Davenport City Hall.

City council members on Wednesday advanced a proposed land sale bolstered by local and federal tax incentives that would go to a real estate developer seeking to put a new five-story building with micro-apartments and retail in Downtown Davenport.

The prospective buyer is Merge Urban Development, a Cedar Falls-based firm. The vacant land pursued by Merge is in the 200 block of East 2nd Street, just south of the RiverCenter events venue. 

Building design plans show a 50,000-square-foot building with 60 market-rate apartments including some so-called micro-apartments, or minimalist units smaller than the average studio. “Micro retail” would be available on the 6,600-square-foot ground floor for small business owners to set up shop.

Under the proposed deal, the developer would be pre-approved for a maximum 100% property tax break on the improved land for 10 years for its residential space and have the option of choosing a sliding scale or fixed break for its ground-floor retail, said Bruce Berger, the city’s economic development director.

The city would also be required to sign a letter of support for the developer to pursue tax credits offered through a state program related to workforce housing in disaster areas. Many state grants come with a local match requirement, which Berger said would be satisfied by the property tax break.

Meanwhile, the developer would have to pay $250,000 for the land and meet several conditions, including making a non-refundable $10,000 down payment. The developer would also be required to begin construction within one year and finish within 30 months after closing.

City council members put approval of the land sale on their consent agenda, signaling likely passage next week.

Selling the land for commercial development has been accepted by council before. But an earlier deal fell apart.

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In April 2018, aldermen signed off on selling the land for $250,000 in a development deal spearheaded by TAG Communications, a Davenport-based marketing firm. TAG wanted the space for an expansion of its neighboring headquarters and other mixed use.

TAG CEO Mike Vondran has said the deal “just didn’t come together” at the end of the day.

In other news

An amendment to a new city law overseeing local massage parlors was moved forward by aldermen to the city’s consent agenda for next week. The amendment aims to close loopholes in the law council approved in March with the intention of rooting out illicit massage parlors in the city, some of which have been identified as possible fronts for sex trafficking and prostitution. 

Ordinance amendments usually need to be approved by a majority of council members three times over a six-week period to be enacted. But aldermen may choose to expedite that process next week. 

Proposed changes include giving local law enforcement greater leeway to investigate massage therapy businesses licensed by the state, an expansion of the current ordinance’s reach. Licensed massage therapy outfits could be shut down if the city has “probable cause” indicating that prostitution has happened there.

Businesses also would not be allowed to reopen for 12 months if they are found to be out of city compliance twice within a one-year period.

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