Iowa City has chosen a local developer to help transform a key downtown lot.
The city will move forward with North Liberty-based Grand Rail Development’s proposal for 21 S. Linn Street, which was determined during a city council work session on Tuesday, May 6.
The initial Grand Rail proposal included a six-story building with two levels of housing and 20 units total. At a presentation earlier this year, Grand Rail said the design was inspired by the “history of Iowa City,” with a brick base. The 21 S. Linn lot was previously the home of Iowa City City Hall until the 1980s.
The initial development is expected to be valued at about $21.5 million, with about $15.5 million in taxable value.
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Four of the 20 included units would be designated as affordable housing under that proposal, though representatives for their development team have emphasized considerable flexibility to facilitate any number of desired spaces in the property, including additional floors dedicated to offices or housing.
In Grand Rail’s plan, a 6,300 square foot ground floor would be used for “flex entertainment.” That includes additional performance and stage space for the Englert Theatre. Three additional stories of commercial space will be available for other proposed tenants, including The Stories Project, ACT, Inc. and the City of Iowa City. Grand Rail plans to “build to suit” their prospective tenants, meaning the demand will guide the retail and commercial spaces.
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Grand Rail’s initial proposal did not require any city-backed tax increment funding and the group touted that they would be “ready on day one,” once plans are finalized.
The development team is requesting to buy the Linn Street property for $3 million, about $1.5 million less than what the city paid.
A rendering of Grand Rail Development’s proposed future build at 21 S. Linn Street. Grand Rail’s six-story structure would include 20 housing units in total, with four of those considered affordable housing. The smallest of the three proposals would require no city TIF subsidy.
Why did the city decide to move forward with Grand Rail’s proposal?
The council was initially considering two proposals for the future of 21 S. Linn. But, the joint venture submitted by Salida Partners and Iceberg Development was withdrawn ahead of the council’s May 6 work session.
A letter to the city cited three reasons: Ongoing economic uncertainty, changes in the availability of tax credits central to the proposal and general challenges with the mixed-use design, including senior housing.
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“As we have consistently expressed, our team is committed to pursuing projects only when we are confident in their long-term viability and, in this case, a purposeful community benefit,” Iceberg’s Jim Bergman and Salida’s Steve Long wrote. “Given recent changes to the rules of affordable housing and the economics of the marketplace, we are no longer confident that this project is a viable long-term project.”
The withdrawal set up two options for the council. They could proceed with Grand Rail’s proposal or cancel the request for proposals altogether and start again with a new RFP. The council ultimately chose to move forward with Grand Rail’s proposal.
What comes next at 21 S. Linn Street?
There is still plenty of work ahead before the 21 S. Linn Street project breaks ground.
Since the council committed to the Grand Rail proposal, staff will establish an agreement to sell the city-owned 21 S. Linn property to the developers.
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City Manager Geoff Fruin said the agreement will include “all the assurances needed to ensure our RFP goals translate from the proposal stage to the final construction and occupancy phase.”
Ryan Hansen covers local government and crime for the Press-Citizen. He can be reached at rhansen@press-citizen.com or on X, formerly known as Twitter, @ryanhansen01.
This article originally appeared on Iowa City Press-Citizen: Who did Iowa City chose to develop a downtown lot at 21 S. Linn St.?