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IC councilors approve Moen's Dubuque Street development

BY KRISTEN EAST | APRIL 04, 2012 6:30 AM

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Local developer Marc Moen will be assisted by city funds as he moves forward with plans to develop downtown, but city officials are wary of the upfront costs.

The Iowa City city councilors at their meeting Tuesday approved an agreement with Central Park LLC to redevelop space at the 114 S. Dubuque St. Moen, who formed Central Park LLC, plans to construct a 14-story mixed-use commercial and residential building in the space currently occupied by the Wells Fargo Bank.

Moen has asked the city for a $2.5 million tax-incentive financing loan, and several city officials warned councilors of the risks involved with upfront lending.

"The city's risk is increased because it is upfront money, just like the Plaza Towers was [a risk]," said Jeff Davidson, the director of Planning and Community Development. "But this is ameliorated by the agreement."

Councilors approved the agreement on a 6-0 vote.

The agreement allows for the upfront TIF money to be provided if Moen allows the city the right to a minimum assessment of roughly $5.8 million on the 114 S. Dubuque development and roughly $1.3 million on the Plaza Towers condominium unit. The agreement also stands as long as there is roughly 7,000 square feet of high end office space in the Dubuque building.

Councilor Jim Throgmorton questioned why Moen's firm couldn't fund the entire project.

Moen said many factors lend to the necessity of a TIF loan.

"It's the tightness, smallness of the site," he said. "It's the quality of the building, architectural design … We did an analysis, and the city was involved in that. There's a gap of $2.5 million."

Davidson said it's a reasonable risk for the city to take.

"It's because it's a residential unit targeted to nonstudents … as well as the three office floors … those are the components of the project that require the city's assistance," he said. "It's a reasonable risk to take."

Mayor Matt Hayek didn't express any significant concern about the project.

"The market is changing," he said. "There's increasing requests for upfront money. We've made a conscious decision to take on that risk."

Hayek said the city needs to recognize changing trends in the development industry.

"There is a risk to the city, and we do acknowledge that," he said. "There are protections to the city embedded in this agreement, and there's not an absolute guarantee of repayment. We're not going to be able to do this with all projects."

Councilor Susan Mims praised the project's details.

"I think the combination of the office space and nonstudent-oriented housing is a real asset for downtown," she said.


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