Keokuk council amends Twin Rivers TIF area and clears path for MM Real Estate proposal

The Keokuk City Council on Tuesday approved an ordinance amending the Twin Rivers urban renewal area to include additional parcels tied to a proposed redevelopment and adopted a resolution to solicit competing proposals and set a June 4 public hearing.

Jim (staff member) told the council the proposal on the table comes from MM Real Estate LLC and developer Mike Morfeld, who initially considered roughly 45 housing units and has since scaled plans to about 36 units to match workforce housing tax credit program limits; the city’s development agreement lists a 30-unit minimum. "He had an estimate of 7 million earlier on...the agreement itself requires him to invest 5.3 million," Jim said, adding that the developer would rely on state workforce housing tax credits and additional brownfield/grayfield credits.

The packet lists a city cash contribution of $1,283,000, Jim said, to be provided on a reimbursement basis and reimbursed through tax increment financing (TIF) progress payments (up to 50% of progress payments). Jim described that figure as the gap the developer needs to meet bank lending coverage: "This is the gap," he said. He added that the developer would need to spend roughly $2.5–3 million up front to reach the reimbursement threshold for full credits.

Staff flagged contingencies: the workforce housing tax credit application deadline is in June and other tax-credit applications are in the fall. Jim said the city would publish a 30-day notice inviting competing proposals, close the submission window around June 1, and hear proposals at the June 4 council meeting. If no qualified competing proposals arrive, the resolution declares the council’s intent to accept the MM Real Estate LLC offer.

Council members pressed for clearer financing details and the developer’s "skin in the game." One council member asked for a developer cash-flow or financing worksheet; staff agreed to ask the developer for high-level figures to show the expected assets, liabilities and projected revenues. Council also discussed alternatives, including demolition; staff estimated demolition costs could run "in the one and a half to $2 million range," though no demolition motion was made.

The staff presentation included other financial context: the city spent about $3 million on the facility’s earlier renovation, the building currently carries annual operating net losses estimated at about $130,000, and an appraisal cited in the packet put the property’s value at $215,000. Jim noted that the Economic Development Administration (EDA) contributed about $1 million to the original renovation and that, if the city discontinues the facility’s original use before 2032, the EDA could seek repayment up to the amount of its contribution. Using the proportion cited in the materials (32% of original project cost), staff estimated the potential EDA payback at roughly $70,000 based on the $215,000 appraisal.

Council proceeded through procedural steps related to the ordinance: the body approved the ordinance’s initial reading, voted to waive the second and third readings (a supermajority was required), and then adopted the ordinance on final vote. Roll-call responses were recorded for Marshall, Walker, Mahoney, Matlick, Andrews, Van Burkham, Bryant and Greenwald; the motions passed.

What’s next: the city will publish the 30-day notice and accept competing proposals through the stated deadline; council will consider proposals and the development agreement after the June 4 public hearing. Staff said the developer is aiming to meet state tax-credit timelines so work could advance this year if awards are secured.

Why it matters: the action moves a long-stalled property off the city’s operating ledger toward private redevelopment, but it also commits the city to a sizable upfront TIF-funded reimbursement and leaves unresolved risks including potential federal EDA repayment obligations, building remediation costs and the developer’s final financing plan.