Coralville’s arena could be third major addition to Iowa River Landing master plan

CORALVILLE — The initial vision to transform Coralville's 180-acre brownfields site into a successful Iowa River Landing, created close to 30 years ago, included a trio of anchor tenants.

The idea was that those three anchors — a hotel and conference center, a big-box retailer and a major entertainment source — would be the catalyst to spur private development of retail stores, restaurants, office space and housing options.

Coralville's Marriott Hotel & Conference Center was set to fill the first need when it was completed almost a decade ago. In 2013, Von Maur became Iowa River Landing's anchor retail store.

Now, a pending request for $12 million in state money to help fund a 6,216-seat multiuse arena could help the plan clear its last hurdle. The Iowa Economic Development Authority board could make a final decision within the next two or three months.

'If the arena continues to move forward and be developed, that will be kind of the third and final phase for Coralville's long time master development plan of this 185-acre district,' said Josh Schamberger, president of the Iowa City/Coralville Area Convention and visitors Bureau.

The money is made possible through the authority's state-funded Reinvestment District program, which allows new state hotel/motel and sales taxes to be reinvested within approved districts. Approved projects must guarantee they will open debt-free.

A funding outline for the $69 million multiuse arena and Iowa Fitness and Sports Performance Institute includes several tax credits, corporate and individual giving and sponsorships.

Grinnell, Mason City and Sioux City also have sought a piece of the $41.5 million available through the program.

The 6,216-seat arena and fitness institute would support demands for the University of Iowa's IceHawks hockey club, area youth hockey team the Blizzards. Developers with the project also are seeking collaboration with the United States Hockey League.

Other projects in Iowa River Landing's reinvestment district proposal include a $9 million — nearly $7.5 million are in private investments — retail building that also would provide a new home for the Antique Car Museum of Iowa and Johnson County Historic Society Museum.

The $34.4 million Drury Hotel is set to begin construction next spring, and two other mixed-use buildings — estimated at $37 million for both — are expected to add hotel rooms, residential units, and retail and restaurant space.

All told, the 180-acre project is poised to see roughly $174 million in investments.

While the arena would be the sole recipient of the $12 million in funding, Schamberger said the entire area is tied to the success of the project.

'None of that happens without the arena being one of the three drivers,' he said. 'Conference centers and arenas don't make money as stand-alone entities.'

If funding is approved, demolition to prepare for the arena and attached fitness center could begin yet this year.

Brownfield beginnings

In the late 1980s, a Coralville Community Planning and Vision committee was asked to consider the city's first impression on visitors who entered the community from Interstate 80.

A ringing consensus was that the blighted area along I-80 and First Avenue was nothing short of an eyesore. The area at that time included an industrial park with ground contamination, a truck stop, a million-gallon petroleum tank, a scrap yard, strip club and an adult bookstore.

'The city council of that time and city administration realized that First Avenue was the main gateway into the community,' Coralville Mayor John Lundell said. 'It was an unwelcoming, unattractive area.'

Much of the next decade was spent purchasing land that made up the 180-acre plot — at one point the area included 110 plats among more than 70 different property owners. Cleanup involved removing arsenic, lead and petroleum from the contaminated ground.

At one point, in the early 2000s, the IRL plan included, of all things, a massive indoor rain forest. That $280 million project aimed to include a four-acre indoor rain forest biome with a 575,000-gallon aquarium to study endangered ecosystems.

However, the project was scrapped when it appeared the project developers were struggling to secure the necessary funding.

The decision to step away from the rain forest was made easier with progress on what became the first phase of Iowa River Landing construction in 2006 — the 286-room Marriott Hotel and Conference Center.

In 2011, Coralville secured a deal with Von Maur — including $9.5 million, plus other incentives — to relocate the clothing store from Iowa City's then-Sycamore Mall to a new building in the Iowa River Landing.

Coralville's Von Maur opened about two years later.

In the meantime, other local additions to the Iowa River Landing have included Backpocket Brewing, Homewood Suites by Hilton, 30 hop restaurant, Scratch Cupcakery and WineStyles.

In addition to the office and commercial locations popping up in Iowa River Landing, apartments recently have begun to be added, providing the first opportunities to live in the district.

Some development — such as the University of Iowa Health Care's medical clinic — have been a pleasant surprise, Lundell added.

'That's a huge presence in the district in terms of jobs and services to the whole city,' Lundell said. 'That's a big piece of the IRL today that wasn't in our initial visions.'

Controversial growth

Iowa River Landing's rapid and sustained growth hasn't come without its share of controversy.

Some residents criticized the city's use of tax increment financing to spur development — particularly for a 2011 multimillion-dollar deal that lured Von Maur out of neighboring Iowa City into Iowa River Landing.

The deal even led to the city of Coralville and a group of developers and residents filing lawsuits against each other over the Von Maur deal. While those lawsuits eventually were dropped, state legislators in 2012 added reporting requirements to TIF law. Coralville's use of the redevelopment tool was used as a key example for the need for added regulation.

City investment into Iowa River Landing also contributed to the community's mounting debt, which in December 2015 was reported at about $240 million.

The debt, along with the city's investment into traditionally private sector ventures such as the Marriott, have often been cited by Moody's Investors Service as a key factor behind the city's bond rating downgrades.

In December, Coralville's general obligation bond and water enterprise revenue debt ratings dropped from Baa 2 to Baa 3. The city's annual appropriation debt also was lowered, from Ba1 to Ba2.

Many of the factors surrounding Iowa River Landing became major focal points in the city's 2013 general election, which was hotly contested with 12 total candidates and ended with a record voter turnout above 24 percent.

In recent years, Coralville hired financial consultant Springsted Inc. to help the city address bond rating downgrades.

Controversy aside, Mayor Lundell said Iowa River Landing would not be a success story without those investments.

'I think the results speak for themselves, what we've done through financing the projects down there were absolutely necessary to get to a point where it can be self-sustaining,' he said.

More growth on the horizon

Many elements in Coralville's upcoming $174 million project will start coalescing in the next few years. But a big chunk of Iowa River Landing's south side remains underdeveloped.

Lundell expects that to change soon.

'I think another critical outcome of the arena project will be the redevelopment of an area in the district south of Ninth Street,' Lundell said. 'Predominantly up to this point, we've intentionally focused on the area north of Ninth Street ...

I think the arena project will kick-start additional development remaining to the south.'

Those developments remain undetermined at this stage, but Lundell said it will be largely privately funded.

Conceptual plans created a few years ago suggest that portions of Iowa River Landing along the Iowa River could get some city investment in regard to recreational offerings.

From added trailways and an outdoor amphitheater to even a zip line or white-water additions to the river itself are possibilities.

Lundell said it's all about rounding out the IRL into the district first envisioned more than 30 years ago.

'We wanted a district where people could live, work and play,' he said.