The Iowa Economic Development Authority Board OK’d the extension of a reinvestment district that will provide the city with about $3.5 million for downtown and riverfront projects over the next 20 years.

“This is really positive news,” Mayor Dave Flattery said Friday. “It will bring new life to the downtown.”

“It’s a major step forward and it speaks well for the city,” he added.

Flattery thanked city staffers who wrote and submitted the application for the expanded district.

What the Economic Development Authority board approved Friday is an expansion of the reinvestment district that has been in place at Corridor Plaza since April 2022. That initial district is providing $17 million to help with the redevelopment of the former Crossroads Mall area.

That district will now be extended down First Avenue South to downtown and the riverfront.

Increased state sales tax revenue generated in that extension of the district will be given to the city to help pay for projects there.

“It’s essentially the city’s opportunity to capture $3.5 million that would otherwise go to the state,” said Chad Schaeffer, the city’s chief development officer. “This is money that we can bring back to our community to be reinvested in our community.”

Flattery said he believes the approval of this district extension is “just a reflection of the success that we’ve had at Corridor Plaza.”

He added that there are developers interested in downtown projects. He estimated that the reinvestment district revenue could leverage as much as $20 million in private investment.

Schaeffer said the reinvestment district money could be used for these projects:

• Demolition of two fire damaged buildings in the 1100 block of Central Avenue and subsequent redevelopment of the property.

• Supporting the redevelopment of the hotel at First Avenue South and Third Street.

• Creation of a restaurant or bar and grill on the riverfront

• Rehabilitation of the Trolley Center at Central Avenue and Ninth Street.

• Renovation of other downtown buildings

Finalizing a contract between the state and the city will be the next step in the reinvestment district process. Schaeffer said that contract will be presented to the City Council for action in the next 30 to 45 days.