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NL council to consider tax rebate requests

Public hearing to amend urban renewal plan Dec. 22

NORTH LIBERTY– North Liberty may soon have its own bowling center– along with an arcade, laser tag arena, billiards room and sports bar, all under one roof.
At its Nov. 24 meeting, the North Liberty City Council heard a proposal from John Burchert to build a family entertainment center that would include all those amenities in a 37,000 square–foot building, located off Penn Street on Madison Avenue.
To accommodate financial incentives for the proposed facility, as well as the expansion of an existing business, city administration requested to amend North Liberty’s Urban Renewal Plan to bring the proposed locations into its urban renewal area. The public hearing for that action will be held Dec. 22.
Under the state’s Tax Increment Finance (TIF) laws, properties within urban renewal areas are eligible for economic development incentives like tax rebates.
A tax rebate amount had not been calculated for the entertainment center, unlike a second proposal that would also fall under the Urban Renewal Plan amendment. Business owners Scott Ramspott and Aaron Verhorevoort of Spotix, Inc. requested a TIF-funded tax rebate of 100 percent over seven years to expand its corporate facility, allowing for more inventory storage and an increase of 16 to 20 employees over three years. Also unlike the entertainment center, Spotix would not be constructing a stand-alone building, but plans to acquire 23,000 square feet of space in a property under development by Grand Rail Development, Inc. at an estimated $2 million purchase price.
Spotix owns and operates several online stores selling hearth, patio and barbecue products, and maintains a showroom at 570 Penn Ct. in North Liberty. More than 95 percent of the company’s business comes from outside the state of Iowa.
“We are expanding,” said Ramspott of the business. “We were named the fastest growing company by the Corridor Business Journal this past year. We are out of space and need to go to the next facility. Because we don’t need retail traffic, affordable economical space is what we’re looking for. We are looking for the help of North Liberty to grow our staff faster with the help of this TIF.”
The total amount of the requested rebate is around $370,000 over seven years.
City council member Brian Wayson asked how the expansion would benefit North Liberty, since Grand Rail is already constructing the building without assistance from the city.
“Well, after seven years you get all of our tax dollars,” Ramspott said. “If not, we could go to Iowa City or Coralville. If we don’t get this (tax rebate) we are going to look elsewhere.”
City Administrator Ryan Heiar told the council it was “coincidence” that Grand Rail was building at the same time Spotix needed more space, and noted the additional jobs Spotix would provide.
“I think it’s a good project because we have a company that is going to be doing $10 million worth of business, and virtually all of that money is coming from out of state.”
“So we are bringing money into our community and they are going to be employing 20 to 24 people. Employment gain is a positive position for us, a good project to support,” said Heiar.
Council member Terry Donahue did some quick calculations at the council table, projecting that the city’s contribution to support the job gains would be approximately $18,000 per new employee.
“That’s a pretty low cost per employee for the professional people they will have,” said Donahue. “I hope we would continue to talk.”
The proposed family entertainment center is projected to eventually add another 150 to 200 jobs to North Liberty’s economy, according to Burchert. He founded his first North Liberty company, TMOne, 13 years ago, and that business grew from two employees to 1,500 employees before he sold it two years ago. Since then, Burchert said, his three young children have inspired him to create another business that helps families create memories.
“I’m a firm believer in trying to find a way in life to circle back,” said Burchert. “We need a place to go, a place to congregate and to be a part of.”
Burchert’s vision for the family entertainment center is based on five years of market research inside the entertainment, restaurant and pub industries.
“It’s not your traditional 1980s bowling center that was dark and dingy, and maybe a lot of people smoking cigarettes. This is the next level. We want to raise the bar and standard, and put North Liberty on the map,” Burchert said.
Included in the plan is a section of boutique bowling, in which a number of lanes are partitioned off for private events and finished in higher-end décor and seating.
Again, Wayson asked how the project would benefit the residents of North Liberty.
“This project will create 150 to 200 jobs, create additional revenue into the market instantaneously, a lift of $150,000 year in taxes, and continue to keep North Liberty the center of the Corridor,” Burchert said, and it has the potential to bring additional entertainment facilities to undeveloped properties in the area.
“We think this is a start of something big. It’s the beginning of an idea that could be grandiose,” said Burchert. “It puts us on the map significantly, that North Liberty is the entertainment hub, and we are going to draw traffic from the surrounding areas.”
Wayson said both projects were interesting, but his decision would be based on the forthcoming developers’ agreements.
The council will hold a public hearing to expand its Urban Renewal Plan to include both property locations during its Dec. 22 meeting, beginning at 6: 30 p.m.