City of Muscatine supports tax credit applications by Merge

Margaret Hurlbert
Margaret Hurlberthttps://discovermuscatine.com
Margaret Hurlbert works as the Editor of Discover Muscatine Newspaper.

Muscatine Living

MUSCATINE, Iowa–During a special session April 14, the Muscatine City Council unanimously approved a resolution supporting Merge Urban Development as they apply to the Iowa Economic Development Authority for workforce housing tax credits to help fund development of Carver Corner. The tax credit application represents the first step in redeveloping the area after many years of sitting dormant.

In 2019, Merge Urban Development submitted a proposal for creating a mixed use residential and retail building at Carver Corner. However, the developers did not feel they had the full support of the community and withdrew their initial proposal. In 2021 the City of Muscatine began communicating with Merge again. In February of this year, at their in-depth meeting, city council directed city staff to find out if Merge could provide an updated proposal for Carver Corner.

Merge responded with a project that would initially start with one mixed use residential and commercial building that could eventually expand to up to five buildings, if the city so desired. The first building, located at the corner of Hershey Avenue and Green Street, would include 56 total apartments, studio, one bedroom, and two bedroom units. Merge representative Brent Dahlstrom estimated the units would cost tenants between $850 and $1,500 per month, based on the cost of rent at other apartments they have built elsewhere in Iowa. A 44 car parking lot would adjoin the building. If city council wanted, the development could include significant green space as well.

In order for Merge to move forward with applying for workforce housing tax credits, they required a resolution of support from the city council. City council seemed open to the project and unanimously approved the resolution. “I’m glad to see progress on this,” said councilmember Angela Lewis. “I think it will be good for the community.”

Council member Jeff Osborne shared Lewis’ outlook on the project, expressing excitement that a project that had taken so long to get going appeared to have gained momentum. “I’m really appreciative of Merge and others taking an interest in Muscatine,” he said.

Once Merge moves farther along in the development process, they will purchase the land for $50,000. They have requested tax increment financing, or TIF, for the project at 90% for 15 years. Though this is somewhat higher than what the city usually provides (about 50% for 10 years) Finance Director Nancy Lueck did not consider it an unusual request. For reference, she shared that the recent Hershey Lofts renovation project received 100% TIF from the city for 10 years. City Administrator Carol Webb also reminded council that they will not need to set the final TIF amount, or other specifics for the project, until a later date.

Work on Carver Corner represents one of several revitalization projects taking place in Muscatine’s South End and the surrounding area. KENT will soon begin work on repurposing the McKee Button Factory for additional office space and the Community Foundation of Greater Muscatine continues to work with the city on improving several parks and adjacent projects.

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