North Liberty approves incentive for $100M development district

NORTH LIBERTY — The North Liberty City Council has unanimously approved a $20 million incentive to make way for the development of 65,000 square feet of commercial space and 350 apartments across 20 acres located south of North Liberty’s Community Center.

The Urban Central District, as termed by the Lion Development Group, is estimated to cost over $100 million and would include a mix of banks, restaurants and retail spaces, as well as the residential units ranging from studios to three-bedroom units. Work on the property could begin as soon as this summer, though there is no firm time for completion.

Download: North Liberty Urban Central District.pdf

The area has been underdeveloped due to existing buildings on the property and flood mitigation required for development. Parts of the property are in the flood zone from nearby Liberty Centre Pond.

Lion Development Group estimates the work required to make the land ready for development would cost about $27 million, making the price per square foot one of the highest in the area.

“The 20 acres to become the (Urban Central) district has sat as undeveloped for up to 40 years for the sheer reason that is economically not feasible to develop these parcels without a significant public-private partnership, exorbitant acquisition cost, relocation of existing businesses, paired with extreme development costs,” Brandon Pratt of Lion Development Group said at a council meeting earlier this month.

The work includes flood mitigation, demolition of existing buildings and managing elevation changes. In addition, the development group said navigating railroad tracks and complying with Iowa Department of Natural Resources regulations for a stream in the area contribute to the difficulties.

“The goal of the UC district is to bring in a more urban engagement and vision for those that both choose to visit and or live inside the district. … We are looking to transform 20 acres of underutilized ground in the heart of North Liberty into something new and exciting that hasn't been done before,” Pratt said at the recent City Council meeting.

Mitigating the city’s financial risk

In the case of the Urban Central District, the development team requested an up-front investment of $20 million from the city due to the challenges with preparing for construction, as opposed to property tax rebates after a project has been completed.

Since the city is offering the incentive up front, it will borrow the $20 million and repay the loan with property taxes collected from the project once it is complete. Now that council has approved the request, city staff will work with the development group on an agreement to protect the investment.

“The request is $20 million — that be the largest incentive that the city has ever undertaken. That being said, this would probably be the largest economic development project the city's ever been a part of in terms of parcel of land and the redevelopment work that needs to be done,” City Administrator Ryan Heiar said at a council meeting.

City Council members noted the project would improve the area around Cherry Street, which was identified by Greater Iowa City Inc. as a strategic investment district — meaning an area with potential for economic development but that is now underutilized.

Lion Development Group is made of up Iowa City metro area residents, with Pratt being a North Liberty native.

“What I'm excited about with this project is it's a demonstration of investment in our community. There's skin in the game from both the developers … but then also from the city of North Liberty. And that's really an illustration of a true public and private partnership,” said council member Brian Leibold.

Comments: megan.woolard@thegazette.com

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