This story has been updated to clarify terms of the incentives being sought for this project. Incorrect information was provided to the Telegraph Herald.
A proposed six-story, $20 million structure would offer apartment and retail space in the Port of Dubuque.
Merge Urban Development Group plans to construct the multi-use structure on a vacant stretch of land just west of the corporate headquarters for Flexsteel Industries Inc. It would have space for multiple business tenants and house about 180 apartment units.
Merge officials said the facility would provide appealing living space in a market starved for rental units.
“There are a lot of people who want to live in Dubuque that don’t have the opportunity to do that today,” said Brent Dahlstrom, a partner with the firm.
Representatives from the company cautioned that the project is subject to city approval.
If such approval is granted, construction on the property likely would begin in the summer or fall of 2020. Dahlstrom said projects of this size generally require a “15-month build.”
Rick Dickinson, president and CEO of Greater Dubuque Development Corp., emphasized that there is a “definite need” for rental housing in Dubuque, noting that vacancy rates are very low in existing structures.
“The location is perfect, both for the community and for the occupants of the apartments,” he said. “It would have great access to amenities and employment downtown, and it is an absolutely appropriate use of that space.”
The new facility will include a variety of market-rate apartments in the upper five floors.
The building would feature a brick facade on most levels with metal panels on the top stories. Merge partner Joy Hannemann said this building design aims to “blend the historic downtown of Dubuque with the more modern look of a mixed-use building.”
Apartments will range from 400-square-foot “microresidential” units all the way up to 900-square-foot, two-bedroom units. There also will be studio and one-bedroom options.
Monthly rent likely will range from $800 for the smallest units to $1,400 or $1,500 for the largest.
The facility will feature multiple amenities, including a gym, courtyard and fifth-floor patio. Officials also noted the complex will be pet-friendly.
The first level would boast 23,000 square feet of retail space.
Merge officials noted that similar, mixed-used buildings have featured everything from grocery stores to barbershops. They said it is unclear what kind of entities would occupy the building in the Port.
“That will really be decided by Dubuque and the entrepreneurs of the area,” said Dahlstrom.
The development would be located on a V-shaped plot of land, which runs parallel to East Fifth Street and Ice Harbor Drive and backs up to a large, public parking facility.
City Council members on Monday will vote on whether to set a public hearing for a proposed development agreement between Merge and the City of Dubuque.
Under the proposed agreement, Merge would purchase 1.22 acres of city-owned land for about $800,000. A land acquisition grant would reduce the actual payment to about $400,000.
The City of Dubuque also would issue tax-increment-financing rebates to the developer. TIF repays companies for incremental increases in property taxes resulting from an expansion or improvement to a property.
In this scenario, the city would repay an estimated $1.8 million over 10 years, according to Dubuque Economic Development Director Jill Connors.
Tenant parking would be available in an existing surface parking lot near McGraw-Hill Education.
Mayor Roy Buol called the project a “substantial addition to our Port of Dubuque area.”
The project could become a reality in part thanks to a relatively new federal program that incentivizes investment in low-income areas.
Opportunity Zones were added to the tax code in late 2017 as part of the Tax Cuts and Jobs Act.
The program provides an enticing deal for investors, who are able to temporarily shield capital gains from taxation while they are within “Qualified Opportunity Funds.”
A pair of opportunity zones have been established in Dubuque — one covers a large swath of the city’s North End, while another includes a significant portion of Dubuque’s downtown and riverfront areas.
Merge, which has offices in Madison, Wis., and Cedar Falls, Iowa, focuses on Opportunity Zone development in the Midwest. It has overseen multiple projects, including a mixed-used space nearing completion in Waterloo.
David Lyons, a sustainable innovations consultant with GDDC, said this will be the first Opportunity Zone project in Dubuque.
He emphasized that the vast majority of Opportunity Zone projects have occurred in large metro areas and praised Merge for its ability to see potential in smaller communities.
“This is a very unique thing,” Lyons said.