Iowa City Council to consider new proposal for downtown lot

IOWA CITY — The Iowa City Council will begin deliberations next month on development proposals for a vacant downtown lot the city bought for $4.5 million in 2023 after a student housing project fell through.

The city bought the property, which used to be the site of a U.S. Bank drive-through, so the council could take a lead role in influencing downtown development.

Initially there were three development proposals for the property at 21 S. Linn St., but two of the teams, Salida Partners and Iceberg Development, now are working together on a proposal for a 12-story mass timber structure with large glass panels. The other developer, Grand Rail Development, proposes a six- to eight-story building with steel and a brick facade.

Both proposals include a 200 to 300-person capacity entertainment venue on the ground floor to be managed by the nearby Englert Theatre, as well as space for a “Stories Project” museum — a concept for an interactive museum that celebrates storytelling — as well as a mix of affordable and market rate housing and office space.

Last year, the city conducted public input sessions and surveyed the community to gather public opinion on what should be done with the lot. The results of more than 6,000 responses from about 1,800 respondents showed residents most wanted to see the property used for green space, affordable housing, market-like retail spaces or mixed-use development.

Based on those responses, the city issued a request for proposals for the property.

Salida Partners and Iceberg Development join forces

The combined development team’s new proposal, estimated at $41.7 million, contains elements of each of the original projects.

The first floor would include an entertainment venue managed by the Englert and a number of micro-retail spaces, each about 500 square feet.

The second floor would include part of the “Stories Project” Museum and a coworking space with a bar and cafe. The third floor would be used exclusively for the “Stories Project.”

The fourth floor is for office space for ACT, which the college and career readiness service says it’s interested in, while the fifth would include 16 studio lofts possibly for use by the Iowa International Writers’ Program and the Englert’s touring acts.

Floors six through eight would provide 33 units of affordable housing for people over 55 who earn less than 60 percent of the area median income. The developers said they intend to use low-income housing tax credits from the state, guarantee a minimum 30-year, low-income affordability period.

Floor nine would provide 12 single-bedroom units of non-age restricted affordable housing. All affordable units would be managed by the Housing Fellowship, a nonprofit housing management organization that provides affordable rentals in Johnson County.

The remaining three floors would be a mix of market-rate housing, with one floor exclusively for people over 55.

The developers are proposing a $2 million land purchase and tax increment financing help over a 15-year period. To be eligible for TIF incentives from Iowa City, the project would have to meet LEED Silver standards, a rating that measures energy efficiency.

However, city staff previously has expressed concerns over the use of low-income tax credits as construction could be delayed. The development team would not be able to apply for the Iowa Finance Authority’s competitive tax credit program until the 2026 round of funding, since the 2025 deadline has passed. There also is no guarantee the credit would be awarded.

Members of each development team had experience working together and decided to combine efforts after last month’s City Council work session, where three proposals were reviewed. Iceberg’s first proposal predominantly was made up of low-income senior housing, while Salida Partners’ focused on flexible community spaces, such as an art gallery and kitchen space.

“We feel it’s best for the community to merge the community benefit and affordable housing benefit. We have a strong partnership and we merged the two architectural teams,” Steve Long of Salida Partners said at a City Council work session Tuesday.

Grand Rail Development emphasizes plan flexibility

Grand Rail Development’s proposal, which developers say could cost about $40 million, calls for a six-floor building with a brick facade to match the surrounding architecture and pay homage to Iowa City Hall, which was once located at the lot.

However, the development team has said it is open to adding two floors and open to changing the layout and uses within the building.

“If there's a priority to make the building more residential … we can look at options that have more residential in proportion to commercial. If there's one kind of takeaway from our team that we want you guys to have is that we're flexible and we're adaptable. We're willing to work with you to design the best building for Iowa City,” Sophie Donta of OPN Architects said at a City Council work session Tuesday.

Under the six-story proposal, the first floor would provide 6,300 square feet of entertainment space, managed by the Englert, though the development team also is open to dividing the space among potential restaurant or retail options.

The team also is open to including the “Stories Project” museum in the building.

Two upper floors would offer 20 residential units — 16 at market rent and four reserved for affordable housing. The Housing Fellowship has submitted a letter indicating it is interested in owning and managing the units.

The development team has said any additional residential floors also would include two units for affordable housing.

The remaining three floors would be reserved for market-rate office space. OPN Architects and ACT have expressed interest in the space. The development team also is willing to work with the city on acquiring office space for its own operations.

The development team has proposed a $3 million land purchase price, and its proposal does not include a request for tax increment financing incentives. The development team, though, has indicated it would still strive to reach LEED Silver standards.

Next steps

Due to the late decision by Salida Partners and Iceberg Development to combine efforts, city staff has not had a chance to provide a detailed assessment about the financial viability and other feedback on the project in the same manner that staff did for the initial proposals.

Once city staff completes its assessment, it will be made public on the city website. The City Council then will begin discussing a preferred option as soon as April 1.

Comments: megan.woolard@thegazette.com

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