Iowa City committee to discuss TIF financial aid for new hotel, student housing projects

IOWA CITY - Iowa City's three-member City Council Economic Development Committee's first meeting of 2015 will include discussion of two financial assistance requests for near downtown projects.

The committee, which consists of Mayor Matt Hayek and councilors Susan Mims and Michelle Payne, will meet noon on Monday at City Hall to discuss a request for up to $8.8 million in aid for a downtown hotel and up to $4.45 million in tax increment finance (TIF) rebates for a student housing tower.

Both projects represent some of the latest proposals to be added to the growing list of Riverfront Crossings District development.

'These projects are absolutely consistent with the plan,” Iowa City Economic Development Administrator Jeff Davidson said.

Davidson said in particular the hotel project aims to fill a need for more hotel rooms in downtown Iowa City, which is currently filled by hotelVetro and the Sheraton Iowa City Hotel.

'The fact is there is a lot of conference type things we would like to attract to downtown Iowa City that we just haven't had the hotel beds to support, this should get us closer,” he said.

The proposals:

' Kinseth Hospitality Company is proposing a 12-story Hilton Garden Inn Hotel at 328 S. Clinton St.

The total project is estimated at about $33.2 million, with Kinseth seeking $8.8 million from the city to cover the gap in funding.

According to city documents, city staff recommend providing the developer with $4.8 million in TIF rebates, $2.5 million in TIF grants from an adjacent property - the University of Iowa Museum of Art - within the Urban Renewal Area and a maximum of $1.5 million in a refund of hotel tax revenues collected at the planned hotel.

The 144-room hotel would bring the site's property taxes up from its current $11,000 to about $582,500 per year and create 81 full-time and 69 part-time jobs, according to city documents.

' 316 Madison LLC is requesting $4.45 million in partial TIF rebates to erect a 154-unit mixed-use multifamily high rise at 316 Madison St. All told, the building is estimated to cost $40 million to construct.

The project, proposed by Charlie Graves and Joe Clark, includes 16 one-bedroom units, 77 two-bedroom apartments, and eight three-bedroom units, for a total occupancy of 247.

Construction is anticipated to begin February and the building would be finished in late 2016, in time for the fall semester.

The Iowa City Council has already approved a height density bonus for the project, which will put the tower at 15 floors total.

The city's 2014 Economic Development Policy states that, when a developer seeks financial assistance from the city, TIF rebates are preferred to other cash upfront options because they ensure project completion before an amount of the property tax is rebated.

'We're trying to get out of the business of the city providing money upfront because there's an added financial risk there,” Davidson said.

If approved by the committee, either financial assistance request would require approval from the full council.