(The Center Square) – Iowa might provide $100 million toward capital investment projects across the state through the Iowa Reinvestment District Program, the Iowa Economic Development Authority announced in a news release last Friday.
Provisional funding for the six reinvestment district program applications relate to proposed projects in Ames, Cedar Rapids, Des Moines, Fort Dodge, Urbandale, and Newton.
Funding would include supporting the development of an ice arena and training facility for the Des Moines Buccaneers hockey team at the former Younkers store site at Merle Hay Mall and a dedicated soccer stadium for the Des Moines Menace at the former Dico factory site. The Merle Hay Mall Reinvestment District received a provisional $26.5 million for its $122 million capital investment proposal while the Des Moines Capital City Reinvestment District, which would also include an entertainment venue and three hotels, received $23.5 million toward a $277 million capital investment.
Ames’ provisional funding of $10 million would benefit an investment of $154 million for redeveloping Lincoln Way, an Indoor Aquatics Center, and a new full-service hotel. The Cedar Rapids project may receive $9 million for a $263 million capital investment in residential living and hotel space, breweries, restaurants, shopping, entertainment venues, and outdoor recreation. A capital investment of $86 million in Fort Dodge for Crossroads Mall, an indoor/outdoor event space, and a hotel would receive $17 million. Newton’s district would include the redevelopment of former Maytag buildings into “new affordable market rate” apartments, a boutique hotel, lobby bar, and ballroom, improvements to the Des Moines Area Community College campus, and revitalizing commercial properties in the city’s Resiliency Zone.
Over the next 20 years, these projects are “expected to generate” $385.3 million, according to the release. The agency’s final decisions depend on the applicants’ fulfilling program requirements by Feb. 25, 2022, the release said.
TEF Iowa Policy Director John Hendrickson told The Center Square that these subsidies are “not necessarily fair” to taxpayers or to small businesses, which may not see benefits, and that “a lot of the economic literature” shows that subsidies are not as successful as they were intended to be.
“Often times, I think, economic development is best served by creating a more fair tax code that lowers rates and is more beneficial to all instead of sort of picking winners and losers, which is what a lot of economic development subsidies do,” Hendrickson said.
While corporate tax rates were lowered effective this year, further decreases would be beneficial, he said. Continual creation of special districts, which shift the property tax burden onto other taxpayers, can also make it harder to provide property tax relief, he said.
“Bipartisan agreement exists among Iowans – and it even surpasses our rural-urban divide in this state – that we need to do something to address property taxes,” he said.
The reinvestment program promotes the development of “transformative” multi-development projects to improve the “quality of life” and provide “unique opportunities” in Urban Renewal Areas in communities in the state, the release said. Up to $100 million in new state hotel/motel and sales tax revenues can be “reinvested” into the approved districts.
Scoring criteria include uniqueness and economic impact, which have the highest weight (25 points), along with project feasibility, capital investment, funding leverage, nonretail focus, readiness for development, geographic diversity, and funding need, which are all equally weighted at 10 points, according to the agency.
The project applications are viewable here.