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HomeMy WebLinkAbout07-01-24 Council EDC Agenda PacketCity Council Economic Development Committee Monday, July 1, 2024 3:30 PM City Manager's Conference Room City Hall, 410 E. Washington AGENDA 1. Call to order 2. Elect Chairperson 3. Consider minutes of the September 25, 2023 Economic Development Committee Meeting 4. Review Committee purpose & Iowa Open Meeting Law 5. Consider recommendation to full City Council for approval of updated Economic Development Policy 6. Update from Greater Iowa City, Inc. 7. Old or New Business 8. Adjournment If you will need disability -related accommodations in order to participate in this program/event, please contact Rachel Kilburg Varley, Economic Development Coordinator at 319-356-5248 or rkilburg@iowo- city.org. Early requests are strongly encouraged to allow sufficient time to meet your access needs. EDC minutes September 25, 2023 - p.I PRELIMINARY MINUTES CITY COUNCIL ECONOMIC DEVELOPMENT COMMITTEE September 25, 2023 EMMA HARVAT HALL, 8:00 A.M. Members Present: Laura Bergus, Megan Alter, John Thomas Members Absent: Staff Present: Rachel Kilburg, Redmond Jones, Eric Goers, Others Present: Beth Meyer, Entrepreneurial Development Center, Inc.; Michelle Higgins, AugmENT; Tracy Jon Sargent, Multicultural Development Center of Iowa, John Schickedanz, Englert Theatre; Andrew Sherburne, FilmScene; Adam Knight, Riverside Theatre, Lisa Barnes, Summer of the Arts; Judith Leavitt, Iowa City UNESCO City of Literature Recommendations to council: Thomas moved, Alter second a motion to approve the minutes of the November 29, 2022 meeting. Motion passed (3-0). Thomas moved, Alter seconded a motion to approve a recommendation to the full council for $25,000 to Entrepreneurial Development Center, Inc. and $25,000 to the Multicultural Development Center of Iowa. Motion passed (3-0). Alter moved, Thomas seconded a motion to approve a recommendation to the full council for $32,000 for FilmScene, $20,000 for Riverside Theatre, and $67,000 for Summer of the Arts. Motion passed (3-0). Alter moved, Thomas seconded a motion to approve a recommendation to the full council for $70,000 for the Englert Theatre. Motion passed (2-0, Bergus recused). Bergus moved, Thomas seconded a motion to approve a recommendation to the full council for $60,000 for the Iowa City UNESCO City of Literature. Motion passed (2-0, Alter recused). Call meeting to order: Laura Bergus called the meeting to order at 8:01 A.M. Consider aooroval of minutes from the November 29. 2022 Economic Develooment Committee meeting Thomas moved, Alter seconded a motion to approve the minutes of the November 29, 2022 meeting. Motion passed (3-0). Consider FY25 budget recommendation to full City Council for Community Development Assistance funding for business development organizations: Kilburg provided a brief introduction to the process, explaining these business development and arts and culture organizations are invited to present their funding requests to the Council Economic Development Committee each year. Kilburg shared that almost all of the organizations had expressed EDC minutes September 25, 2023 - p.2 PRELIMINARY a need for increased funding this year, and she in turn described the fiscal challenges and budget uncertainties facing the City. She shared that staff's recommendation maintains stable funding levels, but the organizations were encouraged to be candid in their requests. Kilburg welcomed Beth Meyer, VP of Marketing, and Michelle Higgins, client, representing the Entrepreneurial Development Center, Inc. (EDC, Inc.). Meyer explained that EDC, Inc. works with interstate commerce entrepreneurs, start-ups, and matures business owners looking to scale. Meyer introduced Higgins, a client of EDC, Inc. and founder of AugmENT to provide her perspective on how EDC, Inc. supported her business' growth. Higgins shared that she came with the idea for ear, nose, throat surgery simulators during her time in medical school and EDC, Inc. assisted her with developing her idea, preparing to launch, product development, raising capital, marketing, and product packaging and presentation. Meyer shared that most clients they work with are generated through referrals, but they are always looking to work with more. Alter expressed her desire to see EDC, Inc. take a more proactive approach to working with entrepreneurs and start-ups with diverse backgrounds and asked Meyer to speak to their current efforts on that front. Meyer said a new focus of their organization is increasing capacity to actively seek out and recruit more diverse entrepreneurs and business owners. Bergus asked Kilburg when the property tax rollback rate will be set. Kilburg shared that those are typically published in November, and that there is flexibility in the budget process timeline depending on how they want to handle today's recommendations. Meyer expressed appreciation for the City's support and the Committee thanked Meyer and Higgins. Tracy Jon Sargent, Executive Director of the Multicultural Development Center of Iowa (MDC), was invited to the microphone. Sargent shared they have assisted more than 60 businesses over the past two years and are entirely volunteer -led so no funding is used for staff costs, which does introduce some challenges with consistency and availability. Sargent noted a few highlights from the provided impact report, mentioned their new micro -financing program, and described how MDC Iowa provides ongoing support to clients to help them anticipate future needs and build connections and capacity. Sargent shared that 85-95% of the organization is led by people of color and participants have shared how appreciative they are to work with people who look like them and share similar cultural backgrounds and perspectives. Almost of all of incoming revenue is returned to support businesses through technical assistance. Alter asked how the organization is building capacity with such limited volunteer staff. Sargent described a partnership with Iowa Community Capital and mentioned how a few board members and volunteers have been able to step up as business coaches and mentors. Sargent said they are trying to identify new resources but are sensitive to bringing in partners who may circumvent the trust and relationship MDC Iowa has already built with clients. Bergus asked Sargent about their process to become a CDFI. Sargent described challenges with being an affiliate to another loan committee and the traditional approach to underwriting and explained that obtaining CDFI status may help them overcome those barriers and tap into additional funding. In the meantime, the organization is laying down the foundation to begin providing micro -loans. Bergus asked Committee members whether they were inclined to support staff's funding recommendation. Thomas stated he is but would like to revisit as some of the budget uncertainties play out over the course of the budget process. Alter agreed. Bergus noted there may be some overlap or collaboration as the American Rescue Plan Act (ARPA) funded underestimated business support recommendations are rolled out. With the understanding that they will revisit the funding recommendations during the City Council budget meetings, Thomas moved and Alter seconded a motion to approve a recommendation to the full council for $25,000 to Entrepreneurial Development Center, Inc. and $25,000 to the Multicultural Development Center of Iowa. Motion passed (3-0). EDC minutes September 25, 2023 - p.3 PRELIMINARY Consider FY25 budget recommendation to full City Council for Community Development Assistance funding for arts and culture organizations: Kilburg welcomed John Schickedanz, Executive Director of the Englert Theatre. Bergus recused herself due to a potential conflict of interest. Schickedanz noted that following the pandemic, the Englert had reduced ticketed events by about 30% and offered more community and free events, which reduced the organization's earned income. Meanwhile, the Englert assessed programmatic needs in the community and centered their focus on diversity. As a result, the organization will be prioritizing diversity in administration, leveraging partnerships, and hiring the first community engagement position in partnership with FilmScene. Schickedanz also noted shifts in audience demographics and how the organization is pivoting to support new, more diverse audiences and programming. Alter asked Schickedanz to expand upon how the core audience has changed and he noted how they largely lost an older demographic post -pandemic and when they do see that core audience return, there are younger, and more diverse audience members intermixed. It has been a learning curve to project performance and metrics of programming due to these new audience profiles. Next, Kilburg introduced Andrew Sherburne, Executive Director and Co -Founder of FilmScene. Sherburne noted his appreciation for the City's support and acknowledged current financial challenges, and also felt an increased funding request was needed. Sherburne mentioned FilmScene is ten years old and, like the Englert, programming has needed to shift significantly post -pandemic due to changes in audiences. When faced with the fiscal need to either scale back or grow, they chose to go bigger. FilmScene has increased payroll and staffing by about 15% since last year, including the community engagement partnership with Englert. Overall attendance has increased nearly 50%, but revenue has only increased approximately 33% since they are offering more pay -what -you -can and free community programming in an effort to be more inclusive. This is particularly notable since national box office trends have been flat year -over -year. Finally, Sherburne noted since they launched ten years ago, FilmScene's budget has grown fivefold, increased from one to six screens, and added a film festival; all of which is estimated to result in an over $2 million local economic impact each year. Alter asked what budget changes FilmScene is making to address some of the challenges and opportunities Sherburne described. Sherburne noted the hiring of a Membership & Development Director and new changes to the membership model will help sustain the organization's financial health while also maintaining the focus on inclusion of all. In light of the growth the organization is experiencing, Bergus asked Sherburne what he projects the upper limit to be. He shared that the industry overall is still recovering and there is more opportunity to expand reach into the community. Thomas noted his appreciation for the organization's focus on public engagement. Kilburg welcomed Adam Knight and Kathleen Johnson from Riverside Theater. Knight reported the Theatre served around 10,000 patrons in 2022-2023 and highlighted some of the performances they offered over the past year, including the free Shakespeare programming in Lower City Park. Knight discussed Riverside's unique regional role in both production and employing union artists as well as Riverside's priority to support diversity and gender parity among their local artists and performers. Last year, BIPOC performers made up 30% of all hires and 57% were female identifying. Knight also shared that 85% of all hires are local and out-of-town hires bolster the local economy by spending on accommodation, dining out, and more. Knight explained how many community theatres are in crisis and forced to close their doors, and described some of the operational budget cuts Riverside has made alongside targeted investments in area education which will grow Riverside's reach. City funding accounted for 5% of Riverside's annual budget in 2019 and now equates to approximately 2.5%. Alter appreciated Knight's points about Riverside's ability to maintain the balance between advancing economic impact in an inclusive, equity -forward way. Bergus asked how Riverside may affected by some of the challenges other small theatres are suffering from. Knight shared that they are in a better position than many theatres because they proactively made changes to their membership, EDC minutes September 25, 2023 - p.4 PRELIMINARY intentionally employed artists who are reflective of their communities, and benefit from an open- minded audience in Iowa City. However, costs for supplies and materials are increasing without proportionate audience and revenue growth. Next, Kilburg welcomed Lisa Barnes, Executive Director of Summer of the Arts (SoTA). Barnes noted 2023 marked the 401h anniversary of the Arts Festival, 30'h anniversary of the Friday Night Concert Series, and 32"d year of the Jazz Festival. However, unlike other arts organizations, SoTA does not sell tickets for revenue and face many financial risks with outdoor events and potential weather impacts. They continue to offer free events and expand partnerships and programming into the neighborhoods and new areas of the community. SoTA has also strived to diversify programming, genres, and performers. Barnes explained the increased funding request would support a new, ongoing concert series in Riverfront Crossings Park, in collaboration with Iowa City Parks & Recreation. Alter expressed her appreciation for SoTA's focus on continuous improvement to reflect community needs and Thomas commented on how important the neighborhood programming is. Finally, Kilburg introduced Judith Leavitt with the Iowa City UNESCO City of Literature. John Kenyon, Executive Director, was not able to attend. Alter recused herself due to being on the Board of Directors. Leavitt discussed the impact of the One Book, Two Book festival, Music IC program, Poetry in Public, and the Iowa City Book Festival. She also reported that the City's UNESCO designation was recently renewed and Executive Director John Kenyon serves as the coordinator for the UNESCO City of Literature network and has conducted extensive networking with other locations sharing the designation. Leavitt noted staff capacity is a challenge and that the organization will be embarking upon a new strategic planning effort to evaluate local, state, national, and international partnerships, areas of priority, and how to improve diversity and inclusivity. Bergus asked for information on how the organization is extending programming out into neighborhoods and throughout the community. Leavitt noted Poetry in Public is one way and will ask Kenyon to follow-up. Given the two recusals, City Attorney Eric Goers suggested the Committee consider recommendations for FilmScene, Riverside, and SoTA first, followed by the remaining two organizations with the respective members recusing. Bergus agreed and reviewed the funding requests for the first three organizations: FilmScene received $32,000 last year and is requesting $40,000; Riverside Theatre received $20,000 last year and is requesting $30,000; and Summer of the Arts received $67,000 last year and is requesting $70,350. Thomas stated he is inclined to support staff's recommendation for stable funding levels, but would like to revisit later in the budget process. Alter asked staff what ARPA funds had been dedicated to arts and tourism and whether it had all been exhausted. Kilburg responded that 'Small Business, Arts, Culture, and Tourism' was one of the initial spending priorities set by the City Council and some expenditures have been made addressing these priorities, but there are not necessarily ARPA funds assigned to the category and there are unspent ARPA dollars remaining. Bergus noted that it is helpful to hear specific uses for increased funding requests. She also stated there is an opportunity to evaluate this funding wholistically in the future and is inclined to vote with staff recommendation at this time. Alter reiterated Bergus' comment that it is helpful if the organizations can tie increased requests to a specific need or use and indicated her support to vote in line with the staff recommendation. Similar to the business support recommendation, the committee members expressed a desire to again revisit these funding levels later in the budget process when more certainty on the City's financial position is known. EDC minutes September 25, 2023 - p.5 PRELIMINARY Alter moved and Thomas seconded a motion to approve a recommendation to the full council for $32,000 for FilmScene, $20,000 for Riverside Theatre, and $67,000 for Summer of the Arts. Motion passed (3-0). Bergus recused herself. Thomas brought forward the requested and recommended $70,000 for the Englert Theatre. Alter moved and Thomas seconded a motion to approve a recommendation to the full council for $70,000 for the Englert Theatre. Motion passed (2-0, Bergus recused). Alter recused herself. Bergus brought forward the requested and recommended $60,000 for the Iowa City UNESCO City of Literature. Bergus moved and Thomas seconded a motion to approve a recommendation to the full council for $60,000 for the Iowa City UNESCO City of Literature. Motion passed (2-0, Alter recused). Staff Report Staff provided an update on economic development -related ARPA investments. First, Kilburg reported on the City's agreement with the University of Iowa Labor Center for a Pre -Apprenticeship Program serving underrepresented populations in the skilled construction trades. The Center conducted extensive outreach and engagement and have 32 people registered for the fall cohort, all of whom represent populations which are considered underrepresented in the construction trades. Next, Deputy City Manager Redmond Jones provided an update on the $4 million ARPA Underestimated Business Support program. Jones reviewed the application process in which applicants were invited to submit a statement of need in the areas of physical space or business support serving underestimated businesses and entrepreneurs. He reported 31 applications were received, totaling approximately $26 million in requests. A review committee consisting of City staff and a City Council representative reviewed applications, met with applicants, and sought to encourage partnerships. A preliminary funding recommendation is expected to be delivered to City Council by November. Bergus asked whether the Council Economic Development Committee would play a role in the process going forward. Jones responded that recommendations will go directly to City Council and staff intend to remain involved with the awarded applicants to connect them with technical assistance or other resources needed to implement projects and ensure sustainability beyond the exhaustion of ARPA funding. Kilburg noted that if it is the Committee's desire, discussion of the overall inclusive economic development strategy could be a future agenda item. Alter asked Jones how the push for collaboration impacted final project recommendations. Jones explained that through the process, there have not been major changes to initial project requests and that partnerships may continue to emerge in the future, even if they were not able to materialize through this process. Kilburg also noted staff are in conversation with the two SSMIDs to discuss how an ARPA award could be used to benefit their district priorities. Alter noted some concerns had been raised about providing equivalent funding levels due to the size of each and Kilburg said the use of funds may be very different between the two districts and so appropriate funding levels will be fleshed out as uses are determined. Finally, Kilburg reviewed the projected process and timeline for developing the 21 S. Linn Street property, which is a project that typically would come to the City Council Economic Development EDC minutes September 25, 2023 - p.6 PRELIMINARY Committee. This will kick off with a review of prior similar process with the full City Council in November or December. Other Business None Adjournment Alter moved, Thomas seconded that the meeting be adjourned. Motion carried (3-0) EDC minutes September 25, 2023 - p.7 PRELIMINARY Council Economic Development Committee ATTENDANCE RECORD 2020-23 TERM 12/09/20 10/27/21 10/19/22 11/29/22 9/25/23 NAME EXP. Megan Alter 01/02/24 --- --- X X X Laura Ber us 01/02/24 --- --- X X X John Thomas 01/02/24 X X X X X Susan Mims 01/02/22 X X --- --- --- Mazahir Salih 01/02/22 O/E X --- --- --- Key: X = Present O = Absent --- = not a member O/E = Absent/Excused TIF Policy I DRAFT June 27, 2024 1 Page 1 1 � : '^ r'M CITY OF IOWA CITY UNESCO CITY OF LITERATURE Tax Increment Financing (TIF) Policy Tax Increment Financing (TIF) is a tool to provide financial assistance for projects within a designated urban renewal area and TIF District. Iowa City's use of TIF is intended to remove slum and blight and/or advance economic development by encouraging residential, commercial, or industrial development in line with this policy document. 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 (Exhibits A, B), it may be eligible to be considered for TIF. The City of Iowa City's current Strategic Plan priorities are attached as Exhibit C. The full plan can be found online at www.icgov.org/strateaicplan. TIF support for projects located in the Downtown or Riverfront Crossings must also demonstrate alignment with the Downtown and Riverfront Crossings Master Plan. Recognizing that some minimal or non -tax -generating 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 public infrastructure, arts and cultural, recreational, historic, and/or natural assets. The City may utilize TIF to improve or develop new public infrastructure and/or other amenities and uses that further goals and objectives in other adopted planning documents, including but not limited to, the Comprehensive Plan, Urban Renewal Area plans, Climate Action plans, Affordable Housing plans, and public facility and recreation plans. Understanding that TIF is made possible by the increased value in real property, and that many of these economic activity generators are tax exempt, a TIF project that advances these public interests would only be possible by using existing, district -wide increment. Additionally, catalyst projects that encourage additional unsubsidized private development in an Urban Renewal Area, either directly or indirectly, may be given special consideration for TIF incentives. Climate Action and Resilience The City of Iowa City has established goals and a Climate Action Plan to reduce community -wide carbon emissions by 45%from 2010 levels by 2030 and achieve net -zero carbon emissions by 2050. In order to aid the City in meeting climate action and resilience goals, projects should clearly demonstrate leadership in sustainable development. This may include one or more of the following: • Achieving LEED Silver or greater certification for new commercial, mixed -use or residential construction; or certifying in other proven sustainable building rating systems or environmental management standards (subject to City approval). • Demonstrating notable performance above the adopted Energy Code. • Full building electrification, including designs promoting EV-readiness, and utilization of on -site renewable energy. TIF Policy I DRAFT June 27, 2024 1 Page 2 • Excellent inventory and/or impact results demonstrated by a comprehensive and reputable Life Cycle Assessment (LCA). This may include innovative adaptive reuse and historic preservation efforts. • Decarbonization strategies that exceed building and energy code requirements. The City will work in partnership with the project developer to ensure each project has a tailored strategy that demonstrates leadership in climate action and resilience. Historic Preservation TIF-supported projects located in historic districts should increase the diversity and vibrancy of the district, while also preserving and enhancing the historic character. Building design should be contextual to the area and complement the historic character of the district. This may be achieved through design considerations such as size, form, materials, and engaging pedestrian -level streetscape. Historic preservation projects may be eligible for TIF funding from district -wide increment to incentivize historic renovation projects that may not add enough taxable value to rely solely on the subject property's increment. New construction that will necessitate the demolition of historic structures is not eligible for tax increment financing. 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 rental units as affordable to tenants at or below 60% AMI (area median income) for a minimum 20-year compliance period. If those housing units are for sale, 15% of the units must be targeted to households at or below 110%AMI. 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 exchange for the increased density allowed in 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. Economic 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, workplace safety, child labor, or other labor laws. 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, written provisions requiring compliance with all state, federal, and local laws and regulations governing wages, child labor, workplace safety, and other labor laws, proof of which must be provided to TIF Policy I DRAFT June 27, 2024 1 Page 3 City prior to the start of construction .Additionally, the General Contractor of a TIF-supported project will be required to provide the Developer and City, no later than the filing of an application for a building permit, a list of the names and addresses of each subcontractor and the dollar value of the work the subcontractor is expected to perform. 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 or retention 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. Underwriting and Application The following criteria are designed to provide a consistent and transparent process for the review and analysis of all applications for TIF assistance. a) Application: Developer must submit a complete application. b) "But For" Test: TIF support tied directly to private projects must meet a "but for" standard. That is, each project must sufficiently demonstrate need for the City's financial assistance, such that without it, the project would not occur. TIF assistance in the form or rebates will be used as gap financing as determined through a gap analysis. The City may enlist third party support to review private project financials and evaluate the need for TIF. Use of a third party is not anticipated when TIF is being utilized to rebate costs of public infrastructure, state and federally -supported affordable housing projects, and projects that support non -property tax generating economic activity. c) Structure of TIF financing: The City reserves the right to determine the method of TIF financing that is in the best interests of the City. This includes variables such as the percentage of increment utilized, maximum rebate amount, and maximum term. d) Developer equity: For private development projects, 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. TIF Policy I DRAFT June 27, 2024 1 Page 5 Exhibit B City -University Project 1 Urban Renewal Area UrbanCity-University Project 1 As Amended o❖., WASHIRETRIR RTLE MIEST EENTON IT DOUG,AE5 IT r� Urban renewal Y� 1969 Original Area 2001 Amended Area //.2012 Am nded Area� .... Yam% TIF Policy I DRAFT June 27, 2024 1 Page 6 Exhibit C City of Iowa City FY2023-2028 Strategic Plan The full Strategic Plan document is available online at www.icgov.org/StrategicPlan. VALUES • Racial Equity, Social Justice & Human Rights: We prioritize diversity, equity, and inclusion, eliminatination of systemic barriers, and facilitating equal access for all. • Climate Action: We are leaders in reducing greenhouse gas emissions and adopt sustainable energy, transportation, land, and water practices. • Partnerships & Engagement: We are transparent and foster trust, involve the public in decision - making, and offer facilities and services that foster community connection. IMPACT AREAS & STRATEGIES Neighborhoods & Housing • Update City Comprehensive Plan and Zoning Code to encourage compact neighborhoods with diverse housing types and land uses. • Partner in projects that serve as models for desired future development. • Create inviting and active outdoor spaces with unique and engaging recreation offerings. • Address the unique needs of vulnerable populations and low to moderate -income neighborhoods. Mobility • Expand the access and convenience of environmentally friendly and regionally connected public transit. • Design and maintain complete streets that are comfortable and safe for all users. • Grow and prioritize bike and pedestrian accommodations. Economy • Reinforce Iowa City as a premier community to locate and grow a business. • Ensure appropriate infrastructure is in place for future business growth and development. • Cultivate a strong entrepreneurial and small businesses ecosystem with a focus on creating new pathways to success for marginalized populations. • Build Iowa City's image as the Greatest Small City for the Arts. • Strengthen the Iowa River's role as a signature community amenity and tourism generator. Safety & Well -Being • Implement and expand innovative public safety models and facilities to improve outcomes and relationships within the community. • Partner with non -profits to address the most emergent and foundational community safety and well-being needs. • Build community by fostering social connections and developing safe, accessible public spaces for gathering. TIF pelicie Policy l DRAFT I � � way CITY OF IOWA CITY UNESCO CITY OF LITERATURE Tax Increment Financing (TIF) PoNG eaPolicv Formatted: Left 1', Right 1', Top: 1', Bottom: 1', Section start New page, Footer distance from edge: 0' Tax Increment Financing (TIF) is a tool to provide financial assistance for projects within a designated Formatted: Font Calibri, 11 pt urban renewal area and 71F District. Iowa City's use of TIF is intended to remove slum and blight Formatted: Indent Left 0.11', Right: 0.11', Space and/or advance economic development by encouraging residential, commercial, or industrial Before: 0 pt development in line with this policy document., Formatted: Font Not Bold 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 (Exhibits A_B-A), it may be eligible to be considered for TIF. The Citv of Iowa Citv's current Strateeic Plan priorities are attached as Exhibit C. The full plan can be found online a Qwww.icgov.orx/strategicplan. TIF support for projects located in the Downtown or Riverfront Crossines must also demonstrate alignment with the Downtown and Riverfront Crossings Master Plan Recognizing that some minimal or non -tax -generating mea-ereiEEactivity 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 puhljc infrastructure. arts and cultural recreational. historic. and/or natural assets. L^ -�a'..r�.t.e..—..'--, •`-7he City • 'II sent Rue te ^^-` ^-^'--'- such Invest ne,^•M^^^•M^^•.may utilize TIF to improve or develop new public infrastructure and/or other amenities and uses that further goals and objectives in other adopted planning documents, including but not limited to. the Comprehensive Plan, Urban Renewal Area Plans, Climate Action plans. Affordable Housing plans, and public facility and recreation plans: Understanding that TIF is made Possible by the increased value in real property, and that many of these economic activity generators are tax exempt, a TIF oroiect that advances these Public interests would only be Possible by using existing, district -wide increment. Additionally, catalyst Projects that encourage additional unsubsidized private development in an Urban Renewal Area. either directly or indirectly. may be iven special consideration for TIF incentives Formatted: Font: Bold TIF pokiesPolicy j DRAFT sustainabilityClimate Action and Resilience The City of Iowa City has established goals and a Climate Action Plan to reduce community -wide carbon emissions by 45%from 2010 levels by 2030 and achieve net -zero carbon emissions by 2050. In order to aid the City in meeting climate action and resilience goals, proiects should clearly demonstrate leadership in sustainable development. This may include one or more of the following: • Achieving LEED Silver or greater certification for new commercial, mixed -use or residential Formatted: Font 8 pt construction: or certifying in other Proven sustainable building rating systems or environmental management standards (subiect to City approval). • Demonstrating notable performance above the adopted Energy Code. • Full building electrification, including designs Promoting EV-readiness, and utilization of on -site renewable energy. —Excellent inventory and/or impact results demonstrated by a comprehensive and reputable Life Cycle Assessment (LCAI. This may include innovative adaptive reuse and historic preservation efforts. �SY —decarbonization strategies that exceed building and energy code requirements. ' Formatted: Bulleted + Level: 1 + Aligned at 0.36" + Indent at 0.61' The City will work in partnership with the project developer to ensure each project has a tailored strategy that demonstrates leadership in climate action and resilience. Formatted: Font 8 pt Formatted: Indent Left 0' Seak- TIF pokier Policy j DRAFT TIF pelicie Policy DRAFT Historic Ppreservation TIF-supported proiects located in historic districts should increase the diversity and vibrancy of the district, while also preserving and enhancing the historic character. Building design should be contextual to the area and complement the historic character of the district. This may be achieved through design considerations such as size form materials and engaging pedestrian -level streetscape. Historic Preservation oroiects may be eligible for TIF funding from district -wide increment to incentivize historic renovation oroiects that may not add enough taxable value to rely solely on the subject property's increment. New construction that will necessitate the demolition of historic structures is not eligible for tax increment financing. Formatted: Left 1', Right 1', Top: 1', Bottom: 1' Formatted: Body Tert, Indent Left 0.11', Right 0.12' Formatted: Not Highlight TIF pokie Policy j DRAFT TIF pelicie Policy l DRAFT Formatted: Left 1', Right 1', Top: 1', Bottom: 1' RFepeFt as des gnat of GaRtF but ng PF1 ste^='vFese^`ti_ ffepeF4y's neFeme 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 rental units as affordable to tenants at or below 60%AMI (area median income) for a minimum 20--year compliance period. If those housing units are for sale, 15% of the units must wig -be targeted to households at or below 110%AMI. The C ty may Feaw Fe a 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 pan, In exchange for the increased density allowed in ^•-tea •-• 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. Economic 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, workplace safety, child labor, or other labor laws. 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 f8'...�' g written provisions requiring compliance with all state, federal, and local laws and regulations governing wages, child labor, workplace safety, and other labor laws, proof of which must be provided to City prior to the start of construction -,Additionally, the General Contractor of a TIF- supported project will be required to provide the Developer and City, no later than the filing of an application for a building permit, a list of the names and addresses of each subcontractor and the dollar value of the work the subcontractor is expected to perform. TIF pokier Policy j DRAFT TIF peliciesPolicy I DRAFT Formatted: Left 1', Right 1', Top: 1', Bottom: 1' ..F t Re that the SUI3G RtFaGtGF Will G...... ly w th all state, fedeFal and leeaI laws -nd (law@ Wage PaymeRt CelleGtieR Law), lewa CeEle ChapteF 91D (Min mum Wage), the Federal Pa F Quality Jjobs 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 or retention of high paying jobs to the local economy, ajobs-based TIF incentive would be structured using the thresholds of the State of Iowa High Quality Jobs Program. 6thpr pub". Aterests URdeRitand'Rg that TIP r. made possible by th RcFea5ed value r R real property, and that most EU'tUFal organ r,,,m ons and pub! c lands are geneFallymany of these eEURGM1c act vity eeneFaWN; are nclude a)AFtsandGwituFa!aGtyt-�-Ff--i'tPS economic development of the rhAn renpival AFPA Underwriting and Application The following criteria pok4es-are designed to provide a consistent and transparent process for the review and analysis of all applications for TIF assistance. a) Application: Developer must submit a cGomplete application. suhmissien Fonnattad: Font Bold b) "But For" Test: TIF support tied directly to private projects must meet as "8but for' standard_. That is. Eeach project must sufficiently demonstrate �••f"A...PP.'--' need for the City's financial assistance, such that without it, the project would not occur. . TIF assistance in the form or rebates will be used as gap financing as determined through a gap analysis. The City may enlist third party support to review private project financials and evaluate the need for TIF. Use of a third party is not anticipated when TIF is being utilized to rebate costs of public infrastructure, state and federally -supported affordable housing projects, and projects that support non -property tax generating economic activity. d) e) TIF pokie Policy l DRAFT ..,a Structure of TIF financing: The City reserves the right to determine the method of TIF financing that is in the best interests of the Citvtaxpayer. As s eh the G ty StFGRgly PFefeF- the .This includes variables such as the percentage of increment utilized, maximum rebate amount, and maximum term. Developer equity: For,^,fejeets �private development projects. 9developer Equity 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. 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. Formatted: Font: Bold Formatted: Font Bold Formaned: Font: Bold �^r,�.m...aIIPi °,''-'.--r��rnrrs_rncri.7_�ny� Exhibit A Urban Renewal Areas Enabling Tax Increment Financing Updated man to removed expired districts pending Formatted: Font: ltali4 Highlight Fomutted: Font: Italic O � N e m 1�1 S LL 4 E- s ; x F a ' m Obm K g � wwn"'•« .E 111 ��nm Exhibit B City -University Project 1 Urban Renewal Area 1 UrbanCity-University Project I AsAmended \\ ��� 0 TIF pelie Policvj DRAFT Exhibit C City of Iowa City FY2023-2028 Strategic Plan The full Strategic Plan document is available online at www.icgov.org/StrategicPlarL. VAVV�UES • Racial Eauitv. Social Justice & Human Rights: We orioritize diversitv. eouitv. and inclusion eliminatination of systemic barriers, and facilitating equal access for all. • Climate Action: We are leaders in reducing greenhouse gas emissions and adopt sustainable energy, transportation, land, and water practices. • Partnerships & Engagement: We are transparent and foster trust, involve the public in decision - making, and offer facilities and services that foster community connection. IMPACT AREAS & STRATEGIES _Neighborhoods & Housing • Update City Comprehensive Plan and Zoning Code to encourage compact neighborhoods with diverse housing types and land uses. • Partner in projects that serve as models for desired future development. • Create inviting and active outdoor spaces with unique and engaging recreation offerings. • Address the unique needs of vulnerable populations and low to moderate -income neighborhoods. Mobility • Exoand the access and convenience of environmentally friendly and reeionaliv connected oublic transit. • Design and maintain complete streets that are comfortable and safe for all users. • Grow and prioritize bike and pedestrian accommodations. Economy • Reinforce Iowa Citv as a premier communitv to locate and grow a business • Ensure appropriate infrastructure is in Place for future business growth and development. • Cultivate a strong entrepreneurial and small businesses ecosystem with a focus on creating new pathways to success for marginalized populations. • Build Iowa City's image as the Greatest Small City for the Arts. • Strengthen the Iowa River's role as a signature community amenity and tourism generator. Safety & Well -Being • Imolement and exoand innovative oublic safety models and facilities to imorove outcomes and relationships within the community. • Partner with non -profits to address the most emergent and foundational community safety and well-being needs. • Build community by fostering social connections and developing safe. accessible Public spaces for " gatherings Formatted: Font: 11 pt Fomutted: Font: 11 pt Formatted: Font: 11 pt Fomutt•d: Font: (Default) +Body (Calibd), 11 pt Underline Formatted: Font: (Default) +Body (Calibd), 11 pt Formatted: Bulleted + Level: 1 + Aligned at: 0.36' + Indent at 0.61" Formatted: Bulleted + Level: 1 + Aligned at: 0.36' + Indent at. 0.61" Formatted: Bulleted + Level: 1 + Aligned at: 0.36" + Indent at 0.61" Fomutted: Font: (Default) +Body (Calibn), 11 pt Not Bold Formatted: Font: (Default) +Body (Calibd), 11 pt Formatted: Font: (Default) +Body (Calibn), 11 pt Underline Formatted: Font: (Default) +Body (Calibn), 11 pt Formatted: Font: (Default) +Body (Calibd), 11 pt Bold Formatted: Font: (Default) +Body (Calibri), 11 pt Formatted: Bulleted + Level: 1 + Aligned at 0.36' + Indent at. 0.61' Formatted: Font: (Default) -Body (Calibd), 11 pt Not Bold idimem!d^?JY•1R.Plma•. �-�rnwrrswrncw.i.�nyw €xhmh t G Building Hei Pubs-diagr2 ing heights diagram MI! 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