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.
- Economic Development Policies (updated)
- Understanding gap analysis and TIF
- Key elements to the financial analysis
- Application for TIF financing
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.
Property Tax Relief and Assistance for Business Development
The City of Iowa City has two 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.
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.
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%