Economic Development Loans, Forgivable Loans, and Grants
The City of Iowa City has access to a limited pool of funds to provide direct financial assistance for economic development activities and business development projects. The amount and type 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.
Building Change Program for Downtown and Northside Marketplace upgrades
The City of Iowa City is reintroducing a financial assistance program called “Building Change” to help revitalize buildings in the Downtown and Northside Marketplace areas for continued viability, sustainability, increased tax base and improved aesthetics. There are both grant and loan components to the program.
Good building stock is important to the social, historic, commercial and cultural fabric of the community. To ensure continued investment in this community asset, the Building Change program will help fund the following eligible activities: Façade renovations; Entryway modifications, elevators or other accessibility improvements; Renovations of underutilized space, such as unused upper levels.
The grant program will pay 50% of project costs, up to $50,000 on projects costing a minimum of $50,000. Applications for the competitive grant funding will be accepted until February 15, 2019. Grant awards will be based on project impact, type of improvement, total investment, and other sources of funding available.
The loan program is designed for projects costing a minimum of $10,000 and provides 2% interest loans for 5-year terms for up to 50% of project costs, with a maximum loan of $30,000. The loan program is funded by local lenders Hills Bank & Trust, MidwestOne and UICCU and administered by the City. Applications will be considered on a first come, first served basis.
MicroLoan Program for Small Business
The purpose of the MicroLoan Program is to provide low to moderate income persons with access to affordable loans 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.
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.
Tax Increment Financing
Tax increment financing (TIF) is a mechanism used to provide financial assistance for projects within a designated urban renewal area and TIF district. Iowa City's urban renewal areas.
Click here for a map of the urban renewal areas in Iowa City. Learn more about TIF on our Resources and Documents page.
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.
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 where a portion of the new value in a qualifying is exempted from taxation at the following rate:
Year One 75%; Year Two 60%; Year; Three 45%; Year Four 30%; Year Five 15%