Coralville arena project gets nearly $10 million from Iowa board

DES MOINES - State officials Friday gave provisional approval to most of Coralville's request for $12 million to help finance a 7,000-seat arena and performance center.

The Iowa Economic Development Authority board approved a $9.5 million investment for Coralville, roughly 80 percent of the city's original request toward the roughly $45 million arena.

'Today was the first and most important step,” Coralville City Administrator Kelly Hayworth said, adding that there remains much work left to do, including design work and identifying the remaining funds needed for the project.

'It's like a puzzle, we need all the pieces to come together,” he said. 'We've got a great team to work on it.”

Funding also was approved to the communities of Davenport, Grinnell, Mason City and Sioux City for proposed projects in each city.

With only about $41.5 million available - made possible through the Iowa Economic Development Authority's state-funded Reinvestment District program, which allows new state hotel/motel and sales taxes to be reinvested within approved districts - and more than $65 million sought, each community received a smaller slice than requested.

'We only have so much money to work with ... We've pondered long and hard about how to split the baby here, so to speak,” board member Larry Den Herder said.

For Coralville, the $9.5 million investment from IEDA requires a final application next spring and the guarantee that the project will open debt-free.

To close the gap in finances, officials will look to grants and roughly $31.3 million in private investments, according to a report on the project.

Coralville has already invested in acquiring the site and have applied for a $1 million brownfield tax credit for the project.

The multipurpose facility where the arena will be housed is planned to be located on Ninth Street in the Iowa River Landing and is part of a larger roughly $185.3 million investment in the area that includes hotels, retail and housing.

Coralville Mayor John Lundell described the arena project as the latest addition to the ever-growing Iowa River Landing.

'It's a huge attraction to community, a venue that will bring cultural events and sporting events that wouldn't have been available before.” Lundell said.

North of Coralville in Cedar Rapids, community officials have raised concerns that the arena might directly compete with the newly renovated U.S. Cellular Center arena.

IEDA board member David Bernstein acknowledged those concerns, but added that the Coralville arena could attract a different clientele by looking toward the University of Iowa with sporting events or SCOPE - Student Commission on Programming Entertainment - productions.

'I think it's obviously an interesting project and it does seem, at least from the concert side of things and other things, that there is a void there,” Bernstein said.

Cedar Rapids Mayor Ron Corbett congratulated Coralville for securing the grant for the arena project, even though it is expected to compete directly with the downtown center and perhaps the city's Ice Arena, both 20 miles from Coralville.

Corbett said Cedar Rapids city leaders told the Iowa Economic Development Authority that the city was 'concerned” about the impact, but he said the state agency 'didn't think that argument was valid.”

Corbett, though, pivoted from the comment and said he couldn't forget that Cedar Rapids secured $15 million in state I-JOBS disaster funds in 2010 to support the renovation of the U.S. Cellular Center arena and the construction of the city's new convention center that is attached to the arena.

'In the end, the state supported our facility with $15 million, and Coralville with $9 million. Both communities won,” Corbett said.

Cedar Rapids City Council member Justin Shields, who remains a principal advocate for the construction of a Cedar Rapids casino, said Friday he was 'disheartened” that one state board now has awarded Coralville more than $9 million for an arena that will compete against Cedar Rapids' facilities while another state board, the Iowa Racing and Gaming Commission, denied a gambling license to a Cedar Rapids casino in April 2014 because of the competition it would bring to the Riverside Casino and Golf Resort south of Coralville and Iowa City.

He said Cedar Rapids has taken two hits based on two state decisions that he said conflict with one another.

'It's pretty disappointing,” Shields said.

He said gambling revenue from Cedar Rapids and Linn County continues to go elsewhere and 'all we get are decisions like this one.”

Sharon Cummins, executive director of Cedar Rapids' entertainment venues for the VenuWorks management company, told state officials at a public hearing in recent weeks that a Coralville arena could harm Cedar Rapids' arena.

In March, Cummins said a new arena of similar size in Coralville just down Interstate 380 from Cedar Rapids' arena would take business away from the Cedar Rapids arena even as the presence of the Cedar Rapids venue likely would limit the potential of a Coralville arena.

'Two arenas in such proximity?” Cummins asked then. 'Most likely, neither one will realize its full potential.”

Other communities receiving funding from the state board:

' Davenport received about $10.7 - $21.8 million was requested - to go toward an outdoor tournament center, wave simulator and hotels.

' Grinnell will receive $6.1 million - $8 million was requested - for a hotel and convention center, plus enhancements to Grinnell College and the downtown area.

' Mason City will receive $7.1 million - $9.8 million was requested - for a multipurpose arena, performing arts pavilion, hotel and downtown parking garage.

' Sioux City will receive roughly $8 million - $13.9 million was requested - for an agriculture and expo learning center, new convention center hotel and downtown lofts.

Funding recipients must submit a final application for review before March 1, 2016 and final funding decisions will be made after the IEDA board receives and evaluates a final application.

While each of the five projects includes a considerable financial gap to complete, Den Herder noted the large amount of private fundraising needed to complete Coralville's project.

'You've got some work to do,” he said to Coralville officials. 'You guys have only begun.”

Lundell said Coralville is up to the challenge.

'We do have our work cut out for us as we have some additional fundraising to do,” he said. 'We came up with this project and it's very feasible, so we'll jump right in probably in the next couple weeks into the planning stage.”

Rick Smith of The Gazette and Mark Carlson of KCRG-TV9 contributed to this report.