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Johnston, West Des Moines will pass, for now, on state development program

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The cities of Johnston and West Des Moines will not refile applications this year for approval of special development districts under a state program that is in its second year and could fill the financing gap that has hindered efforts to locate a convention center hotel in Des Moines.

 

Under the Iowa Reinvestment Act program that is administered by the Iowa Economic Development Authority, communities have until March 15 to file plans for districts of no more than 25 contiguous acres that could receive final approval for partial rebates of sales and hotel/motel tax revenues generated in the districts. IEDA can award up to $100 million.

 

The agency gave preliminary approval last year to the Iowa Convention and Entertainment Reinvestment District, a nearly 24-acre area that runs from Center Street south to Court Avenue along Fifth Avenue.

 

The district includes the site at Fifth and Park Street where a 330-room convention center hotel is planned. The application for final approval had to be filed by March 1.

 

In its application Feb. 27 for final approval of the district, the city of Des Moines is asking for $39 million from the program under a funding mechanism that includes bank loans, the $4 million buydown of loans by a group of Greater Des Moines businesses and business leaders, a $20 million loan guarantee funded by gaming revenues and a $20 million investment under a program that grants permanent work visas and green cards to foreign nationals.

 

The hotel would be owned by the nonprofit Iowa Events Center Corp.

 

Last year, during the first round of applications, Johnston and West Des Moines also submitted proposals for their own Reinvestment Districts.

 

Johnston requested nearly $5.3 million in the tax rebates to help fund about $24 million in improvements in the Merle Hay Road Gateway. In a meeting Monday, city leaders decided not reapply for the funds, said spokeswoman Emily Price.

 

“City staff has been working on the Merle Hay Road Gateway Area in order to open up more land for developers to invest and build,” Price said in an email. “Major pieces of land … are not quite ready for that yet – but we continue to work every day on it. Because those pieces of the puzzle aren’t together yet the council and staff have chosen not to reapply.”

 

The issue of land use also played in West Des Moines’ decision not to file another application for the We Compete SportsPlex at Pavilion Park, said Naomi Hamlett of the city’s Community and Economic Development Department.

 

West Des Moines had requested $11.4 million in rebates for the $38 million project, which would have been located in the Pavillion Park development area near an interchange that will link West Des Moines and Waukee on what has been called the Grand Prairie Parkway.

 

In West Des Moines, that roadway will hook up with Mills Civic Parkway and creates additional development opportunities for the area. Representatives of Pavillion Park and We Compete could not be reached for comment on future plans for both the sports center and development ground where it had been proposed.

 

IEDA approved three of 10 applications it received last year for preliminary approval of Reinvestment Districts. In addition to Des Moines, projects were approved for Muscatine and Waterloo.

 

Waterloo has received final approval for $12 million in funding. The Des Moines and Muscatine projects could receive final approval in April.

 

As of Monday, IEDA had not received new applications, a spokeswoman said.