Des Moines sweetens its Market District incentive
Market District developers will receive up to 100% of the new taxes generated from their projects over the next 20 years.
- It will help subsidize construction, according to an agreement approved last month by the Des Moines City Council.
Why it matters: It's potentially millions of dollars more in taxpayer incentives.
- A previous agreement capped an incentive known as Tax Increment Financing (TIF) at 93%.
Context: The Market District is a 10-block, 39-acre area near downtown's East Village that was previously used by industrial businesses.
- A conceptual plan to transform the area into a downtown urban neighborhood with thousands of residential units, hotels, offices and entertainment venues was approved by city planners about two years ago.
- Redevelopment and new construction could exceed $1 billion.
State of play: Much of the area has been cleared for redevelopment and some streets are constructed and ready for new buildings.
- But developers worry that rising interest rates and construction-related costs could stymie progress.
What's happening: The boosted incentive is available to Market District projects that start by the end of 2027.
- Developers of projects that begin later will receive the lesser TIF incentive.
What they're saying: The additional incentive would likely lower a project's overall costs by a few percent points and could be important in maintaining construction progress in the district, developer Paul Hayes told Axios last week.
Of note: The development agreement prohibits the use of residential tax abatement.
- That leaves TIF as the primary local incentive in the Market District, Ryan Moffatt, an economic development coordinator for the city of DSM told Axios.
Bottom line: The district faces market challenges.
- The city is trying to offset some of the pain to keep the project's momentum.
What's next: There is likely to be a few building projects that come forward in the next year, Hayes said.
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