116 3rd St SE
Cedar Rapids, Iowa 52401
IOWA CITY - The city council has approved the first step in providing tax increment finance assistance to a Colorado-based grocery store.
The Iowa City Council approved the first step in potentially offering $1.75 million in tax increment finance (TIF) dollars to Iowa City Marketplace to prepare the mall's former Von Maur location for future tenant Lucky's Market. The city would do so by amending the neighborhood's urban renewal plan to include the proposed project - which is required by state law for TIF projects.
Mayor Pro Tem Susan Mims clarified that Tuesday night's vote - 5-1 with councilors Jim Throgmorton opposed and Rick Dobyns absent - is merely the first step to begin formal discussion on a TIF.
'This is not a TIF and we can't get to that until we get to this,” she said, adding that the proposal aims to address significant financial woes in not only the mall, but the surrounding area since Von Maur moved to Coralville last year.
'It's an absolutely critical, critical piece of real estate in terms of tax revenue for the city, but also for a good, stable retail environment for the east side of the city,” she said. 'This is a very key part of the city that has suffered with Von Maur leaving.”
Iowa City Marketplace - formerly Sycamore Mall - lost its anchor tenant, Von Maur, last year when the apparel store relocated to Coralville's Iowa River Landing after being offered a TIF package estimated between $11 and $16 million from the city.
With Von Maur and other retailer departures, the mall's value dropped from $16.4 million in 2011 to $10 million in 2014. An estimate based on property valuation indicates the mall's tax contribution dropped from $669,778 in 2011 to $367,803 in 2014.
In order to receive the full $1.75 in TIF funds, Likely a stipulation in the TIF, Iowa City Marketplace officials would have to bring the center's assessed value back up to $16 million, which is anticipated to take place if the mall reaches full occupancy.
However, Throgmorton questioned if TIF would be the best avenue in stabilizing the mall.
'The question has to do with the use of TIF as an instrument in enabling one particular retailer to move into that mall,” he said.
Earlier this month, New Pioneer Co-op's board of directors sent a letter to the council expressing displeasure with the city's plans to provide Lucky's Market, who would compete with New Pioneer, with financial aid to locate in Iowa City.
That said, council member Kingsley Botchway said any correspondence he has seen has been from a strictly business angle, with little consideration for the larger picture of the entire mall and neighborhood.
'They had not considered populations in that area that have suffered because of Sycamore Mall problem, so to speak,” he said.
Lucky's Market, a Boulder, Colo. natural food grocery store with plans to open a 34,000-square-foot store, is expected to bring 7,500 to 10,000 customers to the mall every week, with hours of operation from 11 a.m. to 7 p.m.