Johnston council adopts Dragonwood urban renewal plan to enable TIF incentives for new business park

The Johnston City Council voted to adopt Resolution No. 25-71 on March 17, 2025, creating the Dragonwood Urban Renewal Area and adopting the Dragonwood Urban Renewal Plan to support commercial and industrial development near the interchange of Highways 141 and 415.

The plan covers parcels in the northwest annexation area and would allow the city to undertake urban renewal activities, including grants and public improvements. City staff told the council the plan is consistent with the city's future land use plan and current zoning, and that it would be Johnston's sixth active urban renewal plan if adopted.

City staff said the city expects to consider a development agreement with 141 Business Park, LLC, for a multi-phase business park on roughly 57 acres within the proposed URA. As described to the council, incentives under a future development agreement could include tax-increment financing rebates not to exceed $3,500,000 for that developer. Staff also said the city could consider future development agreements for other projects consistent with the plan, with total incentives for the URA not to exceed $15,000,000. Planning, engineering and staff costs related to URA activities were listed in the plan as an amount not to exceed $50,000.

City staff stressed that projects are conceptual and that any specific development agreements or incentive packages would return to the council for approval. Staff also said the plan was reviewed in a consultation meeting with Polk County and the Johnston Community School District on Feb. 13 and that no comments were received. The planning and zoning commission found the plan in conformance with the comprehensive plan at its Feb. 27 meeting and recommended approval.

Separately, the council approved the first reading of Ordinance No. 11-36, the tax-increment financing ordinance that implements TIF on the Dragonwood URA; staff said the base year valuation is expected to be set at the Jan. 1, 2025 assessed value and that the TIF split (division of taxes) would sunset 20 years from the first year revenue is divided under Iowa Code chapter 403.

Several council members and staff discussed design expectations for development along Highway 141. Council members said they want higher-quality materials, additional landscaping and attention to the appearance of buildings facing the highway. Staff and a member of the development team told the council the developer has indicated support for higher-quality facades, additional trails and public art beyond minimum zoning requirements. Council discussion included questions about nearby interchanges and access improvements described as part of joint projects with Polk County and the Iowa Department of Transportation.

The council adopted Resolution No. 25-71 and approved first reading of the TIF ordinance. City staff said once the plan is adopted, a separate TIF ordinance and any development agreements would be negotiated and require future council approval.