Development proposals for a prime downtown Iowa City property have been narrowed to two after two of the potential developers merged their plans into a single project. During its work session Tuesday, the Iowa City council heard proposals for 21 S. Linn St. from Grand Rail Development, Salida Partners and Iceberg Development, the latter two […]
Development proposals for a prime downtown Iowa City property have been narrowed to two after two of the potential developers merged their plans into a single project.
During its work session Tuesday, the Iowa City council heard proposals for 21 S. Linn St. from Grand Rail Development, Salida Partners and Iceberg Development, the latter two recently combining their plans.
City staff had not reviewed the newly merged proposal prior to the work session, prompting City Manager Geoff Fruin to urge the council to delay its decision until April 1 or April 15, which would give staff time to analyze the plan and the public an opportunity to review it and offer input.
“After the conclusion of the presentations tonight, what we would do going forward is staff would ask for the necessary kind of background information on the merge proposal so that we can run that analysis,” he said.
Steve Long of Salida Partners and Jim Berg of Iceberg Development, currently partners in the
redevelopment of the former ACT campus spanning approximately 400 acres, decided to team up again for 21 S. Linn St.
The two felt that with Salida Partners’ focus on the community as a whole and Iceberg Development’s focus on affordable housing, merging the two plans would best benefit the city.
“This is truly for the community, and we've had a good time the past week or so talking this through,” Mr. Long said.
Key aspects of the proposal include:
- The Englert Theatre as an anchor tenant
- A two-story community gathering space with a performance venue with a mezzanine, greenroom, and back-of-house offices, which can open into an adjacent courtyard
- A shared “third space” managed by The Englert for an artists’ co-working and resource center
- A transparent dining and bar area on the corner of Washington and Linn Streets
- A 4,000-square-foot footprint on the second floor for Stories Project
- Four ground-level micro retail units, each about 500 square feet
- Alley revitalization
- 91 housing units, with a mix of affordable, market-rate and senior living
- Dedicated fourth floor for ACT offices
According to the proposal, the development carries an estimated construction cost of $41.7 million, with a $2 million land purchase, bringing the total project cost to $47.5 million. The developers are seeking approximately $9 million in tax increment financing over 15 years. Long-term tax benefits are projected between $25 million and $30 million, the developers told the council.
Approximately 40% of the studio lofts in the residential portion were originally reserved for the University of Iowa’s International Writing Program, the developers said, which recently
lost $1 million in federal funding.
To compensate for the loss of tenants, the developers proposed affordable studio lofts approximately 500 to 600 square feet, “but also possibly, we've talked to The Englert about possibly using some of those units to house some of their visiting artists as well,” Mr. Long said.
Iowa City Mayor Bruce Teague expressed frustration at not having information on the merged projects ahead of time so the council could adequately assess them, and wanted to know more about how the businesses utilizing the building will be contributing toward costs, which varied between the two original plans.
“I’m going to be looking at the financial part of it quite a bit to make sure that we’re exhausting all the opportunities,” he said.
Mr. Berg acknowledged the frustration and pointed out that his initial proposal included a significant amount of affordable housing, which, while beneficial, does not generate as much tax increment, particularly when considering TIF.
"And so even though I was doing a lot of units, I was not generating a lot of increment," Mr. Berg said. "Their (Salida Partners) project was generating more increment, and so we looked at it as a more holistic approach of, how do we generate increment? Leave some of it on the table for the city that, frankly, would have been more than I could have ever created with my project, and yet keep enough on the table for us to make the project viable. So that's a large reason why we combined the efforts.”
Grand Rail Development
Grand Rail Development expressed interest in honoring Iowa City’s original city hall, which once stood on the site, by incorporating brick materials into the design.
The developer also received inspiration from the Downtown and Riverfront Crossings Master Plan, incorporating a step-back so that the corner building would complement adjacent historic structures and maintain the character of downtown Iowa City.
Key aspects of the proposal, which Grand Rail said could be adjusted, included
- An Englert Theatre event venue and a cafe with an outdoor patio, or a cultural museum space with micro retail on the lower level
- ACT offices on level two
- The Stories Project and possibly office space for the city of Iowa City, with access to an outdoor terrace, on levels four through six
- Twenty residential units on upper levels. Each unit would be one to two bedrooms, have its own garden plot and a shared backyard roof. Four to eight of these units would be designated as affordable, developed in collaboration with The Housing Fellowship
Presenter Mike Bails with Urban Acres Real Estate said the development team kept the building concept under thirteen stories to remain financially viable. The total project cost is estimated at $40 million.
“When we went through everything, we kept it at the lower level, because that allowed us not to be subject to external financing incentives,” he said.
Grand Rail proposed $3 million to purchase the lot, “however, I can't tell you definitively today what prices are going to be in two or three years,” Mr. Bails said. “So we have to put a RFP together today for what we're going to bring to market in two or three years. So if I have to use today's pricing, then a $3 million purchase agreement is what we can do. However, as we go through this and as we work with the staff through the process, that purchase price could increase.”
The key question that remains is the project's return on investment, Mr. Bails said, emphasizing that while real estate taxes are one component, a development of this scale – particularly one that includes affordable housing – contributes to the tax base in multiple ways. He added that he thought the proposed development site wasn't the "right spot" for affordable housing and suggested that revenue generated from the project could be allocated elsewhere in the community.
“It just doesn't seem to me that affordable housing should be jammed into downtown. Why not take that money, reinvest it back in the community, work with a viable project that will work on the corner. We can fill it, we can finance it, take that money and use it for other things. I think that's a much, much better use of the funds," he said.
He added that if the city still prioritizes affordable housing in the downtown core, the development team would work within that framework.
“There's different ways that we can make things work to get the city the best return on investment possible,” Mr. Bails said, briefly touching on the possibility of senior housing. Compared to the Salida Partners/Iceberg Development proposal, “as far as the financial viability, we feel our project stands alone when it comes to that,” he said.
Council member Laura Bergus expressed appreciation for a proposal not requiring TIF, and inquired about the proposal's use of sustainable building materials.
Co-presenter Sophie Donta, with OPN Architects, said the development team is targeting LEED Silver certification, incorporating efficient building systems and evaluating the potential for rooftop solar panels.
“These are things that OPN has a lot of experience with, even internally, we've kind of raised our own standards with specifications, looking at decarbonization, looking at low and no VOC (volatile organic compounds) materials,” she said, adding that these elements are built into both the project's design and budget.
Following questions from other council members, Mayor Teague addressed Mr. Bails’ remarks on affordable housing.
“I just have to tell you that in our community, we believe that everybody belongs everywhere, and we should try to figure out how to make it possible for people to live, no matter where it is in the city,” he said.
At the conclusion of the work session, Mayor Teague thanked the two presenters and urged the council to delay making a decision at that time.
Mr. Fruin expressed confidence that city staff could have an analysis of the newly combined proposals by the April 15 council meeting, with the possibility of an earlier April 1 deadline if information is quickly gathered.
“Our next step will be to reach out to the Salida/Iceberg team and just kind of detail everything that we're going to need to revise our report and get that out to you,” he told the council. “As soon as it's ready, we'll put it in the next packet and make sure that you can have a discussion on it.”
For more information on the proposed developments for 21 S. Linn St., visit
the city’s website.
