Local Assistance from the City of Marion
Marion, IA has a strong track record of collaborating and partnering with businesses that make significant investments in our local economy. The City of Marion utilizes the following Economic Development policy to guide decisions that best support our local business community with fiscally responsible public assistance.
Businesses and projects seeking assistance from the city of Marion should follow the application process outlines below. Any questions should be directed to Marion Economic Development Corporation. MEDCO facilitates the process for any Marion companies pursuing incentive tools.
Purpose of Public Assistance
Use of TIF requires a finding of Public Purpose for the use of City funds to support private development. Projects that meet the Public Purpose test achieve one or all of the following criteria. Examples of the criteria may include, but are not limited to:
Expansion of the employer base. Projects that expand the community employer base in general include recruitment of new businesses and expansion of existing local employers. Preference will be given to projects that provide full-time positions that meet or exceed the labor shed average wage and benefit package and those projects that fit an identified niche in the community ( ex. Senior housing, low to moderate incoming housing as determined by a market analysis).
Expansion of the property tax base. An expanded property tax base is key to keeping property taxes at a reasonable level for existing property owners. Examples would include projects that expand the commercial and industrial property tax base, including the support of municipal or nonprofit facilities that drive private investment. Residential projects may only be considered if there is a concrete, identified need in the community or consistency with a targeted development plan that is part of a mixed use development. Specific examples would include the extension of infrastructure into areas to create development opportunities, regional stormwater detention, airport development, and partnerships to develop industrial or commercial business parks.
Diversification of the property tax base. Reducing the community's reliance on the residential property tax base is a key priority of the city. Projects include business construction or expansion projects, commercial and mixed-use historic preservation/restoration projects, and infrastructure projects needed to ready areas for private investment.
Diversification of Marion's employer base. Robust communities are not overly dependent on a limited number of large employers to provide job opportunities. A diverse business sector reduces risk to a community from sudden changes in the economy. Projects that do not duplicate the products or services offered by existing Marion employers will be given preference. Expansion of existing employers will be eligible as well.
Elimination of competitive barriers. Competitive barriers include infrastructure that cannot support a particular business, such as upgrading intersections. Additional competitive barriers include incentives available in other communities that preclude Marion from being able to compete for a project, such as lack of available zoned and developed land. Specific projects examples include the Marion Enterprise Center, Industrial Center East, and the Tower Terrace West corridor.
Remediation of brownfield areas. Eliminating hazards posed by brownfields is a longstanding public purpose. Projects include privately led redevelopment of underutilized or vacant parcels, city expenses needed to correct environmental conditions, and public projects to eliminate future hazards via land use controls.
Meeting requirements for funding from other government entities. State and federal requirements for local matching funds shall be considered a public purpose. This would include direct financial assistance, tax credits, or other state and federal funding programs.
Acceleration of tax base. Assistance may be provided if it can be shown to accelerate the construction of facilities into an earlier year. Acceleration may be applied in all identified districts.
Highest and best use. Should public assistance result in a higher use of property than otherwise contemplated, the city may provide assistance. Highest and best use may be applied in all districts.
Height bonus. In certain districts, the city may identify areas in which it is in the public interest to foster higher density through vertical construction. Development may qualify for additional incentives if needed to maintain project feasibility with additional floors. This may only be applied in identified districts or sub areas within identified districts.
Compliance with Active Living Policy. The City of Marion has adopted an Active Living Policy that incorporates the principles of biophilic design and other concepts fostering the goal of an active community. Incentives may be used to provide assistance to projects that exceed city code requirements based on these principles, or similar principles.
All projects shall be expected to create minimum increases in taxable value to be eligible for assistance. Projects in the Uptown Main Street District and in the Central Corridor Urban Renewal Area must increase the value of a property by at least $250,000, unless the use of the incentive is for specific purposes outlined elsewhere in this policy (ex. Safety improvements). Projects in all other districts must increase the assessed value of a property by at least $500,000, with the additional requirement that speculative development must increase the value by $750,000.
In return for public financial assistance, developers will be expected to meet all or some of the following minimum standards (not in priority order):
- Achieve high quality architectural and site design
- Offer energy efficiency and sustainability features beyond what is required through adopted building codes
- If a residential project, the contribution to an affordable housing fund or the provision of a certain percent of affordable housing units within the project that fill a need identified by the City
- Creation and/or retention of high quality jobs
- Developer equity (not including debt) to be equal to or greater than the public financing requested
- The redevelopment of underutilized and/or blighted properties
- Projects achieving public purposes as detailed in the Comprehensive Plan, Adopted Sub-area plans, Urban Renewal Area planning documents, market sector studies, and/or the City Council adopted Strategic Plan (or other plans as applicable).
Despite the need for the program to be flexible in order to respond to the ever changing economic conditions of the marketplace, it will be the policy of the City to ensure that the underwriting of incentives is an open and transparent public process which instills confidence in the public's understanding of how economic development incentives are utilized.
Does Your Project Qualify?
Use this quick test to determine if your project may qualify for assistance from the City of Marion.
General Criteria for All Projects
- All Projects that qualify for public assistance must align with and support any relevant sub area plans
- All building projects that qualify for public assistance must increase the assessed value of the property by a minimum of $500,000. Speculative buildings must increase the assessed value by a minimum $750,000.
- All located within the Uptown Marion Main Street District AND also located within the Central Corridor Urban Renewal Area must increase assessed value of property by $250,000.
Additional Unique Qualifying Criteria
- Existing Building Investments - For investments in existing buildings that are located in the Uptown Marion Main Street District that do not meet minimum value thresholds, assistance is available for projects that address ADA, building safety, or historic preservation improvements. For all other projects outside of the Main Street District, these expenses qualify for assistance only when improvements are being made that exceed local code requirements.
- Commercial Reinvestment – For vacant or underutilized commercial buildings or big box stores of at least 10,000 square feet. Renovation costs must be a minimum 50% of current taxable value to quality.
- Master Planning – For larger mixed use developments of 15+ acres, projects that have an approved site plan and design guidelines may qualify for assistance.
- Urban housing – Support for multi-family units that address a need identified in the 2016 Housing Study, or future studies, and are located adjacent to established commercial areas may qualify for assistance
- Brownfield/Grayfield - Projects may qualify for assistance where vacant or significantly underutilized properties include remediation, demolition, or unique site prep costs
- Living Building, Well Building or LEED Certification - Projects achieving these certifications or standards may qualify for additional assistance based on unique development expenses incurred in order to achieve these standards. Proof of certification must be provided by a third party entity measuring compliance with the appropriate standard. Expenses only qualify for assistance when improvements exceed local code requirements. This is for non-housing projects only.
- New Services & Community Assets - Projects that bring a new service or asset to the community which are excluded by any of the prior criteria may receive support consideration per the adopted TIF policy.
- Single Tenant Retail Buildings are excluded from receiving assistance unless there are site specific challenges or disadvantages compared to greenfield sites.
Local Match - Projects that require a local match for leveraging other state and federal funding resources qualify for assistance.
Projects requesting City financial assistance will be subject to a financial analysis which determines if City financial assistance is necessary. The analysis will examine all financing sources for a project and the project costs, with scrutiny of the developer's return based largely on developer equity and the maximization of project debt. Analysis will focus specifically on cash on cash rate of return and debt coverage requirements for the private financing. This process allows consideration of public financing that fills a gap and precludes undue enrichment to the developer. Special consideration may be given to projects where the City is competing outside our MSA for businesses, projects supporting development plans for a specific geographic area, and businesses identified by the Council as high quality jobs.
Application for Financial Assistance - Marion IA.pdf (pdf version)
Application for Financial Assistance - Marion IA.docx(word version)
Proforma Template(similar developer provided project proforma is acceptable)
Evaluative tools expected to be submitted shall include a financial pro-forma highlighting the developer equity contribution, cash on cash rate of return, and the relationship between expected project cash flow and the debt coverage ratio required by the private lender for the project. Verification of the debt coverage ratio and lending terms required by the private lender shall be required. Based on the initial analysis, the city reserves the right to request other written evaluation reports, established benefit metrics, and other performance tools as may be used to evaluate the use of economic incentives from the early stages of project development through the issuance of an incentive and post incentive to make sure the objectives are met.
Developers who receive incentives will be required to enter into development agreements which delineate the terms, conditions, understandings, expected results and the performance measures required for receiving incentives. For up front financing security is required.
Questions or completed applications can be submitted here.
Type of Assistance
It will be the policy of the City of Marion to endeavor to assist Marion-based businesses with expansion and to attract, recruit, retain, foster and develop business that is new to our region or metropolitan statistical area (MSA) through the use of incentives. The City will not actively recruit business from other jurisdictions within our MSA unless a business is seeking to expand or a business is considering relocation outside the regional laborshed or the state. Should businesses from jurisdictions within our MSA wish to locate in Marion we will notify our neighboring jurisdiction of the interest per the terms of adopted Fair Play Agreements and Resolutions. It will be the general practice of the City of Marion to not provide economic incentives to businesses wishing to relocate from another jurisdiction within our MSA unless said business is seeking to expand or considering a relocation outside the regional laborshed or the state.
The use of TIF (tax increment financing) rebates shall be considered highly preferable to the alternative, "cash upfront" TIF. Cash-based incentives shall be considered only as a last resort if the financial analysis dictates that it is needed to make the project succeed and if it meets the goals of the Council's adopted plans for a TIF area. This type of assistance shall only be utilized for projects that exceed $2.75m in capital investment, unless this provision is waived by the City Council. This shall be considered the minimum threshold necessary to provide enough annual increment to justify the city seeking out financing means to provide a cash incentive. Additionally, cash incentives may only be awarded in the following order of preference:
- Direct loan repayable to the City of Marion as a residual receipts loan with full repayment by the developer at such time as sufficient equity exists in the project for the developer to refinance and repay the City in full;
- Direct loan repayable to the City of Marion as an interest-only loan with a balloon with full repayment by the developer at such time as sufficient equity exists in the project for the developer to refinance and repay the City in full;
- Forgivable loan based on achievement of milestones by the developer;
- Economic development incentive grant only available if required by a companion source of public funding for a project, such as assistance provided through the State of Iowa.
City Strategic Priorities
It shall be the policy of the City of Marion to use the City Council Adopted Strategic Plan, Comprehensive Plan, Urban Renewal Plans, market sector studies, and area-specific development plans as the framework for economic development activities. The Strategic Plan calls for specific support of the following economic development activities, accomplished by specific related action steps as follows:
Redevelop the Central Corridor into a Vibrant City Center
- Complete the next phase of the Central Corridor plan
- Design Uptown portion of Central Corridor project
- Develop a parking plan for Central Corridor
- Freshen-up Uptown Marion
- Enhance gateway/entryway beautification features/ signage
- Enhance facilities for recreation (city square park)
- Move forward with Library expansion project
- Expand the trail system
Improve Transportation System, Including Comprehensive Trail System
- Continue to move forward with Tower Terrace Road and Construct Major Transportation Corridors
- Expand the trail system
- Invest in the Marion Airport
- Improve Connectivity of Major Streets (Alburnett Road, Echo Hill, 44th Street, 35th Avenue)
Lead Planned Growth
- Enhance facilities for recreation (pools, gyms, library, performing arts center, etc.)
- Move Forward with Prospect Meadows
- Move Forward with Community Recreation Center (Functions & Fitness project)
- Complete branding project
Become Zero Waste and Energy Independent
- Convert Public Service Fleet to Compressed Natural Gas (CNG)
- Begin Eco Industrial Park Project
- Investigate Alternative Energies (ex. solar, wind)
Understanding Tax Increment Financing (TIF)
Tax Increment Financing is the most versatile and common form of financial assistance that is available to companies looking to expand or build a facility in our community. TIF is available to businesses that both qualify for the program and generate new property taxes through either new construction or substantial renovation of their current facility. New property taxes created through capital investment are rebated back to your company over an agreed upon period of time.
Assistance from Marion Economic Development
Upfront capital cost, particularly land acquisition, is a major hurdle for companies to clear. The land equity financing program limits up front acquisition cost when purchasing land in the Marion Enterprise Center. Other locations in the community may qualify for the program as well.
This program allows companies building a new facility to acquire a site and get a free & clear title to property while capitalizing their incentive program for the purposes of land acquisition. This land is then able to be leveraged to secure further private project financing. This tool is reserved for larger development projects, typically four acres in size or larger, and must first qualify for Tax Increment Financing support from the City of Marion.
Contact Us to learn more about the program and how we can expedite your project timeline and increase your equity while drastically reducing project cost.
Other Rebate & Loan Funds
Our utility partners, Alliant Energy and MidAmerican Energy, offer great rebate programs that offer significant savings for business owners. Follow the links below to learn more about the program and if your business or project qualify.
|MidAmerican Energy Rebates|
|Alliant Energy Rebates|
CIPCO Revolving Loan Fund
|The Central Iowa Power Cooperative (CIPCO) created the Community and Economic Development Revolving Loan Fund to improve the quality of life in our member cooperative rural areas by contributing to long-term improvement in the local economy. More information is available here.|
City of Marion and Marion Chamber of Commerce
The City of Marion and Marion Chamber of Commerce Revolving Loan Fund (RLF) was established in 2015 to provide assistance to small businesses, located within the City boundaries, looking to start-up and/or expand. The RLF will help support a diversified economy that includes small, locally owned businesses in retail, office, services, nonprofit, and food markets. Dollars are intended to complement other State and Federal economic loan programs.
Additional information and applications can be found here.
ECICOG Revolving Loan Fund
|The ECICOG RLF is a loan pool established by the East Central Iowa Council of Governments to assist new and existing businesses within our six county region develop and expand. Funds are used in conjunction with local lenders to serve as gap financing for proposals, in which the lender serves as the primary source of funding. More information is available here.|
Industrial Property Tax Exemption
Companies with qualifying new and expanded building investments in the City of Marion may qualify for the State of Iowa's industrial property tax exemption program. Actual value that is added to industrial real estate may be eligible for a partial exemption from real estate taxes graduated over a period of five years.