HomeMy WebLinkAbout01-20-2010 Council Economic Development Committee
AGENDA
City of Iowa City
City Council Economic Development Committee
Wednesday, January 20, 2010
8:00 a.m.
Lobby Conference Room
City Hall
1. Call to Order
a. Introduce new member
b. Consider election of 2010-2011 Chairperson
2. Consider approval of the October 20, 2009 Economic Development
Committee meeting minutes
3. 2010 ICAD Group Memorandum of Understanding
4. Tax Increment Finance (TIF) project update
5. Economic Development project update
a. Towncrest
b. Riverfront Crossings
c. Downtown Business Incubator
d. Moss Green Urban Village
e. Expansion of Southeast Industrial Park
6. Committee time
7. Staff time
8. Adjournment
draft
MINUTES
CITY COUNCIL ECONOMIC DEVELOPMENT COMMITTEE
OCTOBER 20, 2009
LOBBY CONFERENCE ROOM, 8:00 A.M.
Members Present:
Members Absent:
Staff Present:
Others Present:
Regenia Bailey, Connie Champion
Matt Hayek
Wendy Ford, Jeff Davidson, Bob Miklo, Christina Kuecker
Joe Raso, Nancy Quellhorst
RECOMMENDATIONS TO COUNCIL:
CALL MEETING TO ORDER:
The meeting was called to order by Chairperson Bailey at 8:02 A.M.
CONSIDER APPROVAL OF THE MINUTES OF THE SEPTEMBER 15. 2009
ECONOMIC DEVELOPMENT COMMITTEE MEETING:
Champion moved to accept the September 15, 2009 meeting minutes as
submitted. Bailey seconded the motion. Motion carried 2-0; Hayek absent.
Champion moved to recommend that the Feasibility Study for the Downtown
Business Incubator be done by hiring the Regional Business Center out of the
University of Northern Iowa. Bailey seconded the motion. Motion carried 2-0;
Hayek absent.
CONSIDER DOWNTOWN BUSINESS INCUBATOR STUDY RECOMMENDATION:
Ford noted that a request for proposals was sent out in September and that they
received four proposals in response. She noted that one is from the Regional Business
Center out of the University of Northern Iowa, the same entity they worked with to write
the grant to the EDA for funds to do the feasibility study. The other proposals, Ford
stated, are from New Economy Strategies in Washington, D.C.; the Claggett Wolfe
Associates from Auburn, California; and Greenwood Consulting Group in Florida and
Colorado. Staff is recommending the proposal from the University of Northern Iowa for
several reasons. She added that the UNI people have good experience in working with
this type of project and noted that they are relatively local, compared to the other
submissions. Bailey stated that she believes this is a good choice, as well. Ford noted
that the Regional Business Center would start this study immediately, if approved, and
that the study will be wrapped up sometime in late January or February.
Champion moved to recommend that the Feasibility Study for the Downtown
Business Incubator be awarded to the Regional Business Center out of the
University of Northern Iowa. Bailey seconded the motion. Motion carried 2-0;
Hayek absent.
Economic Development Committee Meeting
October 20, 2009
CONSIDER UPDATED ECONOMIC DEVELOPMENT STRATEGIES AND ACTIVITIES
FOR 2009-2010:
Ford addressed the Members, stating that last month they reviewed the strategies and
policies that had been in place for the past two years or more. She noted there has
been more emphasis on reaching out to the business community including more one-on-
one meetings with businesses, especially to our larger employers. Ford pointed out a
desired change to the fourth objective for the Committee. The fourth objective would
change from being simple "Workforce Development" to "Work to improve the safety of
business neighborhoods to a) maintain our ability to attract and keep businesses and b)
keep the workforce safe". Strategies to achieve this objective include working with
employers and/or business landlords. Staff hopes to learn of specific issues in the areas
where the City can provide assistance. Through evaluation of City infrastructure, such
as lighting, they hope to find ways to improve public safety.
Ford asked Members to discuss these strategies in order to provide ongoing direction for
staff. Champion asked why the emphasis on public safety, and noted that this seems
somewhat negative to her. Bailey stated that Hayek brought up this concern at the last
meeting, due mainly to concerns on the southeast side of town. Ford added that there is
similar concerns downtown. Bailey noted that Towncrest also has some safety
concerns. The discussion turned to having primary sector businesses noted in this
objective. Bailey noted that items like sprinkler systems and alarm systems also need to
be part of the safety issue. A discussion ensued on how detailed they want to make
these strategies and objectives as the City already has codes and regulations that
businesses must follow.
Champion moved to recommend that the Strategies and Policies for Economic
Development be recommended to Council for adoption. Bailey seconded the
motion. Motion carried 2-0; Hayek absent.
TOWNCREST REDEVELOPMENT PLANS:
Ford noted that staff has been working on concept plans for this redevelopment. They
have had numerous meetings with stakeholders in the area, including neighborhood and
one-on-one meetings with business owners. Davidson noted that staff believes that
although this area has been in decline, it has great potential to make a come back. He
stated that they have taken the time to get a lot of input from residents and businesses.
Miklo then addressed Members, noting the various meetings they have conducted over
the past year. From these meetings, Miklo noted that they were able to come up with
some guiding principals for the plan they have developed. He highlighted some of the
main issues in this plan, noting that this can be done in a phased-in manner versus all at
once making these changes. Visually opening up the Towncrest area to First Avenue is
one of the major focuses. This was due to the feedback concerning visible accessibility
to the area. Another concern was better visibility from Muscatine Avenue. Mik/o noted
the addition of a boulevard-style street to address this concern. Short and long-term
parking was noted as another key element to this plan. Miklo briefed the group on the
types of businesses operating in the area, Miklo noting that there are still a fair number
of physicians and medical-related offices. The plan aspires to build on this core, with the
possibility of adding more retail or restaurant businesses. Integrated residential units on
the second, third, and possibly fourth floors would be looked at as well, if the parking
Economic Development Committee Meeting
October 20, 2009
issues can be appropriately addressed. Miklo stated that a popular request from the
neighborhood was a desire to redevelop the Town and Campus Apartments. In order to
assure quality in this redevelopment, there will be a need for policies regarding
architectural and landscaping standards.
Kuecker then addressed the Members, sharing some preliminary layouts for this
redevelopment. She responded to Members' questions regarding how the street system
would be altered to better open up the three-block area. Kuecker then shared plans for
a bi-Ievel parking structure for the area and how it would fit in to the overall strategy.
Davidson then noted that what they are hoping to do, through some public investment is
to establish a character for the area that future development would then follow. He
noted that this would be similar to what Coralville has done in the River Landing area.
Davidson then asked Kuecker to share preliminary planning for multi-family housing.
She noted that new buildings would be suggested versus rehab of the Town and
Campus Apartments, with a more adequate design and parking being key issues.
Davidson noted that all of the public infrastructure is already in place as this is an
established neighborhood, so this is one less issue to deal with, making it an efficient
urban renewal area. Miklo noted that they still have several public meetings planned in
order to gather even more input before they have an unveiling of a proposed plan.
Bailey asked for a timeline on this project, and Davidson noted that once they get the
plan finalized and the public input process finished they will then return to Council to
have the plan adopted.
STAFF TIME:
A. Preference for presentation on ICAD's Minding Our Business report - Ford
asked Members if they would like to have this report presented at their next
Economic Development Committee meeting, a work session, or at a formal
City Council meeting. Champion stated a presentation at either a work
session or a formal meeting would be fine with her, and Bailey agreed. After
a brief discussion, it was decided to have this presentation at a formal
Council meeting.
B. Possible scheduling of EDC meeting in November to coincide with South
Gilbert St./River Rail EPA workshop - Ford stated that they would like to have
an Economic Development Committee meeting during the time of this
workshop so Members could be brought up to speed on this issue. She
suggested November 12 or 13 as a possibility for this joint meeting. Bailey
stated that she is unavailable on the 12th. The 13th was then chosen as a
meeting date, with an 8:30 start time instead. Ford will check with Hayek on
this date/time.
COMMITTEE TIME:
Champion asked if staff had heard anything from local businesses regarding the
franchise fee proposal. Ford stated that she has heard from businesses that sayan
increase in their utility bills will be very burdensome. Bailey said she's heard the
Chamber has been hearing this same thing too. Ford noted that they are working with
ICAD to get better numbers on these types of impacts, and she will share that
information once they have a clearer picture. Members then discussed the possibility of
specific entities being exempt from this franchise fee, with Bailey noting that she does
Economic Development Committee Meeting
October 20, 2009
not believe they can do this. Champion added that she is not willing to lose businesses
due to implementation of such a franchise fee, and she believes they need to look into
this more.
ADJOURNMENT:
Champion moved to adjourn the meeting at 8:58 A.M.
Bailey seconded the motion.
Motion carried 2-0; Hayek absent.
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CITY OF IOWA CITY
MEMORANDUM
DATE:
TO:
RE:
FROM:
January 8, 2010
Economic Development Committee
Iowa City Area Development Group
Memorandum of Understanding (MOU)
Wendy Ford, Economic Development Coordinator
The following document is a proposed Memorandum of Understanding for services
provided by the Iowa City Area Development Group for the remainder of a 5 year funding
agreement we have in effect through FY11.
The primary differences between the proposed MOU and last years' is in item #6, where
the Wind Energy Supply Chain Campus is called out as a priority for development as well
as the area west of the northeast quadrant of the intersection of 1-80 at Dodge St., or the
Moss Green Urban Village.
I believe ICAD has delivered the services stated on the prior year's MOU, also included.
The only area for improvement I could recommend is that our offices strive for more regular
communication.
If you would like to see additional services added to the MOU, please be ready to discuss
them at your meeting on January 19th.
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City of Iowa City & Iowa City Area Development Group
Memorandum of Understanding for
Services Provided by leAD Group to City of Iowa City
The City of Iowa City is committed to investing $100,000 annually during ICAD Group fiscal
years 2010 & 2011 (Jan 1,2010 - June 30, 2011). The services to be provided for this
investment will include, but are not limited to, the following items:
1. Provide aerial photos of industrial, office parks, and other substantial commercial sites in
Iowa City. Additional fees may be associated with photos of sites not linked with the
core work associated with ICAD Group (i.e., residential, retail, etc.). It is expected that
these photos will be completed in spring 2010 and 2011.
2. ICAD Group will interview their clients residing in Iowa City as part of the existing
business services program (Synchronist), and provide a summary report.
3. ICAD Group will continue to visit the corporate headquarters of companies with
operations in Iowa City, and will provide a verbal report related to issues pertaining to
city services or areas in which the city can provide resources to improve general business
conditions or specific company needs.
4. The ICAD Group President will provide a general organizational update to the city
council annually. Other presentations, such as company expansion/location
opportunities, or on special request by council will also be granted.
5. leAD Group will engage the City of Iowa City as it develops/redevelops significant
marketing materials, especially those around the shovel ready sites program.
6. ICAD Group will continue to work with city officials and area leaders on the
development of the commercial and industrial zones, particularly the Wind Energy
Supply Chain Campus, Aviation Commerce Park, and available office property in the
northeast section of town around the 1-80 and Dodge Street exchange
7. lCAD Group will work with the Economic Development Coordinator's office to gather
information for the annual Community Profile.
8. ICAD Group staff and City of Iowa City Economic Development Division will meet at
least monthly to share information and coordinate efforts, including applications to the
State of Iowa for business projects.
9. ICAD Group will provide assistance with business incubator strategies
10. ICAD Group will provide a year-end report on the progress made from this MOD, and
present this information to the Economic Development Committee and offer a
presentation to the full city council.
Joe Raso
Date
Dale Helling
Date
FY2010 - Developed J an 2010
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City of Iowa City & Iowa City Area Development Group
Memorandum of Understanding for
Services Provided by ICAD Group to City of Iowa City
The City of Iowa City is committed to investing $100,000 during ICAD Group fiscal year 2009
(July 1, 2008 - June 30, 2009). The services to be provided for this investment will include, but
are not limited to, the following items:
1. Provide aerial photos of industrial, office parks, and other substantial commercial sites in
Iowa City. Additional fees may be associated with photos of sites not linked with the
core work associated with ICAD Group (i.e., residential, retail, etc.). It is expected that
these photos will be completed in summer 2008 and spring 2009.
2. ICAD Group will interview their clients residing in Iowa City as part of the existing
business services program (Synchronist), and provide a summary report.
3. ICAD Group will continue to visit the corporate headquarters of companies with
operations in Iowa City, and will provide a verbal report related to issues pertaining to
city services or areas in which the city can provide resources to improve general business
conditions or specific company needs.
4. The ICAD Group President will provide a general organizational update to the city
council annually. Other presentations, such as company expansion/location
opportunities, or on special request by council will also be granted.
5. ICAD Group will engage the City ofIowa City, and other city investors, as it develops
strategies for shovel-ready sites and develops/redevelops significant marketing materials.
6. ICAD Group will continue to work with city officials and area leaders on the
development of the commercial and industrial zones, particularly the Mormon Trek
Industrial Park, Aviation Commerce Park and the annexation of industrial land on the
southeast section of town.
7. ICAD Group will work with the Economic Development Coordinator's office to gather
information for the annual Community Profile.
8. ICAD Group staff and Iowa City Economic Development Division will meet at least
monthly to share information and coordinate efforts.
9. ICAD Group will provide assistance with applications to the State of Iowa.
10. ICAD Group will provide a year-end report on the progress made from this MOD, and
present this information to the Economic Development Committee and offer a
presentation to the full city council.
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CITY OF IOWA CITY
MEMORANDUM
Date:
To:
From:
Re:
January 12, 2010
Economic Development Committee
Wendy Ford, Economic Development Coordinator
Iowa City TIF projects status update
Overview
TIF (tax increment financing) is one of the few tools allowed by state law that cities can use to
finance development projects in their communities. The State Code stipulates that TIF should
be used for economic development or eradication of slum and blight. Commercial development
projects are compelling because of the potential for property tax relief through new value
created.
Tax increment financing areas are created as a means to maximize property tax revenue, to pay
for the costs of public improvements, and/or to make loans or grants to private enterprise as
incentive to locate within the area. If a tax increment financing area is created for economic
development reasons, it has a 20-year life span. If it is created for eliminating slum and blight,
there is no limit to the life of the district.
After examining a cost/benefit analysis, a City Council may enact an ordinance allowing the use
of TIF. Potential uses include encouraging a development project for the property tax revenues
it will ultimately generate, creating jobs, or as a means to pay for public improvements.
The protected debt levy, the TIF levy and the consolidated levy
The property tax revenues that result from the improvements (and only from the improvements)
on a TIF project may be captured for TIF financing. To determine the improvement value, a
base value is set before improvements are made. All property taxes on the base are collected
and distributed to the taxing entities as they were prior to a TIF, and continue for the duration of
the TIF. Only if a TIF project is created is the new incremental value captured by the City and
used as stipulated in the TIF ordinance.
A portion of the new taxes on any increment will continue to flow to all taxing entities. All taxing
entities will realize some revenue from new value in TIF projects immediately. When a new TIF
project begins, the protected debt levy for the City, County and School District is subtracted
from the new tax increment before TIF revenue is distributed. At present, the protected debt levy
is approximately $7 per $1000 of valuation. So with property taxes roughly $40 per $1000 of
valuation, less the $7 per $1000 protected debt levy, that leaves $33 per $1000 to use for the
TIF.
As an example, on a TIF project with $1 million of new value, the developer pays all property
taxes due on the original or base value PLUS all taxes on the $1 million in new value. At
$40/$1000, the property tax bill on the new value alone is $40,000. Of that, the protected debt
levy is reserved for the taxing entities, and the remaining TIF levy is $33/$1000. The $33,000
can be rebated back to the developer or used to payoff bonds used for public improvements.
Iowa City's existing TIF projects
Currently, Iowa City has eight TIF areas and six TIF projects in various stages of completion.
Three of the six, the Sycamore Mall and Alpla #1 rebates, and the repayment of bonds for the
Plaza Towers project, will be complete in FY10.
January 12, 2010
Page 2
2005" 2010
Lower Muscatine Rd. & 6 2002 2022
Industrial Park Rd. 2002 2022
Heinz Road Industrial Park 2003 2023
Alia #1 2006" 2010
2011" 2014
2003 2023
Plamor $972,150 $2,012,840 $1,040,690 $81,713 $34,683 $47,030
Mercer $264,520 $6,040,690 $5,776,170 $245,226 $27,499 $217,727
Alpla #1 & 2 $3,867,901 $8,427,350 $4,559,449 $342,114 $127,034 $215,080
UNFI $4,706,544 $13,094,510 $8,387,966 $531,581 $33,098 $498,483
Pepperwood
Plaza $8,745,932 $12,675,590 $3,929,658 $484,108 $129,929 $354,179
TOTAL $18,557,047 $42,250,980 $23,693,933 $1,684,742 $352,243 $1,332,499
We can clearly defend our use of TIF as being consistent with the intention of the state enabling
statute. If one accepts the premise that the projects would not have occurred without the use of
TIF, then the long-range property tax benefits to the City, County and School District are
apparent. Our percentage of total property within the Iowa City corporate limits that is in TIF
districts remains less than 1 %.
Individual sheets detailing the active projects are attached. Please bring any questions to the
January 19 meeting.
cc: Jeff Davidson
Tracy Hightshoe
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CITY OF IOWA CITY
MEMORANDUM
DATE:
TO:
RE:
FROM:
January 8, 2010
Economic Development Committee
Sycamore Mall (MGD L.C.) Developer's Agreement Status
(Sycamore & First Avenue Urban Renewal Area)
Wendy Ford, Economic Development Coordinator
Agreement: approved by resolution 00-322, 9/19/2000, recorded 9/24/02 book 3385, page 385
Certification of Completion:
Amendments: #1 by resolution 04-87, #2 in May 2004, #3 by resolution 08-243 - each having to do with transfer
of ownership. The first amendment was executed in March, 2004 which allowed for the dissolution of the owners'
development entity, comprised of multiple parties, to divide into individually owned L.C.s as tenants in common.
The second amendment followed in May, 2004 when the group of individually owned L.C.s bought out Gerry
Ambrose's interest. The third amendment allows the individually owned L.C.s to transfer their interests as tenants
in common to three CORE Investment entities in order to reinvest in other local development projects. Hodge
Commercial Management continues to operate the mall and will receive the TIF rebates if the performance terms
of the agreement are met.
Performance Measures: Make improvements to existing mall to increase assessed value by at least 15% over
assessed value on Jan. 1. 2000. Must have one anchor retail store of at least 40,000 square feet and be 65%
occupied by 11/1/2002. Must be 75% leased by 11/1/2003 and by 11/1/2004, 80% occupied for 10 of 12 previous
months for the duration of the agreement
Rebate Schedule: 7 Years -100%, $2,000,000 maximum.
Results: After the adoption of the Sycamore and First Avenue Urban Renewal Area, over $7.1 million in building
permits were issued for the Sycamore Mall. The January 1, 2008 assessment is an approximate $10.3 million, or
222% increase over the January 1, 2000 assessment.
Chronological Overview: The following table provides a review of the Sycamore Mall TIF project, property
values, taxes collected and taxes rebated. The agreement rebates the value of property taxes paid (less protected
school, city and county debt levy) in excess of the base year's assessed value. The January 1, 2000 assessment
is the base year for this agreement.
yrNet Taxes
Paid
Jan-OO a 2001-02 $4,662,900 $152,958 NA NA
Jan-01 2002-03 $4,662,900 $163,000 NA NA
Jan-02 2003-04 $10,168,280 $378,736 $167,957 6/1/04 1 $210,779
Jan-03 2004-05 $11,073,730 $406,796 $192,862 6/1/05 2 $213,934
Jan-04 2005-06 $11,457,180 $439,444 $213,971 6/1/06 3 $225,473
Jan-05 2006-07 $12,696,150 $481,200 $252,149 6/1/07 4 $229,050
Jan-06 2007 -08 $14,610,400 $567,328 $320,926 6/1/08 5 $246,402
Jan-07 2008-09 $15,051,730 $608,969 $345,399 6/1/09 6 $263,571
Jan-08 2009-10 $15,051,730 $610,035 $343,494 b 6/1/10 7 $267,542
Total $1,836,758 $1,656,751
Property Taxes Paid Include the City, County and School District.
Parcel #: 10-14-457-004
a Base year.
b Final rebate. This project reached the time limit of 7 years of rebates before the dollar maximum of $2 million.
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CITY OF IOWA CITY
MEMORANDUM
DATE:
January 8, 2010
TO:
Economic Development Committee
RE:
Plamor property Developer's Agreement Status
(Sycamore & First Avenue Urban Renewal Area)
FROM:
Wendy Ford, Economic Development Coordinator
Agreement: By resolution 02-318 on 9-10-2002; recorded 9-24-02 book 3385, page 418
Certification of Completion: 11/7/2003; recorded 11/10/2003 book 3665, pages 132-134
Amendments: none
Performance Measures: Improvements to existing 23,000 square foot structure and construction of a
new approximate 4,600 square foot building for commercial use. Project must increase actual
assessed value of the development property by at lease 15% over assessed value on Jan. 1, 2002,
beginning Jan. 1, 2004. On Nov. 1, 2003 at least 65% of the gross leasable space must be occupied.
On Nov. 1, 2004, 75% must be occupied, and beginning Nov. 1, 2005 and each Nov. 1 until termination
date, must be at least 80% occupied for 10 of previous 12 months.
Rebate Schedule: 7 Years - 100%, $400,000 maximum
Results: The January 1, 2009 assessment is an approximate $1.06 million increase over the base
year 2002 assessment, a 107% increase in taxable valuation.
Chronological Overview: The following table provides a review of the Plamor property TIF project,
associated property values, taxes collected and taxes rebated. The agreement rebates the value of
property taxes paid (less protected school, city and county debt levy) in excess of the base year's
assessed value.
Valuation Fiscal Assessed property 'Taxes Rebate yr Net Taxes
Year Year Value 'Taxes Paid Rebated PaYClat$$ Paid
Jan-02 a 2003-04 $972,150 $36,210 NA NA
Jan-03 2004-05 $966,070 $35,504 NA NA
Jan-04 2005-06 $1,847,110 $70,848 $27,555 6/1/06 1 $43,293
Jan-05 2006-07 $2,008,020 $76,106 $32,514 6/1/07 2 $43,592
Jan-06 2007 -08 $2,008,020 $77,972 $33,419 6/1/08 3 $44,553
Jan-07 2008-09 $2,012,840 $81 ,436 $34,600 6/1/09 4 $46,837
Jan-08 2009-1 0 $2,012,840 $81,713 $34,309 6/1/10 5 $47,304
Jan-09 2010-11 $2,012,840 $81,713 $34,409 b 6/1/11 6 $47,304
Jan-10 2011-12 6/1/12 7
Total $196,906 $272,882
Property Taxes Paid Include the City, County and School District. italics indicate estimates
Beginning 2003- 2 new parcels created - 10-14-486-007 and 10-14-486-008
a Base year
b Estimate calculated (2,012,840 - 972,150/1000) x est. FY11 TIF levy of $33.06
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CITY OF IOWA CITY
MEMORANDUM
DATE:
January 8, 2010
TO:
Economic Development Committee
RE:
Plaza Towers TIF Project Status
(City-University District)
FROM:
Wendy Ford, Economic Development Coordinator
Improvement and Sale of Land for Private Redevelopment: approved by resolution 02-253, July 16, 2002.
Performance Measures: Construct a multi-use building with minimum construction cost of $22,265,000. Include
commercial space including a 10,000 square foot full service grocery store, at least 18,000 square feet of new
conference space, a boutique hotel and high end offices and residential units with a maximum of two bedrooms each for
sale and for lease in the upper floors, a skywalk from the parking ramp through the building for easy access to the
Pedestrian Mall and exterior entrance to the library.
Minimum Assessment agreement: A minimum assessment agreement was used in this case to ensure that enough
taxable value through improvements of two of the developer's projects would create the increase in property tax
revenues necessary to payoff the bonds and reduce the risk to the City. The developer agreed to enter into a Minimum
Assessment Agreement to establish a Minimum Actual Value for the land and Improvements for this project and the land
and improvement of the Vogel property.
Bond Sale Instead of providing rebates to the developer. The City sold $7.3 million in bonds and funded a $6 million
construction grant to the developer to assist in financing the initial part of the project. When amortized over a 20 year
period at rates varying between 4% and 5.4% a debt repayment schedule totaling $11,975,104 was created.
Bond Repayment: After the first 10 years (2004-2013) of scheduled interest and principal payments on the bonds, the
City has the option to payoff the remaining debt early. This will be possible because the City collected all of the
incremental tax revenues in the TIF district as opposed to just those associated with the project. All TIF revenue
exceeding the scheduled debt repayment has been collecting interest in a Plaza Towers TIF repayment account and will
be used to retire the debt early.
Overview: The City sold the land to the developer for $250,000 cash. The City issued bonds to pay for its $6 million part
of the project.
Results: The January 1, 2009 assessment is an approximate $35 million increase over the January 1, 2004 assessment.
The new taxable valuation, or increment, of the Plaza Towers project is $35,000,000. The increment (difference between
the valuation in the base year and the latest valuations) in the entire district exceeds $85,000,000. Using the district's tax
increment will have allowed the City to save upwards of $1.75 million dollars in interest and payoff the debt early. By
paying off the debt early, this allows for the entire increment to be released back to all taxing entities 12 years sooner
than anticipated. The property tax revenues on Plaza Towers now generates upwards of $950,000 per year. Beginning in
FY 2011, 100% of it will flow to all taxing entities.
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CITY OF IOWA CITY
MEMORANDUM
DATE:
TO:
RE:
FROM:
January 8, 2010
Economic Development Committee
Mercer (formerly Seabury & Smith) Developer's Agreement Status
(Northgate Corporate Park Urban Renewal Area)
Wendy Ford, Economic Development Coordinator
Development Agreement: approved by resolution 01-236, 7/31/2001, recorded 9/18/2002
Certification of Completion:
Amendments: none
Performance Measures: Construction of a new office building of at least 46,000 square feet at a $4,825,000 construction cost. Beginning
7/31/03, maintain a monthly average of at least 202 full time equivalents (FTEs) and 25 part time employment units. FTE hourly wage will be
no less than $11.30 and average no less than $15.70/hour and have competitive benefits. Part time employees' average wage will be at
least $8.00.
Rebate Schedule: 10 Year declining rate rebate; maximum $781,200. The tax increment rebated declines from 100% in year one to 10% in
year ten, as follows:
Year
Paid in June of
TIF%
1
2005
100%
2006
90%
3
2007
80%
2008
70%
5
2009
60%
2010
50%
2011
40%
8
2012
30%
2013
20%
10
2014
10%
Results: The January 1, 2009 assessment shows an approximately $5.8 million increase from the January 1, 2002 assessment; a 2000%
increase in taxable value. On Nov. 1, 2009, Mercer certified 275 full time employees with an average wage of $18.68 per hour, indicating
Mercer's payroll is over $10.6 million annually.
Chronological Overview: The following table provides a review of the Seabury and Smith (Mercer) TIF project, associated property values,
taxes collected and taxes rebated. The agreement rebates the value of property taxes paid (less protected school, city and county debt levy)
in excess of the base year's assessed value on a declining scale each year. The January 1, 2002 assessment is the base year for the
Northgate Corporate Park Urban Renewal Area and this redevelopment agreement.
yr ~etTaxes
Paid
NA
NA
100% 6/1/05 1 $39,445
90% 6/1/06 2 $59,616
80% 6/1/07 3 $81,869
70% 6/1/08 4 $102,203
60% 6/1/09 5 $129,173
50% 6/1/10 6 $149,735
40% 6/1/11 7 $217,727
30% 8
20% 9
10% 10
$779,768
italics indicate estimates
Jan-01 2002-03 $208,250 $9,248 NA
Jan-02 a 2003-04 $264,520 $9,852 NA
Jan-03 2004-05 $4,722,360 $173,554 $134,109
Jan-04 2005-06 $5,205,680 $199,666 $140,050
Jan-05 2006-07 $5,881,350 $222,910 $141,042
Jan-06 2007-08 $5,922,890 $229,988 $127,785
Jan-07 2008-09 $6,040,690 $244,397 $115,224
Jan-08 2009-1 0 $6,040,690 $245,226 $95,491
Jan-09 2010-11 $6,040,690 $ 245,226 $27,499b
Total $781,200
Property Taxes Paid Include the City, County and School District.
Parcel #: 07-36-303-003, 07-36-303-004
a Base year.
b Final rebate. This amount meets the $781,200 maximum before the 10 year maximum.
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CITY OF IOWA CITY
MEMORANDUM
DATE:
January 8,2010
TO:
Economic Development Committee
RE:
Alpla Developer's Agreement Status (Alpla #1)
(Heinz Rd. Urban Renewal Area)
FROM:
Wendy Ford, Economic Development Coordinator
Development Agreement: approved by resolution 03-89, 3/19/2003
Certification of Completion: recorded 10/22/2004, book 3808 page 230-232
Amendments: none
Performance Measures: Make improvements to existing 56,000 square foot plant through construction
of additional manufacturing, warehousing or distribution space totaling approximately 86,000 square feet.
Increase the assessed value by 15% over 1/1/2003. From 3/1/2004 until termination, maintain a minimum
of 35 FTEs. Pay all property taxes due.
Rebate Schedule: 5 Year - 100%, Maximum $510,000 including a $35,000 Grant; final rebate will be
6/1/2010.
Results: The January 1, 2009 assessment is an approximate $3.24 million increase over the January 1,
2003 assessment - a 90% increase in taxable value. As of Nov. 2009, Alpla employed of 251 FTEs with
an average hourly wage of $16.55. Their total Iowa City payroll exceeds $8.6 million per year.
Chronological Overview: The following table provides a review of the Alpla TIF project, associated
property values, taxes collected and taxes rebated. The agreement rebates the value of property taxes
paid in excess of the base year's assessed value. The January 1, 2003 assessment is the base year for
the Heinz Road Urban Renewal Area and this specific redevelopment agreement.
Valuation Fiscal Assessed PI'C!P~rty Taxes Rebate yr Net Taxes
Year Year Value Taxes Paid Rebated p.y~ates Paid
Jan-02 2003-04 $6,966 $150 NA NA
Jan-03a 2004-05 $3,594,340b $39,242 NA NA
Jan-04 2005-06 $6,358,420 $166,110 $87,049 6-1-06 1 $79,061
Jan-05 2006-07 $6,760,750 $199,652 $92,247 6-1-07 2 $107,405
Jan-06 2007-08 $6,760,750 $222,714 $94,815 6-1-08 3 $127,889
Jan-07 2008-09 $6,842,210 $222,714 $81,557 6-1-09 4 $141,156
Jan-08 2009-1 0 $6,842,210 $277,764 $98,342c 6-HO 5 $179,422
Sub total $454,010 $634,944
+ grant in fy04 $35,000
Total $489,010
Property Taxes Paid Include the City, County and School District.
Parcel #: 10-24-151-002
a Base year.
b Each year the base value was modified to remove value included in partial property tax exemption (to
avoid giving tax rebate on already exempted value) and to remove increased value over proportion of
the original investment. The original investment accounts for 56.53% of the full assessed value.
C Final rebate, payable 6/1/2010, Reached time limit before dollar limit; $20,990 short of maximum.
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CITY OF IOWA CITY
MEMORANDUM
DATE:
January 8, 2010
TO:
Economic Development Committee
RE:
Alpla Developer's Agreement Status (Alpla #2)
(Heinz Rd. Urban Renewal Area)
FROM:
Wendy Ford, Economic Development Coordinator
Development Agreement: approved by resolution 07-250,8/21/2007
Certification of Completion: due by 11/1/2009 for first certification, recorded 10/02/2009, book 4511
page 765-766
Amendments: none
Performance Measures: Improvements to existing 100,255 square foot freestanding Alpla plant through
construction of additional manufacturing, warehousing or distribution space totaling approximately 82,200
square feet. Increase the assessed value by 15% over 1/1/07. Employment: From 9/1/07 until 11/1/09
maintain a minimum of 180 FTEs. Commencing with the first certification on 11/1/09, employ on average,
an additional 25 new full time positions at an average hourly wage of $14.00 per hour plus competitive
benefit package until at least the termination date. Pay all property taxes due.
Rebate Schedule: 4 Year - 100%, Maximum $600,000; If all performance measures met, first rebate
scheduled 6/1/11 and final rebate 6/1/14.
Results: First certification at 11/09: 251 total employees averaging $16.55 per hour. New construction
and improvements have added $3.8M in new taxable value over the base year of Jan. 2007, an 83.8%
increase.
Chronological Overview: The following table provides a review of the Alpla TIF project #2, associated
property values, taxes collected and taxes rebated. The agreement rebates the value of property taxes
paid in excess of the base year's assessed value.
Valuation FIscal Assessed PrO~rtY Taxes Rebate yr Net Taxes
Year Year Vallle sPaid R'ebated ~ay Paid
dates
Jan-07a 2008-09 $4.585,250 $222,714
Jan-08 2009-1 0 $6.842,210 $277,764
Jan-09 201 0-11 $8,427,350 $342,114 $127,034b 6-1-11 1 $215,080
Jan-10 2011-12 6-1-12 2
Jan-11 2012-13 6-1-13 3
Jan-12 2013-14 6-1-14 4
Total $127,034 $215,080
Estimates in italics
Property Taxes Paid to all jurisdictions: City, County and School District.
Parcel#: 1024130001
a Base year.
b Estimate calculated (8,427,350 - 4,585,250 /1000) x est. FY11 TIF levy of $33.06
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DATE:
TO:
RE:
FROM:
January 8, 2010
CITY OF IOWA CITY
MEMORANDUM
Economic Development Committee
United Natural Foods Developer's Agreement Status
(Heinz Rd. Urban Renewal Area)
Wendy Ford, Economic Development Coordinator
Agreement: approved by resolution 03-205, 7/1/2003
Certification of Completion: recorded 10/25/2004, book 3809 page 233-235
Amendments: one, by resolution 06-105, 4/4/06
Performance Measures: Improvements to existing 120,500 s.f. warehouse through construction of additional warehousing and/or
distribution space, totaling 140,000 s.f. Increase the assessed value by 15% over 1/1/2003. Maintain minimum monthly average of
300 FTEs, with a minimum average hourly wage of $11.75 and no less than $10.00 per hour, or be subject to reduction in rebate
by $1667 per shortfall in employment units. Pay all property taxes due.
Rebate Schedule: 6 Year - 100% tax increment rebate; maximum $1,000,000. The original United Natural Foods TIF agreement
was to reach employment of 300 full time equivalents with an average wage of at least $11.75/hour. Prior to the development
project, they employed 218 full-time equivalents. The agreement was amended on April 4, 2006, to a) extend the time frame to
reach employment levels and b) to institute a clawback provision if employment levels fell short of 300. The clawback allowed the
City to deduct $1,667 from the TIF rebate for every FTE UNFI fell short of 300 at the time of certification.
Results: The January 1,2009 assessment is an approximate $8.4 million increase from the January 1, 2003 assessment. In Nov.
2009, UNFI certified 306 full time equivalents with an average $17.36 hourly wage. Their total Iowa City payroll exceeds $11
million per year.
Chronological Overview: The following table provides a review of the United Natural Foods Inc. TIF project, property values,
taxes collected and taxes rebated. The agreement rebates the value of property taxes paid (less protected school, city and county
debt levy) in excess of the base year's assessed value. The January 1, 2003 assessment is the base year for this agreement.
Valuation
Year
Jan-02
Jan-03 a
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-1 0
2010-11
$4,351,170
$4,653,740 b
$6,203,550
$12,947,600
$12,947,600
$13,094,510
$13,094,510
$13,094,510
$142,426
$155,308
$227,272
$486,067
$494,932
$529,783
$531,581
$531,581
6/1/07
6/1/08
6/1/09
6/1/10
6/1/11
6/1/12
NA
NA
NA
$169,784 c
$240,905 d
$278,876 e
$277,338 f
$33,098 9
Total $1,000,000
Property Taxes Paid Include the City, County and School District.
Parcel # as of 2004: 10-24-178-012
Net Taxes Paid
1
2
3
4
5
6
NA
NA
NA
$316,283
$261,856
$250,908
$254,243
$498,483
$1,581,772
italics indicate estimates
a Base year.
b Each year the base value was modified to reflect 35.94% of the full assessed value.
c At the time of the first rebate in June, 2007,100% of the rebate would have been $256,468, but actual employment was at 248.
Clawback was instituted as per agreement: 300-248 = 52 x $1667 = reduction of 100% rebate by $86,684, for $169,784.
d At the time of the second rebate in June, 2008, 100% of the rebate would have been $267,576, but actual employment was at
284. Clawback was instituted as per agreement: 300-284 =16 x $1667 = reduction of 100% rebate by $26,668, for $240,905.
e Full amount rebated; employment threshold met.
I Full amount rebated up to the total maximum amount of $1 million; employment threshold met.
9 Final rebate. This amount will complete the $1 million maximum per the agreement, before the 7 year maximum.
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DATE:
TO:
RE:
FROM:
CITY OF IOWA CITY
MEMORANDUM
January 8, 2010
Economic Development Committee
Southgate Development Company (Pepperwood) Developer's Agreement Status
(Hwy 6 Commercial URA)
Wendy Ford, Economic Development Coordinator
Development Agreement: resolution 03-276 on 8-19-03; recorded 8-29-03 book 3627, page 537-574
Certification of Completion: 5-9-2007; recorded book 4161, page 760-763
Amendments: One, in November, 2008 changing process for exterior design changes to go through Economic
Development Committee.
Performance Measures: Increase assessed value of property beginning with the Jan. 1, 2005 assessment by at
least 15% over that of Jan. 1, 2003. Occupancy rate of gross leasable square feet must be at least 65% on 11-1-
04, 75% on 11-1-05, and 80% on 11-1-06 for at lease 10 of the previous 12 months. The 151 amendment details
expectations for pedestrian walkways to be separated from vehicle traffic through landscaping, etc; that parking
islands be curbed and landscaped; that the presence of the building should be strengthened for visibility from Hwy
6; that the use of color, materials, mass, signage, etc. should enhance the commercial environment; that awnings
and signage should be integrated in the design concepts, that vertical roof extension and sign panels should have
a finished appearance and the that material used within 5 feet of the finished grade be durable and resistant to
damage (EFIS is not recommended).
Rebate Schedule: 7 Years - 100%, $1,725,000 maximum.
Results: With the Jan. 1, 2009 valuation there has been an increase of $3.2 million in new taxable value since the
base year of 2003; a 37.8% increase in taxable value. Southgate has maintained a 97.5% occupancy rate this
certification year.
Chronological Overview: The following table provides a review of the Southgate Development Company's
Pepperwood Plaza TIF project, associated property values, taxes collected and taxes rebated. The agreement
rebates the value of property taxes paid (less protected school, city and county debt levy) in excess of the base
year's assessed value. The January 1, 2003 assessment is the base year for the Hwy 6 Commercial Urban
Renewal Area. The agreement states the City will rebate the taxes only on the Minimum Improvements listed in
the Developer's Agreement. Base value was adjusted in 2008, as the property parcels were reconfigured. New
base rate is $8,745,932.
Valuation
Year
Jan-03a
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
Fiscal
Year
2004-05
2005-06
2006-07
2007-08
2008-09
2009-1 0
2010-11
2011-12
2012-13
Assessed
Value
$8,677,520
$8,677,520
$10,896,530
$11,773,880
. $11,917,390
$11,925,100
$12,675,590
Property
Taxes Paid
$318,912
$332,830
$412,992
$457,185
$482,159
$484,108
$514,574
Taxes
Rebated
Rebate
Pay dates
NA
NA
$69,637
$99,895
$105,442
$105,115
$129,92f1J
6/1/07
6/1/08
6/1/09
6/1/10
6/1/11
6/1/12
6/1/13
Total
Property Taxes Paid Include the City, County and School District.
$510,018
italics indicate estimates
$1,810,533
a Base year
b Estimated calculated (12,675,590 - 8,745,932/1000) x est. FY11 TIF levy of $33.06
yr
Net Taxes
Paid
1
2
3
4
5
6
7
$343,355
$357,290
$376,717
$378,992
$384,645
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CITY OF IOWA CITY
MEMORANDUM
Date: January 12, 2010
To: City Council Economic Development Committee
From: Jeff Davidson, Director of Planning and Community Development --pI
Re: Agenda item #5: Economic Development project update
A. Towncrest
The Towncrest Neighborhood Redevelopment Plan is a subsection of our Southeast District
Plan comprehensive planning effort. The redevelopment of this area is motivated by a desire to
reverse a trend of disinvestment and stagnant or even declining property tax assessments. A
concept plan has been drafted based on public input meetings with area residents, property
owners and business owners. We have been reviewing the draft plan with area property
owners, local developers, and other interested persons such as administrators of Kirkwood
Community College. We are currently incorporating comments we received from Dover Kohl
Town Planners when they were in town for the Riverfront Crossings planning charrette.
At our Capital Improvements Program review session with the City Council, interest was
expressed in funding activities related to the redevelopm,ent of Towncrest beginning in FY11.
We are developing a strategy for public investment in the area, as well as an incentive package
for prospective developers. There is a problem property which has been identified as a
significant issue to further redevelopment in the area, and we are also developing a strategy for
dealing with that.
B. Riverfront Crossings
We had a very successful planning charrette in mid-November for the Riverfront Crossings
redevelopment area. There was good participation from a variety of interest groups and good
coverage by the local media. This is an initiative funded through the U.S. Environmental
Protection Agency and the Rebuild Iowa Office.
The consultant team is compiling the information collected at the charrette and is preparing a
summary memorandum. We will be developing an overall concept plan for the area using the
materials generated from the planning charrette. We have had a positive response from the City
Council in terms of making some public investment in this area in an effort to spur private
redevelopment. In the short term we are focusing on the relocation of the North Wastewater
Treatment Plant.
C. Downtown Business Incubator
We have received a $60,000 grant from the Economic Development Administration for
completing a Downtown Business Incubator feasibility study. We circulated a Request For
Proposals and have selected a proposal from the Regional Business Center at the University of
Northern Iowa. We had our kickoff meeting with the consultant team and other local interested
parties last week. The feasibility study will be proceeding through April.
January 12, 2010
Page 2
D. Moss Green Urban Village
A voluntary annexation application has been received for a proposal to create the Moss Green
Urban Village development. This is a mixed-use development which would create an office
research park with a mix of uses west of Pearson in northeast Iowa City. The developer has
indicated his intention to use green building and development techniques. A significant issue is
the need to extend infrastructure to the proposed annexation area, and a plan for doing so is
currently being proposed by the developer. This project would extend Oakdale Boulevard west
from Iowa Highway 1 to provide access to the proposed development area.
E. Expansion of Southeast Industrial Park
We are currently completing the preliminary plat for the City's proposed expansion of the
southeast Iowa City industrial area. We continue to market the area to the wind power industry
specifically and for other general industrial uses as well. We hope to have a plat to the Planning
and Zoning Commission by late January/early February. The plat will separate the 173-acre site
into individual building lots which can be marketed to specific businesses.
Bring any questions to the January 19 meeting.
ppddir/mem/ecodevcomm-1-19-20 1 O.doc