Iowa City aims to bridge the gap for downtown businesses

For some businesses in downtown Iowa City, financial assistance from its downtown association made a big difference.

Iowa City Downtown District, with sponsorship from MidWestOne, supported many of the new businesses with grants for signs and matching grants to existing businesses for upgrades and storefront enhancements.

Nancy Bird, downtown district executive director, explained that the organization has tracked the turnover in both businesses and properties and have put those incentive programs in place to support a healthy business mix.

Bird said the district also bridged the gap with build-out grants for new retailers in spaces currently without kitchen hoods, to preserve those spaces for non-restaurant use.

One such business was 223 Baby Company, located on South Dubuque Street. Owner Macy Krall said she was encouraged to apply for the grant by other female downtown business owners.

“The funds were a motivator for sure,” Krall said. “We have other business lines and may have looked the other way if this support wasn't extended to us.”

Other new retail stores opening include Champions, the Knit Hole and The Herky Shop.

Bird said the ICDD will offer one final Retail Build-Out Grant for the next new first-floor dry goods store opportunity that meets the community needs identified in the ICDD’s Retail Strategy.

They also have created a retail referral program that incentivizes community members to help with the new business recruiting process through rewards.

Several new restaurants and food places opened downtown as well, including Tiki Tacos, Insomnia Cookies, Marco’s Island and Keto Kitchen.

Bird pointed out a new board game cafe, called Fortuna, set to open soon.

“We’re pretty excited about it for downtown because I think it's going to be a hit with younger audience but be intergenerational because everyone loves board games,” she said.

She noted it helps add to the mix of establishments, bringing some balance to the restaurant and entertainment scene.

Sam Gelman is the chef of the newly opened restaurant the Webster, on the first floor of the Markethouse building in the northside neighborhood. Gelman and his wife and partner, Riene, opened the restaurant — which offers a seasonally driven and regionally sourced modern American menu that changes regularly — in May, delayed from their initial plans for back in 2020 that were thwarted by pandemic shutdowns.

“We returned to my hometown to raise our family as well as to build a warm, convivial and vibrant restaurant of our own,” he said.

He pointed out they are making use of their main dining room, their chef’s counter and a private dining and event space.

“Everything about this restaurant is personal,” he added, noting that it’s named after his grandfather. “Growing up, this space was Pearson’s Drug Store. There was a small lunch counter with an old-school soda fountain in the back.

“My father worked across the street and my grandfather worked at nearby Mercy Hospital as an orthopedic surgeon. As a kid, I would come down and have lunch with my grandfather, father or both. It felt only natural that our restaurant would be named after him.”

In the Chauncey Building — which is evolving into being an arts and entertainment hub — SpareMe officially opened this week as a bowling alley, arcade and social lounge.

“This is an elevated entertainment experience in a colorful atmosphere, complete with a full bar and signature drinks,” said Jacob Larson, regional director-food and beverage for Hawkeye Hotels.

“We are proud to be part of a wave of other entrepreneurs and business owners that are looking forward to further rejuvenate our local economy,” Larson said.

“There is currently tons of activity and development downtown, which we are thrilled to be part of.”

New business owners all highlighted the importance of being part of the downtown core as a component of growing their business.

“Downtown is the heart of the city,” Larson said. “We want to be where the action is and be part of the unfolding story of Iowa City’s continued development. Iowa City always progresses forward — we want to bring something to the table and be part of what it means to visit Iowa City.”

“I grew up in this community and it’s important to us to be active members who build a team, employ great people and work to develop them,” Gelman added.

With the hopes of creating new communities within the downtown, a new elementary school, Tamarack Discovery School, and performing arts high school, Iowa Conservatory, have settled into homes in downtown Iowa City recently as well.

“Downtown is so many things to so many people. And different people within this community really have their own perception of what downtown is,” Bird said.

“If they love athletics, they know what a new football season means for downtown. If they are into the arts, they have a different lens for what downtown is because of all the cultural venues we have. And now we have this educational aspect which will bring more people downtown for even more reasons.”

This mix of businesses is very strategic and highly desired, Bird added.

“We're really fortunate to be in this situation and it's important to keep this momentum,” Bird said. “The mix of independent businesses and cultural venues in downtown Iowa City is what makes us unlike any other college market and these programs help us keep it genuine."

There have also been businesses expanding, relocating or reopening their doors, including Basic Goods, US Body Contour, Artifacts, Daydream Comics, Beadology Iowa, Revival and others.

Bird said she sees all this activity as reassurance that while we aren’t out of the pandemic yet, there will be a return of a more normal business environment to fill a larger community-based demand.

“We knew we had to start to think about recovery and doing what we could with the funding we have available and incentives because we recognized the impact on independent retail and restaurants.”

These openings and the flurry of recent business activity has brought downtown vacancy levels down to pre-COVID levels to 3 percent 4 percent in first floor space, according to the Iowa City Downtown District.

Bird, and many others in the community, are excited to see what else lies ahead. “We are continuing to push the envelope on inclusivity because this is very important to the organization,” said Bird.

“We want to see how we can help diversify our offerings so that all community members can find what they are looking for in downtown … . We want to bring new opportunities for people who have been traditionally under served. I just think there is a lot on the horizon for downtown Iowa City.”