Iowa City approves purchase of downtown property on S. Linn Street

IOWA CITY — The city of Iowa City will move forward with purchasing a vacant downtown property for $4.5 million and taking a lead role in redevelopment efforts after a developer’s plans for student housing there will not move forward.

The Iowa City Council on Tuesday approved the agreement to acquire the property at 21 S. Linn Street, which formerly housed a U.S. Bank drive-through. The funds will come out of the city’s general fund reserves.

The city anticipates closing on the property in August. It will begin goal planning next year for the site’s redevelopment. City Manager Geoff Fruin said the project will be a “long-term effort” that comes back “full circle” since the property was the site of the old City Hall building, which was demolished in 1962.

“Through the acquisition of 21 South Linn, we can work to identify the exact uses that we would like to see on that property,” Fruin said. “We can identify some high level goals and partner with the private sector to develop that in a way that's going to add some long term stability and vibrancy to downtown Iowa City.”

Council members and local business leaders voiced excitement and support about the “strategic acquisition” and the city playing a lead role in redevelopment. Those who spoke also said it will be important to have the community involved in determining the future of the site.

Joe Reilly, speaking on behalf of the Iowa City Downtown District, said this gives the city the opportunity to identify a project that aligns with the retail, residential and community needs downtown.

"This strategic purchase of land will help shape the face of downtown for decades to come,“ Reilly said.

Chicago-based CA Ventures — which developed RISE at Riverfront Crossings, a luxury student apartment building — had wanted to build a 13-story mixed-use building with commercial space and student housing on the Linn Street site. The property was purchased in October 2021 from First National Bank for $3.8 million.

Recommended Reading

New high-rise may be built in downtown Iowa City

Shortly after purchasing the property, the bank was demolished and the surrounding surface parking lot was removed in anticipation of the project. CA Ventures’ site plan for the project was approved by the city in August 2022, which is the last step before applying for a building permit.

Earlier this year, the city began getting informal inquires on the property from other developers interesting in building student housing, Fruin said. Staff confirmed with CA Ventures that the group no longer intends to develop the site and is looking to sell the property.

Fruin said the city has a strong track record in facilitating private redevelopment that “provides long-term economic stability, introduces new uses and enhances the public realm.” Examples he listed included the Chauncey, RISE at Riverfront Crossings and the land that is now home to hotelVetro and Bread Garden Market.

Fruin said the Chauncey — a residential and commercial building at the corner of College and Gilbert streets that was built on city-owned land — took around nine years to complete. A similar timeline should be expected with the South Linn project, Fruin added.

Cady Gerlach, executive director of Better Together 2030, said the city’s acquisition of the property aligns with the goal in the “All in Vision” plan of creating a vibrant and inclusive community. It also allows Iowa City residents “to take an important role in the redevelopment of this critical property,” Gerlach said.

Nancy Bird, CEO of the newly merged ICAD and Iowa City Business Partnership, and local business owner Karen Kubby also spoke in favor of the acquisition and the impact it will have on downtown.

Council members Andrew Dunn and Laura Bergus, in their respective comments, emphasized how important it will be to have a community focused development, as well as community involvement during the process.

“I just think that there's incredible opportunities for what could happen in that space, and I'm grateful that this was brought forward so that we can take that proactive approach,” Bergus said.

A request for proposals will be created next year as a next step to identify potential partnerships. Fruin said the city does not have any preconceived plans of what should be built on the land.

During the planning phase, the city will use the site for construction staging for the Dubuque Street reconstruction and Senior Center exterior rehabilitation projects, according to the memo.

Comments: (319) 339-3155; izabela.zaluska@thegazette.com