Development agreement approved for Legacy Plaza

The redevelopment of Legacy Plaza has taken a huge step forward. Last week the City of Newton, Jasper County and Christensen Development formed a three-way development agreement that was subsequently approved by the city council and the county board of supervisors on Feb. 20 and 21, respectively.

Newton City Council unanimously approved the private development agreement, which will go toward the $30 million renovation of Maytag Buildings 1, 2, 16 and 50 of the Legacy Plaza campus. The project includes a 58-room, high-end hotel and bar and a 72-unit market-rate apartment building.

According to city documents, the agreement can be made thanks to Jasper County agreeing to assist with the financing of the project through the Iowa Reinvestment District Act, which will provide $14 million in hotel-motel tax rebates over a 20-year period to a number of projects in the district.

As part of the development agreement, the City of Newton has agreed to provide a $50,000 local housing grant match and pass through $600,000 awarded by a state downtown housing grant. The city will also rebate the local hotel-motel tax generated by the project, which was agreed to in past resolutions.

The agreement also articulates an intent to provide a local-hotel motel rebate grant over a 10-year period of the hotel-motel tax generated by the project, which is not to exceed $200,000. The city also removes the property from the North Central Urban Renewal Area/TIF.

From now on, Jasper County will serve as the applicant and submit the final Iowa Reinvestment District application to the Iowa Economic Development Authority. Jasper County will issue bonds and provide the developer with a construction grant; the bonds will be repaid with proceeds from the reinvestment district funds.

Jasper County is to establish an urban renewal area/TIF district over the property and provide 100 percent tax rebate for 10 years or until $2.6 million has been collected. After the tax rebates have been paid to the developer, Jasper County will reimburse the city $65,000 for the $50,000 housing grant and legal fees.

Upon the completion of the requirements found in the agreement — and barring any shortfall of reinvestment district funds — the county will close out its urban renewal area. Per the development agreement, Christen Development has agreed to a $7 million minimum assessment.

“This is great,” said council member Vicki Wade.

“I’m excited about it,” added council member Mark Hallam.

“This is a long time coming,” said council member Evelyn George. “So many hours and hours of work of staff and lots of people on all three. Many parties that have worked on this.”

The development agreement arrives after Jasper County approved a number of paperwork items over the past few weeks and established its urban renewal area. Jeff Davidson, executive director of JEDCO, provided the board of supervisors with the second-to-last task.

The remaining task is the formal transfer of the reinvestment district plan or application from the City of Newton to Jasper County, Davidson said. He and board chair Brandon Talsma will attend the Iowa Economic Development Authority Board meeting in March to have that transfer considered.

“We think everything is in order for that. DMACC’s been doing a great job of revising the application to reflect the county. Of course you’re aware the motivation for that is so there is an unencumbered conduit of the reinvestment district for our bond repayments that we’ll be providing,” Davidson said.

Confusion about the assessed valuation of the project was addressed by Davidson at the supervisors meeting. It is estimated the project will be assessed between $7 million to $10 million. The valuation and the property taxes paid on that property will be determined by the county assessor, like any other building.

“The minimum assessment ensures that should the assessed valuation drop below $7 million, taxes will continue to be paid on at least $7 million. But if the valuation is higher the taxes get paid on the higher amount. And they will be rebated,” Davidson said.

If the valuation is higher for the project, it could get the TIF rebates off the books sooner than the 10-year obligation.

Supervisor Doug Cupples said, “I’m excited.”

Kim Didier, executive director of DMACC Business Resources, thanked the board of supervisors for stepping up and taking a leadership role in financing the development. It is going to be a transformational project for the entire county, she said, and it will build momentum as the final pieces are put in place.

“I know (the developer) is really anxious to try to get it going before October,” Didier said. “We’re getting more and more pieces in place so I’m confident he’ll be able to do that.”

Talsma added, “I’m looking for to it. I think it definitely fills a need here in Jasper County when it comes to that sort of housing. Really the whole idea and concept behind it is unique.”