Development plans advance on ACT campus in Iowa City

IOWA CITY — The future of the nearly 400 acres of the ACT campus on the east side of Iowa City is starting to become clearer.

Iceberg Development Group of Bettendorf has been talking with ACT since May 2024 about buying 48.6 acres of the campus south of Interstate 80 and east of North Dodge Street.

Though that deal still is being finalized, the Iowa City Council last week unanimously agreed to rezone the property for mixed use — retail and offices — and residential development.

Iceberg has not announced how it plans to develop the parcel, but the developer indicated in the past that existing ACT office buildings could be turned into senior housing.

And Steve Long, an Iceberg representative and Iowa City developer with Salida Partners, has been floating ideas for developing an additional 300 acres of the ACT campus.

Long told Iowa City Council members they would be seeing him and other members of the project team “a lot” in the coming year.

He specifically identified the potential for commercial development and other opportunities along Dodge Street/Highway 1.

“We look forward and we're going to work in the city staff as a comprehensive plan evolves for the eastern 300-plus acres,” Long said. “We have an opportunity here to bring something unique that fits the comprehensive plan and the goals of Iowa City. And so I'm excited to be a part of this.”

The development group would need to come back to the council to ask that the larger area be rezoned to allow for commercial development.

With the exception of the ACT office buildings, the ACT campus still is largely underdeveloped.

The Johnson County Assessor’s Office evaluated the largest piece of the ACT property at $15 million, though the campus has multiple other parcels.

‘Second life’

  Buy Photo

“I’m very happy to see a second life for that beautiful space in Iowa City,” Iowa City Council member Josh Moe said last week.

The potential development is the latest in a series of moves ACT has made since it was bought by a Los Angeles-based investment firm, Nexus Capital Management, in April 2024. The new owner turned the nonprofit into “a type of for-profit company, under the ACT name and brand,” along with a new ACT nonprofit headquartered in Iowa City.

ACT, a fixture in Iowa City since its founding in 1959, had been running deficits during the pandemic, with most of its remaining employees working remotely. It plans to sell most of its campus and lease parts of it.

  Buy Photo

In 2022, the Iowa City Community School District bought the building at 301 ACT Dr., formerly known as the Tyler Building, for $8.7 million. It’s using the building to house its Center for Innovation and as a space for specialty career and project-based learning.

And University of Iowa Health Care signed a $12 million, 20-year lease for a former ACT warehouse and office space for its pharmacy services group.

Though the plans to repurpose ACT’s existing buildings into housing have been approved by the Iowa City Council, the rezoning is conditional.

As developers finalize plans for development, they’ll need further city approval for building permits. Since the ACT campus has never been platted, or mapped for construction, developers will be required to go through the subdivision process to ensure that the area has an adequate, interconnected street network.

Tax base growth

The city also is expecting it will receive more tax revenue as the ACT land is sold and developed, though the increases will be spread over future years as the development occurs, City Manager Geoff Fruin said.

“While we're excited to see the redevelopment of existing buildings or the repurposing of existing buildings, we also know that there will be a lot of opportunities for new construction, and those will bring great value to the tax base,” Fruin said.

Iowa City also has a “sensitive areas” ordinance, which in the case of the ACT campus would prevent any development that completely clears its woodlands.

“What we require of somebody is that they do an inventory of the sensitive areas, so that they have a professional environmental engineer document all the sensitive areas, and then our ordinance would prescribe how much of that they can alter and how much they have to protect in place,” Fruin said.

City staff, he said, will approve development plans to limit environmental impact while still allowing for construction.

Comments: megan.woolard@thegazette.com