Multi-Million Dollar Property Tax Rebate Revives CU Headquarters Deal
NORTH LIBERTY, Iowa – The city council voted Tuesday for a multi-million dollar package of property tax rebates for University of Iowa Community CU and the contractor for its proposed new headquarters as part of an effort to bring the troubled office project back to life.
The new deal will supersede a $1 purchase of the 20 acres agreed to earlier that is being challenged in court and puts the project back on track, according to credit union officials. “It’s basically the same deal,” Jim Kelly, senior vice president for marketing at the $1.1 billion institution, told Credit Union Journal yesterday.
Under the new deal, the 64 acres at the site will be purchased by A&M Development, formed recently by a local contractor that will build the credit union project. A&M will deed the 20 acres to the credit union, borrowing the $11 million purchase price from the credit union, currently based in nearby Iowa City.
To facilitate the project, the city has agreed to provide up to $5.4 million in tax rebates on the credit union property over the next eight years, and $5 million of tax rebates to the developer.
The controversial economic development project has drawn criticism from a local organization called Concerned Taxpayers for North Liberty and other residents who obtained a court injunction to stop the deal from going forward. City officials believe the new deal will satisfy the legal concerns, which still are being reviewed by a state court.
The credit union’s Kelly emphasized the economic benefits the 100,000-square-foot project will provide the city, including as many as 400 jobs and future property tax revenues, as well as an anchor for additional development at the site. “We really look at it as a positive for the city,” said Kelly.
Groundbreaking on the project is slated for later this year, with occupancy in 2013, according to Kelly.