A 212,400-square-foot athletic facility would be the centerpiece of a recreational complex planned in Johnston, west of Merle Hay Road. Architectural rendering provided by city of Johnston

The city of Johnston has joined the growing list of communities vying for the ability to use a portion of state sales and hotel-motel taxes to help pay for projects anticipated to attract visitors, improve infrastructure and improve residents’ quality of life.

The City Council on Tuesday voted to establish a reinvestment district that would include nearly 75 acres roughly between Beaver Creek and Northwest 55th Avenue along both sides of Merle Hay Road, an area envisioned to include recreational developments, hotels, a mix of housing types, restaurants and other commercial nodes.

The first phase of redevelopment in the Merle Hay Road Reinvestment District would include:

• Development of the proposed Ignit Sports and Fitness facility, planned west of Merle Hay Road at Johnston Drive.
• Development of Gateway Park, a proposed city park along Beaver Creek that would have a playground and lighted athletic fields with spectator seating.
• Hotel and commercial development in what’s being called Western Gateway, also located on the west side of Merle Hay Road.
• A kayak launch area along Beaver Creek, east of Merle Hay Road.
• An ecological-themed hotel on the east side of Merle Hay Road where a hotel and the North End Diner had been located.

The proposed redevelopment is estimated to cost more than $123.7 million, according to material provided to the council this week. If fully developed, the reinvestment district could generate more than $55.6 million in new sales and hotel-motel taxes over 20 years, according to the city material.

The city is asking for $4.4 million from the Iowa Reinvestment District Program, which has been in place since 2013. The program allows communities to use new state hotel-motel and sales tax revenue generated by a development to be reinvested in the area in which the development is located.

The state this year is providing up to $100 million in newly generated tax revenue to qualified projects. “Pre-applications” for the program are due next week, according to a state website.

Adam Plagge, Johnston’s economic development manager, told the council that competition is stiff for the money.

“We’re competing against a number of large projects in the metro,” Plagge said. But, he added, “We have a really strong application and we have a consistent track record of working towards that Gateway vision.”

In 2014, Johnston submitted an application but wasn’t selected for the program, Plagge said. Since then, the city has taken steps to make its current application more competitive, he said. For instance, the city has acquired several properties along Merle Hay Road and has begun demolishing dilapidated buildings on the parcels. The city is also working with Ignit Sports and Fitness on development of the 30-acre recreational complex planned west of Merle Hay Road.

The centerpiece for the complex, which was announced last year, is a 212,400-square-foot indoor athletic facility estimated to cost nearly $26 million.

The development, though, has had some setbacks, according to information contained in Johnston’s application. Site design and flood plain mitigation is more complex and costly than anticipated. The added expense has created a $500,000 funding gap. Some of the money generated from the reinvestment district would be used to help pay for additional grading and fill needed in the area. It would also be used to pay for redesigning part of the project, the application said.

If Johnston’s plan is selected as part of the reinvestment program, work on the facility will begin by late 2021, according to the application.

Other projects
The following are among the cities that have indicated plans to submit applications to the Iowa Reinvestment District Program:

• The city of Des Moines, on behalf of a project that includes development of a professional soccer stadium.
• The city of Urbandale, in partnership with Des Moines, on behalf of a project that includes development of a multiuse arena at Merle Hay Mall.
• The city of West Des Moines, which is expected to submit an application on behalf of backers of a plan to redevelopment Valley West Mall.
• Newton, which is submitting an application on behalf of Des Moines Area Community College and Legacy Plaza LLC to develop an entertainment area and pedestrian mall in an area between the town’s downtown and what’s known as Legacy Plaza.

Related article: 2 high-profile projects proposed for metro area will go head-to-head for state tax dollars