August 28, 2025

City Council endorses Reinvestment District plan near speedway

By Bob Eschliman

Developers have proposed the Raceway Ridge Reinvestment District, the area highlighted in yellow, to state economic development officials. If approved, it would become home to a nearly $50 million retail and hotel development. Premier Development, which owns the property, hopes the reinvestment district — a relatively new economic development option in Iowa — will help spur additional development in the area near Iowa Speedway. (Submitted Image)

At Monday night's meeting, the Newton City Council unanimously endorsed an application to the state to create a Reinvestment District that could lead to hundreds of new jobs and millions of dollars in new investment for the community.

Troy Strawhecker of Premier Development in Urbandale, which owns 25 acres of land immediately north of Iowa Speedway, between Rusty Wallace Drive and Interstate Highway 80, made a brief presentation to the council. He also supplied a copy of his proposal for Raceway Ridge Reinvestment District.

Last year, the Iowa General Assembly allowed for the creation of reinvestment districts, which would use up to four cents of the Iowa Sales Tax and all five cents of the Hotel-Motel Tax generated within them to finance capital investment over a 20-year period. This type of sales tax-increment financing was used to develop the area adjacent to Kansas Speedway.

Strawhecker said Premier is proposing to develop an 80-room limited service hotel within the district, as well as more than 260,000 square feet of retail space. The retail footprint would include two "big box retailers" as well as more than 100,000 square feet of supporting retail.

"I can't tell you specifically what retailers we're talking about, but I can tell you it's destination retail of a type that isn't duplicated within a 75-mile radius," he told councilors Monday night. "This is all contingent on state approval of a reinvestment district."

The Iowa Economic Development Authority will make a determination on reinvestment district applications in June. Pre-applications may be submitted only between March 1 and 15 of each year; to be considered for establishment, the city must play a role in the reinvestment district.

"In order to meet the state requirements for consideration of the establishment of a reinvestment district, the city must endorse a pre-application and be considered the applicant for the designation of a district," City Administrator Bob Knabel told councilors in their meeting packets. "There is not a financial obligation of the city as part of the proposed endorsement."

He also told councilors Premier Development has a "great deal of experience ... mostly in the Des Moines and Cedar Rapids area." The developer has already performed feasibility studies for the proposed reinvestment district.

Strawhecker supplied the council with a summary of the results of those studies, which indicated the project could not only be viable, but successful. If the reinvestment district is approved, construction on the project could begin as early as next spring.

The first phase of construction would be Phase I of the retail center, which is expected to be completed in the fall of 2015. By the time Phase II of that project is completed in the fall of 2016, the 260,000 square foot facility will have a construction price of more than $34 million.

Once fully occupied — estimated to occur in the 2016-17 fiscal year — the retail center is projected to generate $34.4 million in retail sales each year. It will add just shy of $1 million a year in property tax revenue immediately.

Construction on the hotel would be slated to begin in the fall of 2015, with completion anticipated the following spring. The total cost of construction is expected to be $4.8 million, which should result in about $148,000 in additional annual property tax revenue immediately.

The project will result in about 300 construction-related jobs for the area. However, it will add more than 1,000 permanent retail and retail management-level jobs. Strawhecker said the project would anchor Iowa Speedway with supporting retail and lodging, "providing a launching pad for other development in the area."

"Protecting the investment Newton and the State of Iowa have made at the speedway is important to our group," he told councilors. "Jimmy Small, President of Iowa Speedway, and the new ownership team are supportive of our proposal and energized by other people taking risk and enhancing the customer/fan experience."

Strawhecker said this would assist Iowa Speedway as it attempts to attract non-racing events, such as concerts, music festivals and other gatherings. But, he added, having the racetrack alone is not enough to attract people from out-of-state to spend their tourism dollars.

He said the feasibility studies suggest the Raceway Ridge Reinvestment District will have an immediate impact of more than 206,000 additional visitors annually. They show that number increasing to about 313,000 after about three years.

"With the proposed endorsement of the reinvestment district pre-application, it is also proposed to designate Premier Development as a partner of the city in the pursuit of retail prospects," Knabel told councilors in their meeting packets. "The city would ensure that recruitment of companies, especially those identified by the Buxton reports, is coordinated so that efforts are not duplicated or disjointed. Through efficient organization of the recruitment efforts, it is hoped that it will result in the best success for the community."