Iowa City plans incentives for Towncrest development

The city is ready to offer financial incentives to property owners participating in the redevelopment of a mostly commercial neighborhood on the east side.

The city has spent two years meeting with the public and design firms about the Towncrest neighborhood, which is primarily east of First Avenue along Muscatine Avenue.

It was originally an area developed as a sort-of medical campus south of Muscatine Avenue, but many of the medical offices have relocated and vacancies and lack of maintenance have hurt the image of the area.

The goal is to have a public-private partnership that results in new buildings, facades, walkways, plantings and street lighting.

The design plan calls for existing structures to keep their distinctive brick facades while applying more contemporary urban materials. For new development, the emphasis would be on bringing structures toward the street, putting parking at the rear of buildings and having greater transparency into the ground floor, according to the plan.

On Dec. 7, the City Council approved the urban renewal plan for the project.

One way to encourage the private sector to get involved is to use tax increment financing, Jeff Davidson, the city's planning and community development director, said in a memorandum to the council. The city often uses TIF for major development or infrastructure projects, with the land owner getting to keep for a period of time the difference between the existing property taxes and the amount generated by the redeveloped land.

Another option for Towncrest is grants between $5,000 and $25,000 for renovated commercial building facades.

The city also could offer gap financing, or an interim loan, to support the development of commercial, residential and mixed-use buildings, Davidson said. The amount would be determined by the number of jobs created or retained, or the amount of new property taxes created, he said.

Grants of up to $25,000 are available for architectural, engineering and environmental assessment services, Davidson said.

Also, loans from federal Community Development Block Grant funds are a possibility for businesses that meet income guidelines.

Requests for assistance will be evaluated by the city's economic development staff, Davidson said. Projects asking for more than $25,000 will need City Council approval.