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Iowa City potentially funding another TIF

BY NICK MOFFITT | DECEMBER 02, 2014 5:00 AM

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The Iowa City City Council today will discuss approving a $1.8 million tax increment financing for a development at the former site of Hartwig Motors on Riverside Drive.

The financing would go towards developing a 96-unit rental housing project that would cater toward non-undergraduate students, according to Kevin Hanick, the developer of the project.

“Frankly, there is an underserved population that is non-undergraduate students in Iowa City,” he said.

The development total construction cost is $16.1 million for a 96-unit building in which 12 units will serve as workforce housing and managed by the Iowa City Housing Fellowship.

Hanick said the reason TIF is being requested is because of the city’s request for a high standard for the project with high-quality amenities.

Tax increment financing is a way for the city to give financial incentives to developers without raising taxes in the area. The tax increment in this case will be paid out over 10 years and is the difference between tax revenue before the TIF district and property tax after TIF.

Mayor Pro Tem Susan Mims said she had previously pushed through the TIF decision at a council Economic Development Committee meeting, but said her vote would heavily depend on council discussion at today’s meeting.

Hanick said public support for the development is a long-term positive for Iowa City.

“The immediate impact is that it is a catalyst project in a blighted area of town,” he said.

“And if you look at the long-term tax dollars over a longer period, taxes after the TIF will be higher, so overall, a win-win.”

Iowa City resident Mary Murphy, who is outspoken against TIF in this instance, said that if granted, she thinks the financing could cause problems in the future.

“To me, if we grant this for a primarily residential standpoint, it sets a bad precedent,” she said. She believes that using it for residential developments is not a good use of the funds, because everyone will start requesting it.

Mims said the development has the opportunity to kickstart the west side of Iowa City.

“This is a key property in terms of a first big project on the West Side,” she said. “I think it could be a big boost for that to be there.”

Councilor Jim Throgmorton, who had previously voted against the TIF at Iowa City Marketplace, said that while his mind isn’t made up about how he will vote this time, he thinks this project is different.

He said the area of the city the development would be in has declined over the last several years, and the project could play a big part in urban renewal.

“In this case, I see clear evidence that without public support, a development of this type just won’t happen,” Throgmorton said.


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