Von Maur anchor store kicks off Iowa River Landing retail with $9.5 million city pricetag

UPDATED 9/23/11 TO INCLUDE SEVERAL KEY PROVISIONS OF THE DEVELOPMENT AGREEMENT TO BE CONSIDERED BY THE CORALVILLE CITY COUNCIL

+ The consideration paid for the Von Maur parcel will be $10.

+ Von Maur will receive a capital contribution from the city and developer to offset its building construction expenditures in the amount of $9.47 million made in five payments of $750,000, $2 million, $2.4 million, $2.4 million and $1.92 million. The first will be made when Von Maur commences design work or enters into a binding agreement for development. The last will be made on the Von Maur initial opening date.

+ Von Maur will pay its annual share of common area expenses of 25 cents per square foot of the floor area of the Von Maur. After five years, the payment will be adjusted upward or downward with the consumer price index.

+ Von Maur will pay its share of the cost of removing snow and ice from the walkways, drives and parking areas.

+ Real estate taxes levied against the Von Maur parcel and required to be paid by the city will be capped at $150,000 during the initial 12-month period beginning on the payment commencement date, and on each anniversary the cap will be adjusted with the consumer price index. No increase will be greater than 2 percent.

+ The city will indemnify Von Maur for any special service financing, levy, special assessments or other special taxes within the first three years after payments commence.

CORALVILLE - The city of Coralville and Von Maur made it official on Thursday: the chain will anchor a 85,000 square-foot department store at Iowa River Landing.

But the deal won't come cheaply.

City Administrator Kelly Hayworth said Coralville put together a nearly $9.5 million incentive package to attract the retailer. He said the city will pay for construction of the entire building, but Von Maur will pay the expenses of fitting and furnishing the interior.

The costs will be recovered, Hayworth said, by attracting more retailers and retail traffic over time.

The city had been looking for a retail anchor for the project for about three years, Hayworth added. The process had been delayed by the nationwide economic downturn.

Jim von Maur, the retailer's president, said Von Maur considered Coral Ridge Mall but decided on Iowa River Landing because of the diversity of businesses it will offer. They include a new University of Iowa Healthcare outpatient facility that is estimated to attract about 170,000 visits in the first year.

“I promise all of you it's going to be a beautiful facility,” von Maur told a small crowd Thursday during a groundbreaking at the new Homewood Suites Hotel at Iowa River Landing. He said the store will have a wider selection than most, great visibility, and will serve as a landmark for the community.

“We promise you'll be really proud of it,” von Maur said.

Hayworth said the number of prospective retailers interested in the development has increased lately as the Von Mauer deal solidified, and he expects more retailers to show interest as construction begins.

“We're really on a roll,” Hayworth said.

The Von Maur chain, based in Davenport, operates 26 locations, including stores at Sycamore Mall in Iowa City and Lindale Mall in Cedar Rapids.

Speculation is rampant that Von Maur will close the Sycamore Mall location after it opens the larger Iowa River Landing store. Jim von Maur offered no assurances in that respect Thursday. He did say the company's space lease at Sycamore Mall is not even close to expiration, and the company has not decided the future of that store.

Hayworth said he was unaware that von Maur considered Coral Ridge Mall. He said the city doesn't have any control over the fate of the Sycamore Mall location of Von Maur.