Iowa City Council considers proposals for 21 S. Linn St.

The Iowa City Council considered three proposals for the development of a key downtown property at its meeting Tuesday evening. The lot at 21 S. Linn St. has been vacant since 2021, when Chicago-based developer CA Ventures demolished the existing U.S. Bank building shortly after purchasing the property. Iowa City bought the lot in 2023 for $4.5 million when the developer’s plans for student high-rise housing fell through, with the intent to facilitate a contextual mixed-use redevelopment through a public-private partnership. In September after polling city residents about how they’d like to see the lot developed, the city sent out a Request for Proposal (RFP) with the criteria that redevelopments align with the long-term interests of the downtown area and the broader community, as well as generate annual property tax income that the city can reinvest in critical public services.

“Over the last 15 to 20 years, the city's invested quite a bit in the downtown, and not just infrastructure which we have and the public spaces, which we're really proud of, but we've been really intentionally trying to diversify the uses downtown,” City Manager Geoff Fruin told the council. “That means introducing new housing types, that means increasing hotel rooms, really trying to shift to a stronger balance of commercial uses and not just kind of the late night bar uses, and really provide a downtown in which everybody feels like they're welcome, invited and have a place.” City officials emphasized the need for high-quality construction, affordable housing units, strong climate leadership, economic sustainability, long-term fiscal benefits for the city, and a street-level floor in the building that would be both “active and engaging” for the public. “That was one of our major concerns with the student-centric housing high rise,” Mr. Fruin said. “If you didn't live in that high rise, you weren't really going to be engaging (with) that building on that prominent corner at all.”

Three proposals narrowed down

Grand Rail Development, a North Liberty-based construction and land development company operating under Venture One LLC in conjunction with Urban Acres Real Estate, OPN Architects and Axiom Consultants, submitted a proposal for a six-story building with 6,300 square feet of entertainment space on the ground floor, 16 market-rate and four affordable apartments with three upper floors dedicated to commercial space.

Six letters of Intent (LOI) were attached to the proposal, representing The Englert Theatre, The Stories Project, ACT, OPN Architects, the Housing Fellowship and the University of Iowa International Writing Program. Grand Rail has proposed $3 million – with no requested subsidies – to purchase the lot. The city has estimated the project to be $21.5 million. Iceberg Development is the lead developer of the second RFP. Operating under Sole Purpose LLC in conjunction with Hodge Construction, Slingshot, CBRE, IMEG Corp. and McClure Engineering, the group is proposing a 13-story building with 2,000 square feet of micro-retail and 3,800 square feet of restaurant, retail or entertainment on the ground floor.

Five upper floors are dedicated to commercial space, and the group is eyeing 76 affordable senior units for seven floors of the building. ACT and The Englert Theatre submitted LOIs for this development as well, which the city has valued at $24 million. Iceberg has proposed a purchasing agreement of $2 million for the lot, with $7 to $10 million in TIF subsidies over an eight to 12 year time span contingent on obtaining a Low-Income Housing Tax Credit (LIHTC) award. If awarded LIHTC funding, the project's valuation will decrease during the compliance period, Mr. Fruin noted, as these properties are taxed differently. However, because it falls under commercial tax classification, the taxable valuation remains slightly higher than if it were solely residential. Salida Partners, led by Steve Long, rounded out the last of the proposals the council considered that evening. Working in conjunction with Matthew Hektoen of Simmons Perine Moyer Bergman PLC, Mark Seabold with Shive-Hattery, Simeon Talley with Community Development Strategies and John Taiber and Paul Zaharia with Skydeck Capital, Salida Partners envisions a 10-story building that would prominently feature The Stories Project.

The ground floor would include 6,900 square feet of flexible entertainment space, a kitchen, 1,500 square feet of micro-retail, and an art alley. The first floor – envisioned as a "community living room" the developer dubbed "Billy’s" – would serve as a gathering space and include a partnership with The Englert Theatre. It would also function as the primary entrance for the upper-level Stories Project, which would span 9,000 square feet with room for future expansion. The development would feature 26 market-rate apartments, six affordable units, and 14 short-term stay units, in addition to commercial space spanning four of the upper floors. The Housing Fellowship and the UI International Writing Program submitted LOIs for the residential portion of the building.

The financial framework includes a $1 land purchase through a no-cost land transfer, along with a $12 to $16 million TIF subsidy over 15 to 20 years. Calling the Salida Partners proposal “impressive” and noting their attention to detail, Mr. Fruin nonetheless pointed out that the project would not create a substantial return on investment for the city in the long run. “At the end of the day, we really did not feel that they presented a financially viable proposal,” he said. “And we were pretty clear in the RFP that we really wanted to try to produce a property tax-generating building that was going to be fiscally supporting of the city, and with the inability to pay for any of the land or recoup any of our land cost, and a full encumbrance of TIF, with a remaining gap that would have to be plugged in some way, shape or form, we really felt that it fell short of that objective, as inspiring as it is.” Mr. Fruin recommended that the council move forward with public presentations from Grand Rail and Iceberg Development. Mayor Bruce Teague suggested the developers be given the opportunity to adjust their proposals based on city recommendations, so all three have a chance to present their concepts to the city. “I think it would only be fair that all three have that same opportunity, if there's potential for change,” he said. “This is a very public process, and so I like the idea of having them all do that presentation, just to potentially spark something more collaborative that could come,” Council Member Laura Bergus said. The council is eyeing either Feb. 8 or March 11 to hear the teams' presentations during a work session. To see detailed overviews of the three proposals, visit here.