A downtown Iowa City building that used to house a large bar could be converted to retail and office space.
And the city is being asked to help make that happen.
Field House Investments has asked the city for $800,728 in tax increment financing for rehabilitation costs as part of a $2.55 million project at 111 E. College St. The building is best known as the former home of the Fieldhouse bar, but it has been vacant since July.
City staffers are recommending $400,000, and the City Council’s Economic Development Committee will discuss the project Nov. 19. The three committee members, who also are City Council members, will make a recommendation to the full council.
Committee member Susan Mims said the concept is what city officials have been trying to encourage downtown. The city wants to de-emphasize the bar scene and bring in more high-end office space, stores and owner-occupied housing.
“We need it,” she said. “There certainly is a demand for it.”
She had not yet seen the details for the project but said past practice would be for the committee not to recommend more financial assistance than what staff proposes.
Brad Houser of Field House Investments said his preference is to convert the building, which has three floors at 6,000 square feet each, to offices and retail. But he said leaving it as a bar is an option and what happens depends on what the Economic Development Committee decides.
While Field House Investments will seek more than what city staff is recommending, the company has agreed not to establish a bar on the property in exchange for a $400,000 grant from the city, according to city officials. That would be important because after being converted to a different use or after not being a bar for a year, it could not become a bar again because of a city law that prevents new drinking establishments from opening within 500 feet of existing ones.
A similar project occurred across from Houser’s building. Developer Marc Moen received $250,000 from the city last year to turn the former Vito’s bar building into retail and office space.
Houser said office and retail users have approached him about the site, but he declined to say who. If things move forward, remodeling would start and finish in 2013 and 2014, he said.
The city estimates the renovation would increase the property’s value from a little more than $1 million to $1.85 million. That would generate about $33,300 more a year in property taxes, according to the city.
Under tax increment financing, the new taxes, or increment, generated by the development go toward financing the project. The city is proposing paying off the $400,000 over 14.9 years, and it says the existing property taxes and a portion of the increment would continue to go to the city, county and schools during that time.
The city said the National Development Council, a New York City-based nonprofit organization that assists cities with community development projects, determined the project showed a need for $500,000 in city assistance.
Steve Long, Iowa City’s community development coordinator, said a developer assumes risk when taking a “sure thing” like a bar and converting it to office space, and city staff feels comfortable the project works with a $400,000 subsidy.