Supervisors to continue Legacy Plaza project discussions

Although Jasper County wants to figure out the finer details of a large-scale redevelopment project at Legacy Plaza before creating an agreement with all respective parties, the board of supervisors on Sept. 27 were overall pleased with the idea and believe it fills a need and will drive further development.

The board voted 2-0 to authorize JEDCO Executive Director Jeff Davidson and supervisor Brandon Talsma to continue discussions with all parties in the Legacy Plaza redevelopment project. Talsma abstained. Before the supervisors cast their votes, they were treated to a presentation about the project.

Jake Christensen, president of the Des Moines-based Christensen Development, is the lead developer for the project, a $30 million renovation of the historic Maytag Buildings 1, 2 and 16 of Legacy Plaza. The buildings will be transformed into 90-unit market-rate apartments and a 30-room, high-end hotel.

“Then a bar/restaurant would go into the space formerly occupied by the Peanut Pub,” Christensen said during the presentation. “Our goals for the project … are to create something new for Jasper County. Currently, our goal is to be in the top three in apartments and No. 1 hotel in the region.”

Funding for the project is bolstered by the establishment of a reinvestment district in Newton, which will provide $14 million in state funds over 20 years.

“The reinvestment district does not hand us a grant for $14 million,” Davidson said to supervisors about the state funding mechanism. “What it enables is a revenue stream to be created from new sales and hotel/motel taxes that can provide, eventually over time, up to $14 million for investment in the project.”

While there is an upfront risk involved in monetizing that $14 million, the county would be repaid over time from the new sales taxes and hotel/motel taxes. In supervisors’ deliberation of the Legacy Plaza project, Davidson said it requires a belief in the local economy being capable of creating that revenue stream.

“We believe that is the case, or we wouldn’t be bringing it to you,” Davidson said.

Whenever Davidson brings a project to the board of supervisors, he always tries to ask himself: Does it build a tax base to provide municipal services? Does it create jobs to build the community? Davidson said the development project answers yes to both of those questions.

“And I think it does them on a scale that is significant for the community and will be a game changer for Jasper County,” Davidson said, noting what is also significant is the taxable value increase that comes from the project, especially when considering the buildings are not on the tax rolls now.

When the project is fully developed, it is estimated to accumulate between $200,000 to $275,000 in taxes depending on assessments. About 55 people will be on the job site for the bulk of the construction period. But the permanent jobs created by the project is estimated to be between 15 to 20.

“The increase in taxable value and job creation is significant. Getting the jobs back on the tax rolls is something that’s clearly a priority for the owner and I think benefits us in the community,” Davidson said. “The preservation of the historic Maytag legacy buildings … they’re at a good point right now.”

Even when a building sustained heavy damage from the 2020 derecho, DMACC wasted no time in restoring it back to health. Years down the road if the buildings are left to decay, they won’t be in such good shape, Davidson said. The way to preserve historic buildings, he added, is to make them economically viable.

“These buildings will be cared for and maintained well because they will be economically viable under what is being proposed,” Davidson said. “This project also moves Newton forward and moves Jasper County forward with facilities. The project will establish things not currently existing in the community.”

Christensen firmly believes the hotel rooms will bring guests to town that would normally stay somehwere else. It would add to the tourism industry and other amenities in Jasper County, he said. From a housing standpoint, Christensen said his development group would create unique housing, attract people who are interested in moving to Jasper County and retain young people.

The bar/restaurant would also amplify the courtyard of Legacy Plaza, which Christensen noted has already seen success and describes it as a unique destination.

But the developer wants Jasper County’s help, which Davidson said would require some type of a bond sale. Luckily, the revenue stream in the reinvestment district would pay off those bonds.

Jon Burmeister, managing director of Public Financial Management and municipal advisor for Jasper County, said the county does have the authority to sell general obligation bonds for the project. This would be secured by the county’s “very strong” credit rating. Burmeister said he had a bond structured for June 2023, aligning with construction season.

“I would propose the county take some bond proceeds and set that aside to cover your fiscal year 2024 interest expense payment ... That would then set the county through June 2024 with no payments to be made,” Burmeister said. “We’d want to coordinate with the city ... The state has set the base in February 2022, and they wanted to trigger the timing of this to be April 2024.”

By the time the county has to start making debt payments, there will be two years worth of growth in the increment stream, Burmeister added. Altogether, Burmeister suggested the county’s finances are strong, and its involvement with the redevelopment would be a sound move.

“But it’s important, as Jeff indicated, this is a projection,” Burmeister said. “It’s based on the project being completed. It’s based on the economic vitality of downtown in the city of Newton. But I think this financing, at least in my personal opinion, puts the county in the best possible position to reduce the risk to the county and get this project financed.”

Supervisor Doug Cupples liked that the county has income coming in rather than the county paying upfront costs. It is a lot of money, but in the same respect he thinks it “could do a lot of good for the county.” Davidson said to the supervisors’ credit, the county’s financial position is what allows them to do this.

Iowa House Rep. Jon Dunwell, R-Newton, commended the supervisors for making an “important leadership step.” From the conversations he has had with other lawmakers, they are excited about Jasper County, citing the governor’s support for the IndyCar race weekends at Iowa Speedway.

“It’s an important message for other things that maybe come to Jasper County as well because of your potential leadership on this issue,” Dunwell said.

Contact Christopher Braunschweig at 641-792-3121 ext 560 or at cbraunschweig@newtondailynews.com