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University of Iowa eyes deal to build ’active adult’ apartments near Finkbine
30-year ground lease would pay $130K a year
IOWA CITY — Nearly four years after the University of Iowa announced plans to raze its nearly 60-year-old University Athletic Club and replace it with a hotel, administrators are seeking approval of a different deal that — in its first phase — would erect an age 55-and-up apartment complex on the university campus near Finkbine Golf Course.
The university would have no financial stake in the four-story, 110-unit rental project to be built by private developers, according to its request for approval from the Board of Regents, which is scheduled to consider it next week. And the university isn’t providing any equity or capital for the endeavor, though the building could revert to UI ownership in three decades if a lease for the land is not renewed, documents indicate. The documents do not reflect the cost of the development.
To kick-start the project, the UI is seeking permission to enter into a 30-year ground lease allowing Melrose Partners LP to develop 6.12 acres just southeast of Finkbine, on the site of the University Athletic Club that the UI razed in 2019.
As part of the lease, the UI would get rent of $130,000 a year, escalating 10 percent every five years, according to board documents. Under a development deal between Melrose Partners and the regents, a joint venture of Focus Development and Newbury Living would erect the “residential active adult rental complex with one level of underground parking.”
The proposal specifies the complex is for adults over age 55 — an important distinction for a property less than a mile from Kinnick Stadium and the UI Hospitals and Clinics.
“This highly visible site is off Melrose Avenue and serves as an important gateway to the university campus, especially to UIHC and Kinnick Stadium,” according to the proposal.
The land under the development would, as university property, remain tax free. “Only the value of the new building would be subject to local property taxes,” the proposal notes.
The lease and development agreement are characterized as “phase 1” of redevelopment plans for the former University Athletic Club site, which besides being adjacent to Finkbine is also by the new $10 million 19,000-square-foot Nagle Family Clubhouse, which opened in April 2020.
Although developers would obtain private financing to construct, own and operate the facility, UI officials report they have “been actively involved with the developers regarding the site layout plan, its connection to Finkbine Golf Course and the Nagle Family Clubhouse, the new building’s architecture, and the landscaping.”
If at the end of the 30-year lease developers don’t want to extend it, “the building reverts to university ownership.”
Request for ideas
In summer 2017, UI officials made plans to issue a call for proposals from developers to replace its storied University Athletic Club with a hotel capable of serving the golf course, UIHC and larger campus community.
Then in May 2018, the university issued a call for qualifications from development teams interested in re-imagining more than 44 acres encompassing the club property, but also stretching to the Iowa Northern Railway.
That re-imagining encouraged developers to envision a high-service boutique hotel, micro conference center, private membership club, retail shops or residential housing. In new board documents, the university indicated it received “many responses” to that call.
Following in-person interviews in February 2019, the university identified two finalists and eventually chose the Quad Cities-based Focus Development to move forward with developing the land.
“Over the past two years, the university and Focus Development have analyzed and refined proposals for several housing, commercial, entertainment, and food/beverage venues at the various sites,” according to board documents. “Each location is unique and each would be developed in different phases over the next few years.”
The initial UI request doesn’t specify what it might propose for future phases.
Joint venture partners
Focus Real Estate Development Inc. is an affiliate of Build To Suit, a design-build and development firm with offices in Bettendorf and Coralville. Its team members include its president, Paul Boffeli, and former Hawkeye football player Nate Kaeding. Its projects range from apartment complexes to banks to warehouse and retail space to schools — including Regina Catholic Education Center in Iowa City and the TBK Bank Sports Complex in Bettendorf.
Newbury Living is based in Des Moines and specializes in “the ownership and management of active adult and other multi-tenant residential complexes,” according to board documents. On its website, Newbury reports managing “more than 50 apartment communities throughout Iowa and one in South Dakota.”
As the proposed project straddles two municipal jurisdictions — Iowa City and University Heights — UI officials and developers spent the last year working with city officials, planning and zoning commissions and city council members “to relocate municipal boundaries so the project is in a single jurisdiction.”
The parties have reached a deal that severs the project land from University Heights and annexes it into Iowa City. University Heights agreed in exchange for two items: Proportionate sharing of property tax revenue generated by development on the annexed land; and UI conveyance to University Heights of a 1.25 acre plat of wooded ravine land near the new development.
“The university has no use or need for the land,” according to board documents. “However, the parcel can serve as a gateway from Melrose Avenue to other University Heights parkland.”
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