Iowa City Council supports South District business revitalization proposal

IOWA CITY — The Iowa City Council unanimously supported the first consideration of creating a self-imposed taxing district in the city’s south side brought forward by the South District Neighborhood Association.

The first consideration of an ordinance to create a self-supported municipal improvement district, or SSMID, was approved by a 6-0 vote Tuesday evening, with council member Laura Bergus abstaining. The proposal looks to revitalize businesses in the Pepperwood Plaza south of Highway 6 and was unanimously backed by the city’s planning and zoning commission last month.

With a SSMID, property owners volunteer for a tax to be collected and invested back into the defined area for revitalization. Such districts have been established in the Iowa City Downtown District, downtown Cedar Rapids and Czech Village/New Bohemia.

Council member Susan Mims said she was on the council when it considered the downtown district’s SSMID and called it an educational process.

“What we saw in the downtown area in terms of trying to get those signatures at first was nobody wanted to pay the extra taxes,” Mims said. “They were really concerned about why they should have to pay that and what they were going to get for it, and I think it's become very, very clear that that can be very beneficial.”

Council member John Thomas said he sees the SSMID proposal as “the next step in the evolution of the South District, which I think is impressing all of us.”

The South District SSMID would include properties south of Highway 6 in the Pepperwood Plaza between Broadway Street and Keokuk Street.

Map of proposed South District SSMID

The South District SSMID would cover properties south of Highway 6 in the Pepperwood Plaza.

The SSMID would generate about $104,000 annually, with a levy of $5 per $1,000 assessed taxable value. The levy would begin July 1 — the start of fiscal 2023 — and last five years unless renewed. The proposal lists three main uses for the tax: supporting marketing and business retention, enhancing the appearance of the district and hiring an executive director.

Angie Jordan, president and co-founder of the neighborhood association, shared how business revitalization in the South District is “a vital piece to our larger grassroots neighborhood revitalization effort.”

Jordan, one of 13 speakers expressing support during a public comment period, said the SSMID is a way to tackle shared challenges in a “meaningful, sustainable way.”

Tasha Lard, who owns JD Beauty Supply in Pepperwood Plaza, said she supports the SSMID and wants to see businesses in the area continue to grow.

Kate Moreland, president of Iowa City Area Development, said it’s critical to navigate economic recovery in an inclusive way, which the SSMID can help with. Economic leaders from Iowa City Area Business Partnership, Think Iowa City and MidWestOne Bank also expressed support.

"I believe we're going to look back on this time as a very pivotal and key moment when we made the investment that will be transformational for this part of our community,“ Moreland said.

The ordinance will need to pass two more considerations by the council before it is fully approved. The next council meeting is Jan. 4, which will be the first meeting with incoming council members Shawn Harmsen and Megan Alter.

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