Newton and Jasper County form agreement to kickstart funding mechanism for Legacy Plaza development

Both the City of Newton and Jasper County approved a joint agreement this past week that would establish an urban renewal area for the Legacy Plaza project.

The Newton City Council approved the joint agreement on Feb. 6 with very little discussion and no resistance from elected officials. The next morning the Jasper County Board of Supervisors approved their side of the agreement. According to city documents, the collaboration between the two is needed for the project.

“Jasper County has agreed to assist with the financing of the private developer projects identified in that preliminary Iowa Reinvestment District application. In order to facilitate the County’s participation in the development, establishment of a Jasper County Urban Renewal Area is necessary,” the documents state.

Although the urban renewal area would be located inside the city limits, it is Jasper County that would become the applicant — in place of the City of Newton — for the final Iowa Reinvestment District application. Jasper County will submit the final application to the Iowa Economic Development Authority.

In 2021, the IEDA accepted the city’s application to establish a reinvestment district, which funnel $14 million in state funding to a number of projects — in the form of future sales tax and hotel/motel tax revenues generated within the district’s boundaries — over a 20-year period.

The funding would go towards projects in the downtown district, Legacy Plaza and the adjacent DMACC Newton Campus.

Jake Christensen, president of the Des Moines-based Christen Development, is the lead development for the project at Legacy Plaza. The $30 million renovation of Maytag Buildings 1, 2 and 16 of Legacy Plaza would create a 30-room, high-end hotel with a bar or restaurant and a 90-unit market-rate apartment building.

Prior to council’s 6-0 vote to approve the city’s portion of the agreement, Christensen said “this is a big moment” for the project and the community; especially when it comes to preserving the historical buildings left behind by Maytag and preserving the history of downtown Newton.

“I appreciate all of the work from this body to help further this effort,” he said. “It’s a pretty exciting time and I think a generational moment.”

JEDCO Executive Director Jeff Davidson told the county board of supervisors the creation of an urban renewal area is required in order to finance the project. The joint agreement makes sure all the affected parties are on the same page in terms of how they are proceeding with the project.

From the start, Davidson said it has been a complex project that required the cooperation of almost every county department. And he is thankful for everyone involved. The county’s bond council, Ahlers & Cooney, have reviewed the project and the urban renewal area extensively.

Following the approval of the joint agreement, the board of supervisors held a public hearing for the urban renewal plan and discussed the first reading to establish a tax increment financing ordinance. After passing the first reading, the supervisors waived the second and third readings and adopted the ordinance.

“This was originally put in place by the City of Newton working with the developer,” Davidson said. “That’s where it was initially worked out and when it was agreed we would become the applicant for the Iowa Reinvestment District funds, that was then changed to the county.”

Which now makes the county the lead on the project.

For the first 10 years there will be tax rebates made to the developer for the financing of the fit out of the hotel, up to $2.6 million. Davidson said it might not even take 10 years to pay off that amount if the assessed valuation is high enough. If it does, that portion of the TIF would come off, Davidson said.

If the proceeds from the reinvestment district — which is in a 75-acre area — is not adequate for the county’s bond repayment for the remaining 10 years, Davidson said the county’s financial analyst recommended the county put in mechanisms to protect itself and reduce possible risks.

The county will be selling $9 million in bonds to the developer, to be repaid through the Iowa Reinvestment District.

Legacy Plaza is made up of a number of old Maytag headquarters buildings, some of which have already been filled by businesses. The buildings themselves are owned by DMACC, which wants to create a mixed use community of housing, retail shops and businesses in the renovated spaces.

Additional action will be needed by the city council on the development agreement between the city, developer and Jasper County at a future date.