Application for Cedar Rapids Iowa District Reinvestment Program.
CEDAR RAPIDS – City officials have said they will continue the “transformational” downtown projects included in a proposal they put forward for financial assistance from a competitive state program, although a state panel on Friday tentatively awarded the city $ 9 million, $ 30.5 million below its target. request.
The Iowa Economic Development Authority’s board of directors has provisionally granted aid to fuel development in the urban core of Cedar Rapids – far less than the $ 39.5 million the city asked the panel to boost growth. downtown economic growth and attract visitors. Six Iowa communities had vied for a $ 100 million share in the district’s competitive reinvestment program after asking the board for a total of $ 151.6 million.
“It will always be very important for us to be able to launch some of these projects,” said Jasmine Almoayyed, director of economic development for the city. “All the projects that we put forward, we also knew that we intended to achieve them in one way or another. This money was going to help us see it come to fruition faster, hopefully. “
The city of Cedar Rapids has requested $ 39.5 million – the highest number of applications – to support 15% of an overall proposal exceeding $ 261 million across six projects, which would generate nearly $ 7 million per year in property taxes.
In April, the IEDA board of directors reduced the initial pool of 10 applicants to six proposals it rated high enough. The other communities that made this first cut and ultimately received bridge funding were Des Moines, Fort Dodge, Newton and Ames and Urbandale, which partnered with Des Moines.
The competitive program reinvests revenue from sales taxes and hotel motels in cities for use in projects that improve quality of life and create or expand recreational opportunities – and ultimately attract more people.
The Cedar Rapids district encompasses First and First West mixed-use development with a Big Grove microbrewery; Marriott hotels on the site of the Guaranty Bank Building and the Old World Theater; a skyscraper near the Paramount Theater; and a plaza on Fourth Avenue SE. It also includes some public projects: a mixed-use pumping station on Eighth Avenue SW and a 5-in-1 dam diversion channel with whitewater rafting and other water recreation.
City manager Jeff Pomeranz said the price, while lower than demand, remains “important” to Cedar Rapids and will be useful for projects in the district.
“At this point, we look forward to these projects actually starting,” Pomeranz said. ” This is the main. “
Cedar Rapids officials have looked at ongoing ‘transformational’ projects with a mix of public and private investment, Almoayyed said, and have particularly leveraged locked-in private support to show sites are ready for development. with engaged users.
Although officials at Cedar Rapids have yet to determine how the $ 9 million in funding would be used, Almoayyed said the award could particularly help kickstart development of Marriott-flagged hotels by developer Heart of America Group as l he hospitality industry is struggling with a return to normal after the disruption caused by the pandemic.
Renderings show proposed renovations to the Guaranty Bank Building, the World Theater and a new nine-story hotel in the 300 block of Third Avenue SE in downtown Cedar Rapids. (Heart of America Group)
When asked to explain the recommendation of IEDA staff for the Cedar Rapids award, IEDA director Debi Durham said that with all of these proposals, the authority recognizes the presumptions that communities must do in their financial projections and that the pro formas are false.
“I mean, that’s how they work,” Durham said. “It’s a 20-year program. Look at what we went through last year – who could have predicted that? We would never attribute 100 percent of what should be generated to anything, whatever. There should also be a return on investment for taxpayers in this 20 year process. “
Cedar Rapids had made the largest possible request, which represented 100% of the $ 39.5 million city officials expected from the district in terms of hotel-motel revenues and sales taxes over a 20-year period.
Officials said they wanted to make sure communities and their taxpayers didn’t find themselves forced to repay part of a price if revenues did not meet the cities’ initial forecast.
Cedar Rapids’ price was about 25 percent of its projected revenue from the projects, Durham said, according to Des Moines and the Merle Hay joint project that Urbandale and Des Moines have partnered on. For these two projects, the board has provisionally allocated half of the money – $ 50 million – available under the Reinvestment District program.
It was a “bold goal” for Cedar Rapids to try to recoup the full share of hotel motel revenues and sales taxes, Almoayyed said, but the $ 9 million is still a good amount.
Additionally, she noted that the city has yet to go through the full application process, where further changes can be made. Cities have until February 2022 to submit their final applications.
“You will always be disappointed when you shoot for the stars and you don’t get it, but we fully understand where the state is coming from,” Almoayyed said.
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