TIF district planned for east Iowa City neighborhood

IOWA CITY – The City Council is scheduled to vote Sept. 20 on a tax increment financing ordinance for the Towncrest neighborhood on the city's east side.

The city is hoping for a public-private redevelopment of the area. It was originally intended as a medical campus south of Muscatine Avenue, but many of the medical offices have relocated and vacancies and lack of maintenance have had a negative effect on the area.

Last December, the council approved an urban renewal plan for the district, with tax increment financing, or TIF, one of the incentives expected to help spur work in the area.

Under a TIF agreement, a land owner typically keeps for a period of time the difference, or increment, between the existing property taxes and the amount generated by the redeveloped land.

Critics view TIFs as unnecessary tax breaks for developers.

Three readings of the proposed ordinance are required for its approval.