Economic Development Loans, Forgivable Loans, and Grants
The City of Iowa City has three economic development funds to provide direct financial assistance for economic development activities and business development projects. The amount of funding available for any one project will depend upon the characteristics of that project and the financial need of the project. All projects requesting funding will be evaluated based upon the City of Iowa City Financial Assistance Eligibility Guidelines.
Additional Financial Assistance
MicroLoan Program for Small BusinessApplication for MicroLoan Program
The purpose of the MicroLoan Program is to provide low to moderate income persons with access to affordable loans (up to $5,000) to start or expand a business in Iowa City.
Council Economic Development Fund
This fund is used to provide loans, forgivable loans, and grants to business development projects and programs which diversify and increase the property tax base by encouraging the retention and expansion of existing industry and attracting industries that have growth potential and are compatible with existing industries.
Council Economic Development Capital Fund
This fund assists business development projects that expand the property tax base of Iowa City. Public infrastructure improvement projects (such as street improvements or sewer line extensions) have the highest funding priority. Eligible projects also include site improvements, new building construction, building expansions, and building rehabilitations.
Economic Development CDBG Funds
This fund can be used to provide loans, forgivable loans, and grants to business development projects that benefit low and moderate income persons through the creation and retention of jobs. All projects must meet the federal eligibility guidelines and requirements of the Community Development Block Grant Program.
Property Tax Relief and Assistance for Business Development
The City of Iowa City has three ways of providing property tax assistance for business development projects. The amount of property tax relief or assistance for any one project will depend upon the characteristics of that project and the financial need of the project. All projects requesting commercial/industrial property tax exemption or tax increment financing will be evaluated based upon the City of Iowa City Financial Assistance Eligibility Guidelines.
Partial Industrial Property Tax Exemption
Any projects which add value to real property (building and site improvements) that are classified as either an industrial building, warehousing/distribution center, or research-service facility qualifies for the partial industrial property tax exemption. The exemption is for a period of five years:
Year Percentage of Exemption One 75% Two 60% Three 45% Four 30% Five 15%
Commercial Property Tax Exemption
Commercial projects that add value to real property (building and land) and that are located within the following Urban Revitalization Areas may be eligible for property tax exemption:
- Central Business District Urban Revitalization Area
- Near Southside Commercial Urban Revitalization Area
Qualified commercial/industrial projects, as defined in the urban revitalization plan, are eligible for one of the two following property tax exemption schedules:
- A partial exemption from taxation on the actual value added by the improvements. The exemption is for a period of ten (10) years. The amount of the partial exemption is equal to a percent of the actual value added by the improvements, determined as follows:
First Year 80% Sixth Year 40% Second Year 70% Seventh Year 30% Third Year 60% Eight Year 30% Fourth Year 50% Ninth Year 20% Fifth Year 40% Tenth Year 20%
- A one hundred percent (100%) exemption from taxation on the actual value added by the improvements. The exemption is for a period of three (3) years.
- Tax Increment Financing
Tax increment financing (TIF) is a mechanism used to provide financial assistance for projects within a designated urban renewal area/TIF district. Designated areas presently include:
- Northgate Corporate Park
- Sycamore and First Avenue
- Scott Six Industrial Park
- City-University Project I (Downtown)
- Lower Muscatine Rd. & Hwy. 6
- Industrial Park Road
- Heinz Road
- Hwy. 6 Commercial Urban Renewal Area
- Moss Green Urban Village
The difference between taxes derived from unimproved, underdeveloped, or underutilized property and those derived after its development, redevelopment, or expansion is the "increment" of taxes which may be pledged by the City to help finance project expenses incurred by the City or the developer in furtherance of the development.
The TIF ordinance makes available to the City incremental tax revenues for repayment of project-related expenses or the provision of a property tax rebate. The incremental tax revenues include those levied by and for other taxing jurisdictions, such as the county, school district, and community college.
TIF financing is available in the form of public infrastructure improvements or in the form of forgivable loans or property tax rebates for qualifying businesses. The amount of available tax increment financing is dependent upon the amount of new taxable property value added to a property.
For more information, please contact:
Wendy Ford, Economic Development Coordinator
City of Iowa City
410 E Washington Street
Iowa City IA 52240
(319) 356-5248 phone