At their bimonthly meeting this past Tuesday, the Iowa City Council voted 6-1 to allocate $1.75 million in Tax Increment Financing (TIF) funds for two commercial tenants to open up anchor stores in the Iowa City Marketplace (formerly known as the Sycamore Mall).
The mall’s owners, Sycamore Town Center LLC, will spend approximately $4.4 million — $1.75 million of which will come from the TIF — to complete renovations that will allow Planet Fitness and Lucky’s Market to move into the Marketplace by 2017. Funds will also be used to make “parking lot and pedestrian accessibility improvements to the mall property,” according to the City Council report.
City officials praised the decision, according to the Gazette, with City Manager Tom Markus saying, “We think this is worth the effort and we’re counting on the developer to make this a success.” Markus’ sentiments were echoed by Mayor Pro-Term Susan Mims, who argued, “This is a critically important economic, retail area in the city, and with Von Maur leaving, we still need to take care of the area.”
The lone dissenting city councilor, Jim Throgmorton, voiced doubts about the need for two national chains to receive TIF funds for the project.
“I’m not yet persuaded that the owners of the town center need financial support from the city to take actions in that area already in their own economic self-interest,” Throgmorton told the press.
Local attorney and former city council candidate Rockne Cole, a frequent critic of the city’s TIF policy, pointed out the irony in the city using TIF funds to bring retailers into a space that had been vacated when Von Maur moved its store to Coralville — the result of a generous TIF offer by their city council in 2013.
“In 2011, Iowa City rightfully cried foul when Coralville used TIF to lure Von Maur away from Iowa City,” said Cole. “This is worse. The City is using TIF to lure an out-of-state grocery to take market share from two grocery stores with deep community ties, and a proven record of service to the community: Hy-Vee and the New Pioneer Co-op.”
Cole offered his own alternative to the city’s current policy towards the Marketplace.
“A much larger TIF might make sense for a complete redesign of the Sycamore area, such as a mixed-use concept involving residential, office and retail,” he said, “but doubling down on a mall suffering from poor retail and urban design will not serve the area, or our city’s long-term interest.”
TIFs, whereby the city takes the surcharge on a designated “TIF district’s” property tax revenue and uses it to fund development projects, have been a major source of controversy in Iowa City over the past few years, with the Marketplace just the latest in a long series of contentious ventures undertaken by the City Council. Ventures that include the Chauncey, the Plaza Towers and Park@201.
The next battle in the TIF wars seems to be looming on the horizon with the Council voting at some time in December on which development proposal to approve for the Court and Linn Street site, one of which asks for $8 million in TIF money.