UI students present new vision for Iowa City's Towncrest district

BY QUENTIN MISIAG | MAY 15, 2013 5:00 AM

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The Towncrest neighborhood on Iowa City’s East Side once stood as a signature medical district from its inception in the 1950s. With a plethora of parking, patients and visitors could drive up, go to their respective appointments, and be on their way.

As the city continued to grow, however, new developments such as the Northgate Business Park, just north of Interstate 80 off Dodge Street, drove visitors and money out of the nearly 50-acre Towncrest complex, leaving it dilapidated and a city-designated “slum” in 2010.

But nearly 15 undergraduate students in the University of Iowa Tippie College of Business’s Topics in Finance course believe the area can be saved and ultimately redeveloped into a thriving commercial corridor, lined with restaurants, shops, offices, and housing. The group also compared the area to downtown Iowa City, Cedar Rapids’ New Bohemia district, and the West Benton Street and Mormon Trek Boulevard corridor.

In 2008, the city targeted the area for redevelopment and implemented public workshops in 2009 after the Des Moines-based RDG Planning and Design in conceptualizing the area’s future. Economic development incentives, including TIF expenditures and redevelopment catalyst funds, are being offered by the city to assist developers in undertaking projects. The two new medical office buildings about to get underway represent the first new buildings to be constructed as envisioned under the urban-renewal plan.

“We’ve got to get some critical mass in there,” said finance lecturer John Gallo, the course instructor, said about bringing in new retail and restaurant offerings. “Right now, it’s functionally obsolete, and some of these buildings have deteriorated to the point that they have to be demolished.”

Gallo said he estimates an initial $2 million to $2.5 million in investment will be needed in order to act as an incubator in luring future tenants and residents.

UI student Zach Steinhoff, who conducted the overview of the current Towncrest conditions, said vehicular traffic is a promising component to the area’s success. To date, an average of 10,150 cars travel along the nearby First Avenue corridor, while the intersecting Muscatine Avenue sees 15,800 vehicles.

This is the second-consecutive year Gallo’s students conducted a local feasibility study. He taught a similar class in spring 2012 that made a proposal to the City of Cedar Rapids regarding the Westdale Mall area.

That $90 million redevelopment of the mall is now moving forward in part with a number of student recommendations.

Although current reinvestment remains limited, Gallo, UI students, and city officials pointed to a number of projects in the works. Among them include a new 14,500-square-foot commercial building by MDK Development, a $500,000 streetscape plan, and a proposed $6.5 million 41-unit senior housing project by 3 Diamond Development LLC of Skokie, Ill.

The commercial building, soon to be home to three businesses, including Eye Associates and Towncrest Dental, is set to open Oct. 31.

City officials say it could generate $2.2 million in tax revenue for the city, county, and the Iowa City School District.

The William Street streetscape improvements — including new signage, bus stops, sidewalks, benches, and lighting — must be finished by November.

Iowa City community-development coordinators Tracy Hightshoe and Steve Long said that although the projects are promising, one factor seems to have deterred a number of investors.

“The land prices are way too high,” Hightshoe said. “We’ve had multiple developers asking for the area, and there are a number of medical offices that want to be there, but they want better facilities, too.”

Long noted that the city is committed to investing $10 million to $15 million over the long term and said recent investment and property-value numbers help indicate strong demographic vibrancy.

Despite the changing physical face of the area, one resident who has lived along the nearby Sterling Drive since March 1982, remains skeptical about new construction resulting in a turnaround. She said over the last 15 years, the neighborhood has fallen into a “depressed” state as low-income subsidized housing has moved in.

“It’s rundown, and we’re concerned,” local resident Maria Conzemius said. “They can’t keep letting Towncrest decline.”

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