Tax Increment Financing

All Bettendorf City Council input into sports complex tax rebate deal done behind closed doors

The City of Bettendorf recently negotiated a complicated agreement with sports complex developers over a six-month period, but did so without even a single email or written document shared with city council members.

So how did the city reach a deal with developers Doug Kratz, Kevin Koellner and Ryan Hintze without sharing any written communication with city council members or any public meetings to discuss what should be in the contract?

According to City Attorney Chris Curran, the council was kept abreast of staff negotiations through "informational meetings" held behind closed doors.

Sports complex development agreement released; public hearing set for Feb. 15 council meeting

Scott County opposed to use of new tax incentives for hotel, retail and commercial service businesses in proposed urban renewal area

The agreement providing millions of dollars in tax rebates for expansion of the sports complex at Forest Grove and Middle Roads was released Friday afternoon (2/11), less than three days before the Bettendorf City Council holds a public hearing and votes on it.

The council has discussed the agreement in so-called "3-on-3 meetings" outside the public view for months, but has yet to talk publicly about the multi-million-dollar Tax Increment Finance (TIF) deal with developers Doug Kratz, Kevin Koellner and Ryan Hintze.

It is possible the city council could approve the deal without any members even expressing their views on the agreement.

The agenda for the council's committee-of-the-whole meeting at 5 p.m. Monday (2/14) includes a presentation by the city's Director of Economic Development Jeff Reiter. No public comments are allowed at those sessions.

The council is then expected to hold a public hearing and approve the development agreement at its 7 p.m. Feb. 15 meeting.

CLICK HERE to download the proposed development agreement.

Over 56 percent of tax rebates to sports complex developers would come from PV school taxpayers

Of the $14 million in tax rebates earmarked for developers of the bettplex sports complex expansion, more than 56 percent – nearly $8 million – are expected to come from the pocket of Pleasant Valley School District taxpayers.

That's because the Tax Increment Financing (TIF) planned by the City of Bettendorf for the northeast corner of Forest Grove and Middle Roads would allocated 75 percent of the "incremental" taxes from the development back to the developers Doug Kratz and Kevin Koellner over a 20-year period up to a maximum of $14 million.

When the city employs a TIF, all "incremental" property taxes (except those levied for debt service) are rebated back to the developers.

Those aren't just property taxes levied by the city, but by all taxing bodies within the TIF area, including those for the school district and county.

Former Jumer's Lodge site targeted to become new Home2 Suites by Hilton if tax rebate plan approved

A 109-unit hotel with a new all-suite extended stay concept would be built on the site of the old Jumer's Lodge in Bettendorf if the developer gets a 10-year, 100 percent Tax Increment Financing (TIF) rebate from the city.

The new development would be anchored by a Home2 Suites by Hilton, an extended stay brand that offers a full kitchen in each unit, free breakfast and welcomes pets. Hilton has one other Home2 Suite hotel in Iowa located in Coralville.

City/Ascentra Credit Union eye Town Square deal; includes 10-year, $2-million TIF and land swap

Bettendorf's vacant Town Square block – between State and Grant Streets and 20th and 21st Streets – would become the site of a new four-story, $9-million Ascentra Credit Union headquarters under a development deal before the city council.

Mayor enlists friends to lobby fellow city council members; push for city sports complex incentives

Bettendorf Mayor Bob Gallagher – apparently fearing fellow city council members might reject millions in taxpayer funded incentives for a proposed sports complex – sent an email to friends and associates last week urging them to lobby the city council in support of the venture.

"I have learned that people who detract from projects organize and gather to be heard," Gallagher wrote in the email. "While those who trust their elected officials and support wonderful projects, usually don’t make it a point to be heard. That is human nature. I need you to please be heard on this one!"

Gallagher attached a copy of a "city incentive versus city benefits" memo which claims the $45-million sports complex would provide a $2.95 million "net benefit" to the city. However, the analysis failed to include an estimated $14 million in tax rebates the developers would receive under the 20-year Tax Increment Financing (TIF) deal.

City would give developers $14 million in tax rebates, plus $7 million in upfront incentives under sports complex deal up for city council approval May 2

Developers of the proposed Bettendorf sports complex would receive more than $14 million in property tax rebates over the 20-year life of the Tax Increment Financing (TIF) deal with the city. That's in addition to $7 million in upfront incentives from taxpayers contained in a development agreement on the fasttrack for approval by the city council Tuesday (5/2).

In a "talking points" memo given aldermen by City Administrator Decker Ploehn, the city claims the "net benefit" from the sports complex (if a 100-room hotel is built) would be $2.95 million. However, the "city incentives vs. city benefits" overview fails to include 20 years of "incremental taxes" which will be rebated back to the developers.

Without the TIF, those "incremental taxes" from the development would otherwise go to the city, the county and the Pleasant Valley school district.

Bettendorf sports complex developers to get more than $7 million in upfront grants and loans; no plans to conduct 'due diligence' review of development

Even though Bettendorf will upfront more than $7 million in cash, grants and land acquisition to developers of a $45-million sports complex, city officials say they do not intend to conduct any detailed financial review of the project or project partners.

Asked via email if the city had in the past, or planned in the future, to conduct any due diligence review of the finances of developers involved in the project, City Administrator Decker Ploehn replied with a one-word answer: "No."

In past Tax Increment Financing (TIF) development deals, city officials have been unconcerned with developer finances because city tax rebates wouldn't occur unless the development was completed at the agreed upon investment by the developer.

If the project was not completed, city officials reasoned in the past, there would be no "incremental tax" to then rebate back to the developers.

However, the development package prepared by city officials and scheduled for a public hearing and approval May 2 by the city council, would provide $1.9 million in cash, a $4.9 million upfront grant, plus $600,000 to buy 10-acres from the developers when the building permits for the sport complex are issued this summer.

Bettendorf betting $11.2 million on sportsplex to kickstart development at I-80 and Middle Road

After secret briefings given Bettendorf aldermen in mid January, the city added $11.2 million in bonds to its proposed budget to pay for roads, sewers, stormwater detention and developer loans and rebates for a sports complex at Forest Grove and Middle Road.

According to documents and emails obtained by Bettendorf.com through a Freedom of Information request, city officials in those non-public sessions discussed with aldermen the impact the sports complex would have on next year's capital improvement plan (CIP), city tax levy and debt margin.

The project was outlined a month later at a news conference Feb. 17 by Mayor Robert Gallagher and developer Douglas Kratz, but aldermen have yet to publicly discuss the sport complex plans or its financial impact on city finances at an open city council meeting.

'Sports complex' allocated millions in proposed city budget; project yet to be publicly discussed

The proposed Bettendorf city budget would allocate more than $15 million to build a "sports complex" that has yet to be discussed publicly by aldermen.

The budget – which will be discussed at an all-day public work session Saturday (2/11) – includes $2 million for purchase of land for the "sports complex," more than $2 million for roads, lighting and sewer extensions for the project, and lists the issuance of $11.2 million in debt (bonds and notes) to finance the facility construction.

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