116 3rd St SE
Cedar Rapids, Iowa 52401
CEDAR RAPIDS — The Cedar Rapids City Council voted Tuesday to allow a $2.75 million, third-party loan for Frew Development Group LLC, which is redeveloping Westdale Mall, 2500 Edgewood Road SW.
This marks the sixth amendment to a $90 million plan to revitalize a beleaguered Westdale Mall, to which the city contributed $5 million up front plus committed additional tax rebates as part of a 2013 development agreement worth $11.7 million. Originally, the agreement called for a plaza-like design with green space, but has been amended to a series of shopping strips, including Burlington Coat Factory, Younkers and JCPenney.
Tax increment financing, or taxes generated based on the increased property value, will be used to pay off the loan, according to city documents.
The new loan pushes back the payoff timeline of a separate city guaranteed loan of $11.5 million in 2015. That loan has a current balance of $9.865 million, according to city figures.
The city will be removed as guarantor of the loan in June 2020 if Westdale is current in its payments, has net operating income of $925,000 and has $500,000 in cash reserves in excess of the operating reserve.
City Council member Scott Olson said the new loan will allow Frew to complete infrastructure work at the old Von Maur site and other site work.
'We are pretty confident this is a good move for them; it will allow them to get some things done,' Olson said. 'And, it's a real positive for the city. ... They are definitely well on track to meet their goals ahead of time.'
Supporting the case for allowing a new loan, city staff noted the mall's assessed value has increased substantially from $7.3 million in May 2013 when the city initially struck a deal with Frew. The assessed value sat at $42.1 million as of Jan. 1, and the assessed value is expected to reach $57.1 million by Jan. 1, 2018, when a handful of underway projects are complete.
The original 2013 pact calls for Westdale to reach $60 million in assessed value by Jan. 1, 2022.
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