for Revised TIF Policies
4. Staff report
5. Committee time
6. Other business
7. Adjournment
EDC 9.15.17 packet page 1
EDC July 21, 2017, p. 1
Preliminary
MINUTES CITY COUNCIL ECONOMIC DEVELOPMENT COMMITTEE
JULY 21, 2017 EMMA HARVAT HALL, CITY HALL, 8:30 A.M.
Members Present: Rockne Cole, Susan Mims, Jim Throgmorton Staff Present: Eleanor Dilkes, Simon Andrew, Wendy Ford, Geoff Fruin, Sarah Hecktoen,
Ashley Monroe
Others Present: Ben Kinseth (Kinseth Hospitality); Kevin Digmann (Hodge Construction); Andy Davis (Iowa City Press Citizen); Ryan Sempf (Chamber of Commerce); Nancy Bird (Iowa City Downtown District); Mark Nolte (ICAD);
Kevin Monson (Neumann Monson Architects); Gustave Stewart, (UI Student Government) Martha Norbeck (C-Wise Consulting); Marissa
Payne (Daily Iowan)
RECOMMENDATIONS TO COUNCIL:
Cole moved to recommend to the full City Council support of the Hieronymus Square TIF
project. Throgmorton seconded the motion. The motion carried 3-0.
CALL MEETING TO ORDER:
Chairperson Mims called the meeting to order at 8:30 A.M. She then asked those present to introduce themselves for the minutes.
CONSIDER APPROVAL OF MINUTES FROM THE MAY 25, 2017 ECONOMIC
DEVELOPMENT COMMITTEE MEETING:
Cole moved to approve the minutes from the May 25, 2017 meeting as presented.
Throgmorton seconded the motion.
The motion carried 3-0.
CONSIDER A RECOMMENDATION TO THE CITY COUNCIL FOR SUPPORT OF HIERONYMUS SQUARE TIF PROJECT:
Ford spoke to Members concerning the recommendation before them. She noted that the
Economic Development Committee is being asked to recommend this to the full City Council. She began her presentation by noting that this project has been a long time in coming. This is a
$40.7 million project and the developers are requesting $8 million. The project is located at the
corner of Burlington Street and Clinton Street, and will be mixed-use throughout, including a hotel, retail space, office space, and residential units. Parking will be included in this project,
according to Ford, in the basement level of the entire parcel. Further detailing the project, Ford
noted that plans include a 92-unit extended stay hotel under the Element Hotel, a Marriott brand. Each room will be equipped with a full, compact kitchen. Hotel amenities include a patio, pool,
and a fitness center on the second floor. Ford noted that there will be access to the Court Street Transportation Center for hotel guests. The parking underground will be reserved for the residential component of the other building. Ford added that the developer hopes to execute an
EDC 9.15.17 packet page 2
EDC July 21, 2017, p. 2
Preliminary
agreement similar to the ones that the Sheraton, hotelVetro, and the Hilton Garden Inn have done with the Transportation Center.
Ford noted that the hotel is planning to go for gold level of the Green Seal Certification, which is a third-party, non-profit environmental certification for hotels. Further sustainability efforts include
the use of solar panels on the mixed use portion of the building. Ford noted that these are expected to generate in excess of 38,000 kilowatt hours of electricity per year.
In the mixed-use portion of the building, along Burlington Street, the first floor will be retail, while the second floor is class-A office space, and the third through seventh floors will comprise approximately 43 residential units. Ford stated that this will include seven on-site affordable units
for renters at or below 60% of the area median income, meeting the requirement for 15% affordable units for a TIF project. The below-grade garage will have 61 spaces available for
residents. She noted that staff will work with the Federal Transit Authority to seek approval for an
access point from the lower level of the Court Street Transportation Center to the lower level parking in the new building. The third part of the building complex will be two stories, which will
serve as an entry vestibule from the Clinton Street side for both the hotel portion and the
residential portion. Ford shared renderings of this concept with Members and further detailed the various components of the project.
The lower level garage portion will be accessible from the Court Street Transportation Center. The first level, along Gilbert Street will all be retail. The second level will be office space in the
multi-use building, while the second level of the vestibule area will have the outdoor pool. At the east end of this area will be a fitness center and the elevator access to the Transportation Center.
Moving on to the numbers, Ford noted the sources and the uses of funds. She noted the City’s rules regarding TIF that require the developer maximize the amount of debt they can attract to a
project and that when they come to the City, the maximum amount of dollars that they are able to attract from a lending institution, and from their investors, is already determined. The City’s financial support then would be the last dollars in, according to Ford.
For the $40 million Hieronymus Square, Ford stated that developers will secure $22.4 million in
loans. They will put in $10.3 million for equity, and the City would fill the remaining $8 million
gap. Ford then further explained the financial analysis that resulted in this $8 million gap. She detailed timelines for this project to get up and going, and the rationale for a $600,000 TIF
advance. The $600,000 TIF advance would be granted upon completion of the building, thus
mitigating any risk to the City.
Ford talked about how the project aligns with Council’s strategic planning priorities, saying that
the project will bring $22 million to Iowa City’s tax base. The hotel will generate an average of a quarter million dollars in hotel taxes per year. The project will be a critical connection point
between Riverfront Crossings and downtown, promoting a healthier downtown neighborhood due
to the blighted nature of this block for decades. The project encourages a vibrant and walkable core by having the storefront windows on the first floor and by incorporating the setbacks
required in the Riverfront Crossings form based code, making for better walkability along Burlington Street. She said the project will use roof-mounted solar panels and generated more than 38,000 kwh of electricity. Finally, the hotel will achieve a gold level Green Seal certification –
a sustainability program for the hotel industry.
Ford noted that the developers are present if Members wish to ask them questions regarding this
project. Ben Kinseth then spoke briefly to the Members, noting that in regards to the hotel, they believe an extended-stay will do well here as there are none in the immediate area. It also
EDC 9.15.17 packet page 3
EDC July 21, 2017, p. 3
Preliminary
should be a good fit with the existing hotels downtown. Mims stated that she likes the Green Seal certification that the hotel will be seeking. She added that she is very supportive of this
project and is looking forward to having this corner developed. Mims stated that she would like
to see at least two more stories added to the project. Kevin Digmann responded that it’s really more affordable to not do high-rise construction, and that splitting the project apart is more
feasible than going higher. Throgmorton then posed some questions regarding the proposed project. First he asked about
the two renderings he has seen so far, where the hotel is shown differently. Digmann stated that what Ford showed in her presentation is the latest version. Throgmorton also asked if any of this TIF support goes directly to the developers for personal gain, or more precisely, he asked what
the developers’ expected rate of return is on this project. The developer noted that part of the report prepared by staff has a paragraph on each part of the project and what the expected
internal rate of return is. He stated that the numbers the developer shows are well below what
they normally see from a project. Fruin added that from staff’s perspective, the margins are extremely thin on this project. He stated that the National Development Council calculated the
internal rate of return on a mixed-use building to be at 6.42%, which is below what would be
expected in most markets, but that it is within the norm due to the strong market in Iowa City. The hotel portion has a higher rate of return, according to Fruin, around 7.5%. He added that
typically you would expect to see double-digit returns, but that this is reflective of the market.
Throgmorton stated that some people undoubtedly have the perception that the $8 million is
going directly to the developer, and that this is not the case at all. The money is going toward the construction of the building. The developer further explained how the financing works and that they are fully aware they are not being ‘given’ $8 million. Throgmorton then addressed the ‘but
for’ question, which asks of developers: “If it were not for City financing, would this project be built?” The developer responded that it would not and noted the quality design, underground parking and hotel amenities are more expensive than typical buildings and require financial
assistance. Members continued to discuss the issue with Mims noting that even after filling the financial gap
the developer still only realizes a low rate of return -- between 6.4% and 7.5% on the two projects. If the gap isn’t filled, then the rate of return goes down to the point the project will not
go forward. Throgmorton remarked that it is our practice to ensure all other pieces of financing
are in place before City assistance is considered. He added that he was under the impression that the developers have been in discussions with lenders but the lenders have not yet presented
letters commitment or term sheets for the loans they would underwrite. This was confirmed.
Throgmorton then spoke to the estimated $2 million in the gap that is a reflection of the
developers’ cost of financing their loan. He asked if the size and duration of the TIF could be reduced by providing an upfront loan in this instance. Fruin spoke to Throgmorton’s question, noting that the difference between an upfront TIF and a rebate TIF is the transfer of risk. Cole
then noted that he also likes the project. His first question concerned the economics of condos
versus apartments, and he asked if the developers evaluated condos at the northwest corner of the project. Dilkes said that all new apartments are condominiums now. The question is whether
the units will be owner-occupied. Cole stated that he is very pleased there will be solar panels and he asked about the cost of
doing this. The developer stated that when they negotiated and received these numbers, they did not have that cost in their budget. Instead it was something that Fruin requested as plans
progressed. Throgmorton then asked about affordable housing and how many units would be
required. Ford responded, noting the affordable housing requirement in a TIF project is to provide 15% -- or seven units. Throgmorton asked if these units will be provided on site. Fruin
EDC 9.15.17 packet page 4
EDC July 21, 2017, p. 4
Preliminary
noted this is one topic the Council needs to discuss, but that the financial analysis was done with the provision of all seven units being on site. He noted that policies currently in place allow for
‘fee in lieu of’ for projects like this. Fruin stated that should the developers want to have an off-
site location, this would be incorporated into the development agreement, similar to the Augusta Place project. He added that this is one of the first TIF agreements to come before them in
which there is (affordable housing with TIF) policy in place. Dilkes noted for clarification that Augusta Place has six on-site units, in addition to the off-site ones.
Mims said for her it depends on where those off-site units would be located. She noted that in past discussions everyone has agreed that they would like to see affordable units spread throughout the city. Fruin noted that they have contemplated how they would use any fee in lieu
of dollars. The developer spoke to the affordable housing issue as well, noting how it plays out for them and the possibility of having several ways to address the affordable housing
requirement. Cole stated that he really likes what staff has done over the past few years with the
affordable housing policy and that he believes they should trust staff to work with the developers on this issue. Throgmorton stated he supports this project and that it will be a tremendous asset
to the downtown area, especially since this site has been sitting empty for close to 30 years.
Cole echoed Throgmorton’s comments. He believes the extended-stay hotel is a fantastic idea and something they’ve needed downtown for some time now.
Cole moved to recommend to the full City Council support of the Hieronymus Square TIF project.
Throgmorton seconded the motion. The motion carried 3-0.
CONSIDER A RECOMMENDATION TO THE CITY COUNCIL FOR REVISED TIF POLICIES:
Mims suggested a way to proceed through the list quickly: to begin at the end of the list and work
forward. She began the discussion with ‘underwriting and application,’ asking if there were any concerns
and there were none.
‘Other public interests’ was next, again, no changes here.
‘Quality jobs’ is tied to the State’s Laborshed area hourly wage metrics that are periodically
updated, and currently around $20 per hour. Cole asked what the existing standard is compared
to the one they are considering adopting. Mims stated that it would be ratifying the existing standard. Fruin clarified that when they have a project like the one just discussed for
Hieronymus Square, these wage standards do not apply to retail and office jobs. This would more likely come into play with manufacturing jobs.
‘Social justice’ was next. Mims wanted some clarification on item B, asking if it is going to be an
issue for the general contractors. Dilkes stated that she has reviewed this and that she finds no problems with the language.
‘Affordable housing’ - all Members agreed to this section.
‘Historic preservation’ brought some discussion, due to staff’s request for clarification about whether properties noted as “contributing” to the historic area should be held to the same
standards as those that are actually historic. Mims stated that she does not feel contributing
properties should necessarily be included as architecturally significant. She noted Ford’s comments in the staff memo, about writers of the Master Plan having made an exception for
EDC 9.15.17 packet page 5
EDC July 21, 2017, p. 5
Preliminary
contributing properties as a tradeoff for better preservation of historic buildings on Washington Street. Throgmorton agreed, stating that architecturally significant should not include those
properties noted as ‘contributing.’ He added, however, that buildings which replace ‘contributing’
structures should then preserve and enhance the historic character of the block. Ford stated that pages 54-56 of the master plan explain how contributing buildings complement historic context.
Throgmorton then spoke to form-based code, stating that he believes they should initiate the process of developing it. Until such time, however, he would like to make sure they have some way of ensuring that TIF-supported projects don’t radically transform blocks by enabling the
demolition of a significant number of ‘contributing’ structures. Cole stated that he goes back to the Comprehensive Plan with this. He believes it will be very important for them to honor the Comprehensive Plan in its totality. If there are parts of the policy that are inconsistent with it,
then he believes they need to make the policy consistent with the Comprehensive Plan. He stated that they need to address the question of clarifying what a ‘contributing structure’ is.
Referring to the map staff provided combining historic buildings with the desired building heights,
Mims asked if all of the buildings shown in white, without a ‘c’ designation are historic landmarks or eligible structures. Ford affirmed they were. Fruin referred to the [downtown] urban renewal
plan and reminded Members that historic structures have always been protected. Ford explained this map is the same as the Comp Plan building height map, except that both historic and contributing buildings are shown in white – or without a color designating the desired height.
The purpose of creating this map was to show non-historic buildings that would be affected by the desired heights. An update to the map would now include height-designating color on
buildings with a ‘c’ designation, as they would become subject to the desired heights per the
discussion today.
Throgmorton noted the recent letter from the Downtown District, encouraging the committee to
modify regulations to further incentivize accessibility in historic buildings with narrow footprints. He stated that it looks like a good recommendation and he would like to get staff’s reaction to
this. Members discussed the challenges with historic properties and the difficulties contractors can be faced with, such as installing elevators. Fruin noted that elevators are regulated at the state level and that we would need to work with local legislators to try and get revisions made to
allow retrofitting elevators in historic buildings. Throgmorton noted that this may be something
the Metro Coalition would support.
Moving on to ‘sustainability,’ Mims asked if there is a logical reason for them to require LEED Silver in the City-University [downtown] Urban Renewal Area only. Throgmorton suggested that if there is TIF support provided for any residential or mixed-use project, anywhere within the city,
LEED Silver should apply. Mims reiterated that her preference would be to not have LEED Silver absolutely required in any TIF district, but to make it highly preferred or encouraged.
Throgmorton and Cole both stated that they also support requiring at least 8 Energy Efficiency
credits.
The last point, ‘building height and character’ was discussed next. Mims started by recalling the
map of recommended building heights that first appeared in the Riverfront Crossings and Downtown Master Plan, and was later adopted into the Comp Plan. She posited that many community members were not aware of the heights that were recommended in the plan, adding
that she does not believe this map has had the kind of public vetting that it should have in order for the City to codify something such as the TIF policy.
Mims also said that it appears that this is a way to effectively down-zone some properties that may be prime candidates for redevelopment. Throgmorton stated that legally, it does not down-
zone anything. Mims said that she is referring to public perception; that the intent is to restrict
EDC 9.15.17 packet page 6
EDC July 21, 2017, p. 6
Preliminary
the height when there may be the need for financial assistance, such as for a high-rise building project. Mims added that if the goal of the Council is to limit tall buildings on these sites, then
she believes it is a discussion they need to have at the Council level. They could then actually
discuss rezoning those particular properties, if that is the actual goal. If this is not the goal, Mims stated that she does not understand why they would tie TIF dollars to particular heights on
particular parcels. Throgmorton asked if Fruin would provide a brief summary of the memo he had included in the
packet for Members about the consultants work in arriving at the desired heights. Throgmorton said with regard to vetting, the map did appear in the draft plan and that it is not their responsibility to see that people read every single component of the plan. He stated that the
Council at that time did not have a discussion about the plan as a whole. Throgmorton stated they would not be down-zoning anything; rather, they would be exercising the City’s discretion
and judgment about how to use the tax incentives to achieve the objectives contained in the
Comprehensive Plan.
Fruin then reviewed his memo regarding the planning consultants’ recommendations on height.
In a design charette with consultants, the public identified a number of properties as candidates for redevelopment. Consultants focused on those properties and considered existing conditions and zoning constraints to formulate the desired heights. He said he had ask planning staff
particularly, about the example of the law firm building at College and Linn. In this case, a corner building, consultants determined the recommended height by the size of the lot and how much
parking could likely be provided on the lot. Building heights reflect what people said they liked for
building heights and the likelihood of how much parking could be provided on site. Fruin explained the consultants also worked with staff on the details as they were reviewing the draft.
He noted that the map was introduced at a public presentation to roll out the plan at City Hall. It
had been one of four maps displayed on one of several posters for the public to view. Mims noted that parking regulations were one of the factors in the consultant’s height
recommendations and suggested that our parking regulations may be in need of updating; and if so, determining future building heights with outdated parking regulations, may, in a year or two, make no sense. She said TIF should not be tied to height at all.
Cole started talking about the TIF review process that they have been going through for the past year, stating that the notion there hasn’t been enough input does not make sense to him. He
added that they have made all of these meetings public, televised them, and met with many stakeholders involved. Mims interjected, noting that her comment is only about the review and input on the desired building heights map during the Comp Plan process – nothing to do with the
input for the TIF policy review.
Cole went back to the height issue, stating that he believes they have clearly shown the direction
they want to go. He then spoke to the notion that people don’t understand what the Comprehensive Plan is; that they think of it as a regulatory code that they are bound to. He
stated that it is a guide, perhaps an imperfect one, but it is what they have to work with and it has
been through a thorough public process. Cole continued to speak to building height issues.
Throgmorton thanked staff for preparing the new map, adding that it helps him to understand how this policy would likely play out. He questioned when they would provide exceptions to this. Throgmorton stated that he has some textual amendments that he would like to share with Ford
for the TIF Policy revisions. He noted that they do not have time at the meeting to do this, but
that he would prepare a draft for all to see what he is proposing. Members continued to discuss some of the elements on the map.
EDC 9.15.17 packet page 7
EDC July 21, 2017, p. 7
Preliminary
Mims then spoke to Cole’s comment regarding the map having enough public scrutiny before going into the Comp Plan. She stated that to tie something as significant as what properties TIF
might be considered for – would be wrong. Throgmorton asked what Mims would suggest as an
alternative. Mims responded that she does not believe it should be tied to building height at all. She believes in preserving the historic feel of a block. Throgmorton stated that he believes using
the map gives better clarity as to what the Council is looking for. STAFF TIME:
None. COMMITTEE TIME:
None.
OTHER BUSINESS:
None.
ADJOURNMENT:
Cole moved to adjourn the meeting at 10:10 A
Throgmorton seconded the motion. Motion carried 3-0.
Council Economic Development Committee ATTENDANCE RECORD 2016 - 2017
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Rockne Cole 01/02/18 X X X X X X X X X X X X
Susan Mims 01/02/18 X X X X X X X X X X X X
Jim Throgmorton 01/02/18 X X X X X X X X X X X X
Key:
X = Present
O = Absent O/E = Absent/Excused
EDC 9.15.17 packet page 8
Date: September 5, 2017
To: Economic Development Committee
From: Wendy Ford, Economic Development Coordinator
Re: Agenda item #3: TIF Policy Review
At your last City Council Economic Development Committee meeting, July 21, 2017, you refined
elements in the Sustainability, Building Heights & Character and Historic Preservation sections
of the Draft TIF Policies.
On August 4, Jim Throgmorton submitted the changes he had promised for the Building Heights
& Character section at the meeting on the 21st.
The following document incorporates all of those changes and I have attached them in two
formats for your review:
1) as a redlined document so you can easily see and compare changes, and
2) in a clean document without the redlines.
Please let me know if you have any questions.
EDC 9.15.17 packet page 9
DRAFT TIF policies | September 1, 2017 | Page 1
DRAFT Tax Increment Financing (TIF) Policies
City of Iowa City’s Strategic Plan
Alignment with the City’s Strategic Plan will provide the first indicator about whether a project may be
eligible for TIF. To the extent that a project helps achieve the City’s Strategic Plan objectives and is
located within an established Urban Renewal Area (Exhibit A), it may be eligible to be considered for TIF.
2016 – 2017 City of Iowa City Strategic Plan
The Strategic Plan intends to foster a more inclusive, just and sustainable Iowa City
a) Promote a strong and resilient local economy
b) Encourage a vibrant and walkable urban core
c) Foster healthy neighborhoods throughout the City
d) Maintain a solid financial foundation
e) Enhance community engagement and intergovernmental relations
f) Promote environmental sustainability
g) Advance social justice and racial equity
In addition, the City will continue to seek projects that diversify existing uses in the given urban renewal
area. Such projects may include Class A office, hotel, entertainment, and residential uses, provided
market studies and financial analysis support such investment.
Sustainability
New residential, office and mixed use building projects receiving TIF in the entire City-University Project
1 Area (also referred to as Downtown & Riverfront Crossings -- see Exhibit B) shall be certified Silver or
better under the LEED for New Construction Rating System current at the time of design development. Further, at
least 8 points shall be awarded for the the LEED-NC Optimize Energy Performance credit to ensure that TIF projects
help meet the City’s carbon emission reduction goals.
This requirement does not apply to renovation projects or any project outside of the City-University
Project 1 Urban Renewal Area.
TIF projects outside the Downtown and Riverfront Crossings urban renewal area are strongly
encouraged and highly preferred to be Certified LEED Silver or better.
Downtown building heights and character
Applications for TIF support for downtown projects must indicate how the proposed project will help
fulfill the overall vision of the downtown portion of the Downtown and Riverfront Crossings Plan, “to
preserve and enhance the historic buildings and character of Downtown, while encouraging appropriate
infill redevelopment with a mix of building uses.” (p. 18, Downtown and Riverfront Crossings Master
Plan.)
Except under extraordinary circumstances, applicants seeking TIF should ensure that their projects fall
within the Desired Height ranges shown on the Downtown and Riverfront Crossings Master Plan’s
building heights diagram shown on p. 106 of the Plan (Exhibits C and D of this document). The height
considerations shall only apply to area inside the border of Iowa Avenue, Gilbert, Burlington and Clinton
Streets.
Deleted: certified LEED Silver or greater
Deleted: at least 8 LEED certification points shall be earned from the Energy Efficiency point category to ensure
Formatted: Border: Top: (No border), Bottom:(No border), Left: (No border), Right: (Noborder), Tab stops: 3.25", Centered
Moved (insertion) [1]
Deleted: Additionally, a
Deleted: Substantial consideration will be given to
projects where building height
Deleted: s
EDC 9.15.17 packet page 10
DRAFT TIF policies | September 1, 2017 | Page 2
Deviations from the Downtown and Riverfront Crossings Plan’s guidelines shown on p. 56 and the Desired Building Height map (p. 106 of the Plan and Exhbit C, following) may be considered if the applicant demonstrates that 1) the proposed building and uses will help fulfill the overall vision of the Plan by facilitating – architecturally, materially, and/or financially –the preservation and enhancement of adjacent or nearby historic structures, and 2) if the proposed building will provide exceptional public benefits.
Exceptional public benefits are ones that go well beyond what is required by other sections of this
policy, and which advance the City’s strategic plan vision of fostering a more inclusive, just, and
sustainable city. These public benefits may include but are not limited to: (1) high quality / low cost
building design which produces affordable housing and/or affordable retail space for locally-owned
businesses without increasing the financial gap necessitating TIF support; (2) incorporation of attractive
public space that is available and accessible to all city residents; (3) job training and opportunities for
low-income youth; and (4) carbon-neutral LEED Gold or Platinum certification.”
The provisions of this section will apply until such time as a Downtown Form-Based Code is adopted.
Historic preservation
Properties in the downtown area are designated one of three ways:
a) individually eligible/key properties (eligible for the national register of historic places),
b) contributing properties (a contributing property may not have any historic significance in and of
itself, but may lend to the character of a historic district or neighborhood), and
c) non-contributing properties.
New construction requiring the demolition of structures identified as (a) individually eligible, key,
historic and/or architecturally significant is not eligible for tax increment financing. Further, all
rehabilitation to historic or architecturally significant structures shall be done in such a manner as to
preserve or restore any historic structure to productive use. The guidelines for determining if
rehabilitation does preserve or restore the structure shall be those set forth in the 1990 revised edition
of the Secretary of Interior’s Standards for Rehabilitation and Guidelines for Rehabilitating Historic
Buildings. All additions to historically or architecturally significant structures shall be developed in such a
manner as to be architecturally compatible with existing development. (Amendment #9, 2001 City-
University Project 1 Urban Renewal Plan.)
Properties designated contributing are eligible for tax increment financing. Any redevelopment of
contributing properties should preserve and enhance the historic character of the block.
Historic preservation projects may be eligible for TIF funding via district-wide TIF, in order to incentivize
historic renovation projects that may not add enough taxable value to rely solely on the subject
property’s increment.
Affordable housing
TIF projects in any urban renewal area with a residential component as part of the project must provide
a minimum of 15% of the units as affordable to tenants at or below 60% AMI (area median income). If
those housing units are for sale, units will be targeted to households at or below 110% AMI. The City
may require a lower AMI for rental units.
Developers may be eligible to negotiate a fee-in-lieu of providing on site affordable housing, or to
provide affordable housing elsewhere in the community, subject to the City’s sole discretion.
Moved up [1]: Additionally, applications for TIF
support for downtown projects must indicate how
the proposed project will help fulfill the overall
vision of the downtown portion of the Downtown
and Riverfront Crossings Plan, “to preserve and
enhance the historic buildings and character of
Downtown, while encouraging appropriate infill redevelopment with a mix of building uses.” (p. 18, Downtown and Riverfront Crossings Master Plan.)¶
Deleted: Comp Plan guidelines and
Deleted: map
Deleted: preserve and enhance the character of downtown by contributing to
Deleted: /o
Deleted: r
Deleted: public benefit aspects of the project are significant. Significant public benefits may include but are not limited to increased affordable housing,
senior housing development, and LEED Gold or
Platinum certification.
Deleted: in the most recent historic survey is
EDC 9.15.17 packet page 11
DRAFT TIF policies | September 1, 2017 | Page 3
In part, in exchange for the increased density created for the Riverfront Crossings (RFC) zone, any
project with housing in the district, regardless of whether it is a TIF project, must include 10% affordable
housing. TIF policy in the RFC zone is that any financial gap due to affordable housing created by zoning
requirements (10%) is the responsibility of the developer and that affordable housing above the
required 10% in RFC could be TIF eligible, if the financial analysis determines a gap.
Social Justice
The City will not contract with or provide any economic development incentives to any person or entity
who has participated in wage theft by violation of the Iowa Wage Payment Collection law, the Iowa
Minimum Wage Act, the Federal Fair Labor Standards Act (FLSA) or any comparable state statute or local
ordinance, which governs the payment of wages. Misclassification of employees as independent
contractors is a violation of the FLSA and is included in the definition of wage theft.
Development Agreements for TIF projects shall include in the contract for the construction of the
Minimum Improvements, between the Developer and the General Contractor, the following written
provisions, proof of which must be provided to City prior to the start of construction:
a)Agreement by the General Contractor to comply with all state, federal and local laws and
regulations, including, but not limited to the requirements of Iowa Code Chapter 91C (Contractor
Registration with the Iowa Division of Labor), Iowa Code Chapter 91A (Iowa Wage Payment
Collection Law), Iowa Code Chapter 91D (Minimum Wage), the Federal Fair Labor Standards Act, and
the Internal Revenue Code.
b)Agreement by the General Contractor to provide to the Developer and the City no later than the
filing of an application for issuance of a building permit, the names and addresses of each
subcontractor and the dollar value of the work the subcontractor is expected to perform.
c)Demonstration by the General Contractor that it has the capacity to meet all performance, and labor
and material payment, bonding requirements relative to the Minimum Improvements.
d)Providing to the City a certificate by the General Contractor’s insurer that it has in force all insurance
coverage required with respect to construction of the Minimum Improvements.
e)Demonstration by the General Contractor that it has required all subcontractors to agree, in writing,
that the subcontractor will comply with all state, federal and local laws and administrative rules and
regulations, including, but not limited to the requirements of Iowa Code Chapter 91C (Contractor
Registration with the Iowa Division of Labor), Iowa Code Chapter 91A (Iowa Wage Payment
Collection Law), Iowa Code Chapter 91D (Minimum Wage), the Federal Fair Labor Standards Act, and
the Internal Revenue Code.
EDC 9.15.17 packet page 12
DRAFT TIF policies | September 1, 2017 | Page 4
Quality jobs
When a TIF project is based on the creation or retention of jobs, certain wage thresholds must be met to
help ensure the City’s financial participation only serves to increase the average area wage. This policy
does not require that every job associated with a TIF project, such as those that might be created by the
addition of a new retailer in a building, or the construction jobs required to build a TIF project, meet
these standards. Rather, as a policy to incentivize the addition of high paying jobs to the local economy,
a jobs-based TIF incentive would be structured using the thresholds of the State of Iowa High Quality
Jobs Program.
Other Public Interests
Recognizing that some non-profit activity and/or investment in public infrastructure may influence
additional private economic development activity, TIF may be an appropriate tool to further investment
in Iowa City’s cultural and/or natural assets. Understanding that TIF is made possible by the increased
value in real property, and that most cultural organizations and public lands are generally tax exempt, a
TIF project would only be possible by using increment from the district. Examples include:
a)Arts and cultural activities or facilities
b)Historic preservation
c)Public improvements that serve as a catalyst for the economic development of the urban renewal
area
Underwriting and Application
The following policies are designed to provide a consistent and transparent process for the review and
analysis of all applications for TIF assistance.
a)Complete application submission.
b)But for” standard: Each project must demonstrate sufficient need for the City’s financial assistance,
such that without it, the project would not occur. Every other financial piece of the project must be
in place prior to the consideration of TIF. TIF assistance will be used as gap financing as determined
through gap analysis.
c)Method of TIF financing: The City reserves the right to determine the method of TIF financing that is
in the best interests of the taxpayer. As such, the City strongly prefers the use of TIF rebates over
the shortest term possible.
d)Developer equity: Developer Equity must be equal to or greater than City funding. TIF assistance
shall not exceed the amount of equity provided by the Developer. Equity is defined as cash,
unleveraged value in land, or prepaid costs attributable to the project.
e)Project based TIF: TIF for private developments must generate TIF increment sufficient to be self-
supporting. Only in exceptional cases, will the City consider using district-wide increment.
EDC 9.15.17 packet page 13
DRAFT TIF policies | September 1, 2017 | Page 5
Exhibit A Urban Renewal Areas Enabling Tax Increment Financing
EDC 9.15.17 packet page 14
DRAFT TIF policies | September 1, 2017 | Page 6
Exhibit B City-University Project 1 Urban Renewal Area
EDC 9.15.17 packet page 15
DRAFT TIF policies | September 1, 2017 | Page 7
Exhibit C
Downtown and Riverfront Crossings Master Plan Building Heights diagram
EDC 9.15.17 packet page 16
DRAFT TIF policies | September 1, 2017 | Page 8
Exhibit D Downtown and Riverfront Crossings Master Plan Building Heights diagram
EDC 9.15.17 packet page 17
Un-redlined text of previous document follows
EDC 9.15.17 packet page 18
DRAFT TIF policies | September 1, 2017 | Page 1
DRAFT Tax Increment Financing (TIF) Policies
City of Iowa City’s Strategic Plan
Alignment with the City’s Strategic Plan will provide the first indicator about whether a project may be
eligible for TIF. To the extent that a project helps achieve the City’s Strategic Plan objectives and is
located within an established Urban Renewal Area (Exhibit A), it may be eligible to be considered for TIF.
2016 – 2017 City of Iowa City Strategic Plan
The Strategic Plan intends to foster a more inclusive, just and sustainable Iowa City
a)Promote a strong and resilient local economy
b)Encourage a vibrant and walkable urban core
c)Foster healthy neighborhoods throughout the City
d)Maintain a solid financial foundation
e)Enhance community engagement and intergovernmental relations
f)Promote environmental sustainability
g)Advance social justice and racial equity
In addition, the City will continue to seek projects that diversify existing uses in the given urban renewal
area. Such projects may include Class A office, hotel, entertainment, and residential uses, provided
market studies and financial analysis support such investment.
Sustainability
New residential, office and mixed use building projects receiving TIF in the entire City-University Project
1 Area (also referred to as Downtown & Riverfront Crossings -- see Exhibit B) shall be certified Silver or
better under the LEED for New Construction Rating System current at the time of design development. Further, at
least 8 points shall be awarded for the the LEED-NC Optimize Energy Performance credit to ensure that TIF projects
help meet the City’s carbon emission reduction goals.
This requirement does not apply to renovation projects or any project outside of the City-University
Project 1 Urban Renewal Area.
TIF projects outside the Downtown and Riverfront Crossings urban renewal area are strongly
encouraged and highly preferred to be Certified LEED Silver or better.
Downtown building heights and character
Applications for TIF support for downtown projects must indicate how the proposed project will help
fulfill the overall vision of the downtown portion of the Downtown and Riverfront Crossings Plan, “to
preserve and enhance the historic buildings and character of Downtown, while encouraging appropriate
infill redevelopment with a mix of building uses.” (p. 18, Downtown and Riverfront Crossings Master
Plan.)
Except under extraordinary circumstances, applicants seeking TIF should ensure that their projects fall
within the Desired Height ranges shown on the Downtown and Riverfront Crossings Master Plan’s
building heights diagram shown on p. 106 of the Plan (Exhibits C and D of this document). The height
considerations shall only apply to area inside the border of Iowa Avenue, Gilbert, Burlington and Clinton
Streets.
EDC 9.15.17 packet page 19
DRAFT TIF policies | September 1, 2017 | Page 2
Deviations from the Downtown and Riverfront Crossings Plan’s guidelines shown on p. 56 and the
Desired Building Height map (p. 106 of the Plan and Exhbit C, following) may be considered if the
applicant demonstrates that 1) the proposed building and uses will help fulfill the overall vision of the
Plan by facilitating – architecturally, materially, and/or financially –the preservation and enhancement
of adjacent or nearby historic structures, and 2) if the proposed building will provide exceptional public
benefits.
Exceptional public benefits are ones that go well beyond what is required by other sections of this
policy, and which advance the City’s strategic plan vision of fostering a more inclusive, just, and
sustainable city. These public benefits may include but are not limited to: (1) high quality / low cost
building design which produces affordable housing and/or affordable retail space for locally-owned
businesses without increasing the financial gap necessitating TIF support; (2) incorporation of attractive
public space that is available and accessible to all city residents; (3) job training and opportunities for
low-income youth; and (4) carbon-neutral LEED Gold or Platinum certification.”
The provisions of this section will apply until such time as a Downtown Form-Based Code is adopted.
Historic preservation
Properties in the downtown area are designated one of three ways:
a) individually eligible/key properties (eligible for the national register of historic places),
b) contributing properties (a contributing property may not have any historic significance in and of
itself, but may lend to the character of a historic district or neighborhood), and
c) non-contributing properties.
New construction requiring the demolition of structures identified as (a) individually eligible, key,
historic and/or architecturally significant is not eligible for tax increment financing. Further, all
rehabilitation to historic or architecturally significant structures shall be done in such a manner as to
preserve or restore any historic structure to productive use. The guidelines for determining if
rehabilitation does preserve or restore the structure shall be those set forth in the 1990 revised edition
of the Secretary of Interior’s Standards for Rehabilitation and Guidelines for Rehabilitating Historic
Buildings. All additions to historically or architecturally significant structures shall be developed in such a
manner as to be architecturally compatible with existing development. (Amendment #9, 2001 City-
University Project 1 Urban Renewal Plan.)
Properties designated contributing are eligible for tax increment financing. Any redevelopment of
contributing properties should preserve and enhance the historic character of the block.
Historic preservation projects may be eligible for TIF funding via district-wide TIF, in order to incentivize
historic renovation projects that may not add enough taxable value to rely solely on the subject
property’s increment.
Affordable housing
TIF projects in any urban renewal area with a residential component as part of the project must provide
a minimum of 15% of the units as affordable to tenants at or below 60% AMI (area median income). If
those housing units are for sale, units will be targeted to households at or below 110% AMI. The City
may require a lower AMI for rental units.
EDC 9.15.17 packet page 20
DRAFT TIF policies | September 1, 2017 | Page 3
Developers may be eligible to negotiate a fee-in-lieu of providing on site affordable housing, or to
provide affordable housing elsewhere in the community, subject to the City’s sole discretion.
In part, in exchange for the increased density created for the Riverfront Crossings (RFC) zone, any
project with housing in the district, regardless of whether it is a TIF project, must include 10% affordable
housing. TIF policy in the RFC zone is that any financial gap due to affordable housing created by zoning
requirements (10%) is the responsibility of the developer and that affordable housing above the
required 10% in RFC could be TIF eligible, if the financial analysis determines a gap.
Social Justice
The City will not contract with or provide any economic development incentives to any person or entity
who has participated in wage theft by violation of the Iowa Wage Payment Collection law, the Iowa
Minimum Wage Act, the Federal Fair Labor Standards Act (FLSA) or any comparable state statute or local
ordinance, which governs the payment of wages. Misclassification of employees as independent
contractors is a violation of the FLSA and is included in the definition of wage theft.
Development Agreements for TIF projects shall include in the contract for the construction of the
Minimum Improvements, between the Developer and the General Contractor, the following written
provisions, proof of which must be provided to City prior to the start of construction:
a) Agreement by the General Contractor to comply with all state, federal and local laws and
regulations, including, but not limited to the requirements of Iowa Code Chapter 91C (Contractor
Registration with the Iowa Division of Labor), Iowa Code Chapter 91A (Iowa Wage Payment
Collection Law), Iowa Code Chapter 91D (Minimum Wage), the Federal Fair Labor Standards Act, and
the Internal Revenue Code.
b) Agreement by the General Contractor to provide to the Developer and the City no later than the
filing of an application for issuance of a building permit, the names and addresses of each
subcontractor and the dollar value of the work the subcontractor is expected to perform.
c) Demonstration by the General Contractor that it has the capacity to meet all performance, and labor
and material payment, bonding requirements relative to the Minimum Improvements.
d) Providing to the City a certificate by the General Contractor’s insurer that it has in force all insurance
coverage required with respect to construction of the Minimum Improvements.
e) Demonstration by the General Contractor that it has required all subcontractors to agree, in writing,
that the subcontractor will comply with all state, federal and local laws and administrative rules and
regulations, including, but not limited to the requirements of Iowa Code Chapter 91C (Contractor
Registration with the Iowa Division of Labor), Iowa Code Chapter 91A (Iowa Wage Payment
Collection Law), Iowa Code Chapter 91D (Minimum Wage), the Federal Fair Labor Standards Act, and
the Internal Revenue Code.
EDC 9.15.17 packet page 21
DRAFT TIF policies | September 1, 2017 | Page 4
Quality jobs
When a TIF project is based on the creation or retention of jobs, certain wage thresholds must be met to
help ensure the City’s financial participation only serves to increase the average area wage. This policy
does not require that every job associated with a TIF project, such as those that might be created by the
addition of a new retailer in a building, or the construction jobs required to build a TIF project, meet
these standards. Rather, as a policy to incentivize the addition of high paying jobs to the local economy,
a jobs-based TIF incentive would be structured using the thresholds of the State of Iowa High Quality
Jobs Program.
Other Public Interests
Recognizing that some non-profit activity and/or investment in public infrastructure may influence
additional private economic development activity, TIF may be an appropriate tool to further investment
in Iowa City’s cultural and/or natural assets. Understanding that TIF is made possible by the increased
value in real property, and that most cultural organizations and public lands are generally tax exempt, a
TIF project would only be possible by using increment from the district. Examples include:
a) Arts and cultural activities or facilities
b) Historic preservation
c) Public improvements that serve as a catalyst for the economic development of the urban renewal
area
Underwriting and Application
The following policies are designed to provide a consistent and transparent process for the review and
analysis of all applications for TIF assistance.
a) Complete application submission.
b) But for” standard: Each project must demonstrate sufficient need for the City’s financial assistance,
such that without it, the project would not occur. Every other financial piece of the project must be
in place prior to the consideration of TIF. TIF assistance will be used as gap financing as determined
through gap analysis.
c) Method of TIF financing: The City reserves the right to determine the method of TIF financing that is
in the best interests of the taxpayer. As such, the City strongly prefers the use of TIF rebates over
the shortest term possible.
d) Developer equity: Developer Equity must be equal to or greater than City funding. TIF assistance
shall not exceed the amount of equity provided by the Developer. Equity is defined as cash,
unleveraged value in land, or prepaid costs attributable to the project.
e) Project based TIF: TIF for private developments must generate TIF increment sufficient to be self-
supporting. Only in exceptional cases, will the City consider using district-wide increment.
EDC 9.15.17 packet page 22