The new Urban Campus of Scott Community College in downtown Davenport will be even better than originally planned, thanks to an additional — and unexpected — $2 million generated by the sale of tax credits.
About $4 million was expected to be raised through new market tax credits, but there was so much interest from US Bank that the amount increased to nearly $6.4 million, Chancellor Don Doucette told the Eastern Iowa Community Colleges board of trustees Monday night.
As a result, the project's scope was expanded, adding a community room, the build-out of a couple of science labs, more space for the college's new virtual reality program and a center for information technology and business entrepreneurship and innovation, Doucette said.
The additional money will "add functions to make an even better space," he said.
Total project cost now stands at $30 million.
The campus will be built in the block between Brady and Main streets, facing 3rd Street. It will use the First Federal Savings and Loan building on one end and the former First Midwest Bank building on the other, with a new connector building in between the two.
Final financial closing occurred over the holidays. Because of all the documentation, Doucette said he found himself signing his name more than 600 times on 411 pages on Christmas Eve.
Construction is expected to begin as soon as bids can be awarded and "there is a lot motivation to get done by the end of 2017," Doucette said. Classes would begin there in January 2018.
The special meeting Monday was called to approve two procedural items needed to get construction underway.
In the first item, a nonprofit entity created by the district called the EICC Downtown Campus Foundation sold the former bank buildings to a for-profit, indirect subsidiary of the foundation called New College LLC for $5.1 million.
With design, demolition and asbestos abatement work is figured in, that is the same amount the district paid for the buildings.
The reason a for-profit entity needs to be involved is because only for-profits can receive the tax credits upon which the financing depends.
Once the tax credit recapture period expires in seven years, New College LLC can refinance its construction debt and continue owing the building or it can put the campus up for sale, Dick Davidson, an attorney from the law firm of Lane & Waterman who is advising the district on the project.
There can be no prior agreements that bind the college or New College, so "anything's possible," he said. "But, like the Adler, who's going to want it?" he said, referring to the campus.
He explained that the same model was used by the city of Davenport to successfully renovate the Adler Theatre.
Also Monday, the district signed a 19-year lease agreement with New College LLC that will begin when classes in the new space begin. The lease is for $1.3 million annually, which will be used by New College to pay its debt service and other costs associated with the financing, Davidson said.
The Urban Campus will replace the district's two existing downtown locations, the Kahl Building and the second floor of the Ground Transportation Center, consolidating them in one place for more efficiency.