Cedar Falls council approves $950,000 forgivable loan for downtown Riverplace mixed‑use project after heated debate
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Summary
After questions about parking, contract language and TIF risk, the Cedar Falls City Council approved a development agreement with River Place Properties 2 LC that offers a $950,000 forgivable loan payable on project completion in place of the city's usual 10‑year tax increment rebate.
The Cedar Falls City Council on Feb. 2 approved a development agreement with River Place Properties 2 LC to build a four‑story mixed‑use building at 3rd Street and State Street, authorizing a one‑time $950,000 forgivable loan that would be paid after the building receives a certificate of occupancy. Shane Graham, city staff, told the council the project will include about 4,700 square feet of first‑floor commercial space and 18 residential units above, and staff estimated the property’s assessed valuation after completion would be $8,376,460.
The council’s decision followed an extended public hearing and council discussion that focused on the cash‑flow tradeoffs, parking, and the contract’s appropriation language. Graham described the incentive request as an alternative to the city’s typical 10‑year, 100% tax‑increment rebate and said staff’s estimate shows the upfront payment would be lower by roughly $510,000 over 10 years compared with the standard rebate. "The developer is asking, requesting an incentive that is outside of the typical incentive request that we typically see...a one time payment of $950,000 in the form of a forgivable loan," Graham said.
Residents and council members pressed for safeguards. Daryl Cruz, a former council member, urged clearer public notice and protections for shared parking, saying, "The public needs to see what's happening" and stressing that remote shared parking must remain tied to the development if the properties are sold. Kim Jordan, a Cedar Falls resident, raised concerns about downtown parking impacts on older residents and questioned whether TIF commitments and other long‑term obligations are being fully accounted for.
Council members debated the substance of the loan and the DA’s language. Several members sought clarification about a so‑called "4% floor" used in staff calculations. The mayor and staff explained that the 4% figure is used to calculate a conservative minimum expected return over 10 years rather than a market loan interest rate: "The 4% is really meant to say...we just use 4% as a rate to calculate what would the estimated total amount be over the 10 years," the mayor said. Attorneys and staff also explained that annual appropriation language and escape clauses are common in development agreements to avoid pushing obligations against the city's long‑term debt limits.
Taylor Morris of Eagle View Partners, representing the developer, said the proposal "fits the form base code" and "meets the parking requirement," noting the team has iterated the design to make the site feasible. Staff said the plan provides 29 on‑site parking stalls (20 enclosed under the building, 9 at grade) plus 9 shared stalls on adjacent property owned by the developer; planning staff said the shared parking must be signed and remain available.
After discussion and public comment, the council voted to approve the agreement; the clerk recorded two "nay" votes and announced the motion passed. The DA includes repayment provisions if the city’s tax increment collections fall short over the 10‑year period and describes conditions for forgiveness after that period. The project is anticipated to start construction in spring with completion expected in 2027.
Next steps: the city will finalize the development agreement and the parties will proceed toward building permits and construction; project completion would trigger the forgivable‑loan payment schedule and the DA’s monitoring provisions.
