To spur growth council extends 10-year TIF to multi-use development
By The Cedar Falls News Hub Staff
The sounds of ongoing construction could be heard this week on College Hill on the site of a mixed-use $6.2 million development project, first approved in 2021.
The plan for 2119 College Street is to build a 31,200-square-foot five-story building, which will feature retail on the street level and apartments above. Forty-seven onsite parking spaces are planned.
At the Feb. 3 City Council meeting, the council voted 6-1, with Councilman Daryl Kruse in opposition, to extend for 10 years tax rebate incentives to this project, upping it, at the developer’s request, from the five years of tax incentives the project was originally granted in 2021.
An amended contract between the city and the developer, CV Commercial LLC, was added to the council packet for the Feb.3 meeting, which reflected a discussion held by the council on Jan. 6, during a meeting of the committee of the whole. In that meeting, the council voted 5-2, with Kruse and Gandfield in opposition, to grant the developer’s request for a 10-year tax incentive.
No council discussion took place during the Feb. 3 meeting prior to the vote.
The council packet for that meeting included a letter of support by the College Hill Partnership, urging the council to grant the project a 10-year Tax Increment Financing in order “to ensure that the positive momentum we are working to build in College Hill continues and that the area remains a thriving and dynamic part of the community.”
According to the revised contract between the city and the developer, if the project is completed by Dec. 31, 2026, starting in June of 2029 and until June 2038, the project will receive economic development grants of 100% tax increments for each year, according to the new contract.
Originally, the project had a 5-year tax rebate incentive, but after the council adopted 10-year TIF rebates for new developments in town, the developer, Brent Dahlstrom, approached the city with a request for consideration for a 10-year tax rebate for the project.
A substantive discussion prior to the Feb. 3 council meeting happened during a Committee of the Whole meeting on Jan. 6.
Committee of the Whole Meeting Jan. 6
The issue the council wrestled with in the Jan.6 meeting was whether they would be setting a precedent by extending a 10-year tax incentive, a measure reserved for new developments, to a project that had been on the books since 2021.
Mayor Danny Laudick told The Cedar Falls News Hub that he brought the issue to the Committee of the Whole meeting to gauge the willingness of the council to extend the 10-year incentive prior to putting the item on the council agenda.
“The request was outside the normal scope because it was a request to retroactively go back and amend a previous development agreement to change it from five years of incentives to 10 years,” he said.
How the council voted during the Jan. 6 meeting
Developer Brent Dahlstrom appeared before the Committee of the Whole on Jan. 6 in the council chambers to petition the council to consider extending a new 10-year tax incentive rule to his project.
In the Jan. 6 Committee of the Whole session, the council voted 5-2 to okay the 10-year tax rebate incentive for the project.
Council members Gil Schultz, of Ward 1, Chris Latta, of Ward 2, Aaron Hawbaker, of Ward 4, where College Hill is located, and at-large council members Hannah Crisman and Kelly Dunn, voted for the 10-year tax incentive.
Opposing the measure were Daryl Kruse, of Ward 3, and Dustin Ganfield, of Ward 5.
How the issue evolved
Under the 2021 agreement with the city, the College Hill project had received a five-year tax rebate incentive, as was customary at the time. Due to a late construction start, which coincided with the pandemic and rise in costs for construction, among others, in 2024, the city amended the agreement, extending the five-year tax rebate.
After that extension, the council approved rules to offer a 10-year tax rebate to new construction projects in town. That change prompted Dahlstrom to ask the council to grant his project the 10-year rebate.
What happened at the Committee of the Whole meeting
In making the case for his College Hill development project, Dahlstrom said the momentum on College Hill had shifted away from the “great momentum somewhere around 2015,” when several new buildings opened for business.
Dahlstrom said College Hill’s development momentum included the popular coffee shop Sidecar, which launched in 2013 at 2215 College Street, and the building housing Domino’s Pizza at 2024 College Street.
Since that time, things have stalled on College Hill, in part, because interest rates and costs had risen significantly, Dahlstrom said.
Increasing the tax incentive to 10 years for the project would spur further development on the Hill, Dahlstrom said.
Council members asked for details about Dahlstrom’s project, including the timeline.
The developer said that he had not closed on a loan yet because he wanted to hear from the council’s decision on the 10-year rebate before moving forward.
“We have just put the foundations and the lender is waiting to see if this is going to be approved,” he said.
Street and College Street. Photo by News Hub Staff.
Dahlstrom also said that his company will be bringing to council another plan, for the property across the street and next to the liquor store.
Extending tax incentive to 10 years is also important to others looking to invest in the area, Dahlstrom said.
“So what I want this project to be is the start of another great shift forward on College Hill. I want this to be a neighborhood that we’re proud of and start to see this just be the first of many buildings.”
Increasing the tax incentive to 10 years for this particular project would spur development, he reiterated.
“[You’ll be] sending a message to developers such as me and others to start to invest in this town and in this area as we move forward,” Dahlstrom said.
Support for the 10-year tax incentive
Crisman supported the 10-year incentive, arguing that “this is a unique opportunity because this building has not been built yet.”
“I think typically, if a building were already built or far along in the process, then this isn’t something that we would consider,” she said. “But because we have just changed the policy, I think, to me, it makes sense to offer the 10-year incentive. ”
Crisman said the council is working on updating College Hill zoning ordinances as well.
“I think this is the kind of thing where, again, while not typical, we’ve really got to push forward with things like this. If we want to see the change that we’ve been talking about,” Crisman said.
Ultimately voting in support of the 10-year incentive, Dunn voiced her hesitation with the decision.
“I, too, love College Hill. I appreciate that you filled in a hole that sat vacant for, I don’t know, 10 years, so thank you for the work that you’ve done,” she said.
But she said she had some concerns.
“This is where I struggle, I hate violating policy. … I know that this is the policy now, but it was not the policy at the time,” Dunn said.
Rationale for opposing extending the incentive
Kruse, who attended the meeting virtually, took issue with Dahlstrom’s statement about the lack of development on the Hill in the past decade.
“We’ve had a lot of developments in the last 10 years to say that nothing has been developed there, that’s kind of a misstatement, I think you just look at the new buildings that have been put up and so on and so forth,” Kruse said.
Noting that he wasn’t in favor of extending the tax credit because he worried that other developers would come to the council for changes every time the council added a new policy, Kruse said, “I’m sorry about that, but that’s just kind of how I feel.”
Latta said he favors making the change because Dahlstrom’s project is “very much in its infancy.”
“You really haven’t started this project beyond a very little portion of it,” Latta said to Dahlstrom.
Development in College Hill has been “quite stagnant” but Dahlstrom’s project has great potential, Latta said.
“We don’t wanna open a can of worms or set new precedents, but I don’t necessarily feel as though that’s what we’re doing here. I think we already have intent moving forward and in future projects,” Latta said.