Wed. Nov 27th, 2024

The University of Iowa will move ahead with purchasing the Old Capitol Town Center after seeking approval from the Iowa Board of Regents. (Photo courtesy of University of Iowa)

The University of Iowa plans to move ahead with the purchase of a mall in the central part of campus with approval from the Iowa Board of Regents, looking to expand its offices and services already in the building and keep retail spaces open.

The board property and facilities committee recommended approval for the university to purchase the remaining stakes of the Old Capitol Town Center in Iowa City. The full board will consider the proposal at its Nov. 6 meeting after hearing from UI officials.

The university currently owns a 55% stake in the building for administration and student services offices, according to the property purchase document, and rents additional spaces as well. Services include UI Campus Safety, Student Disability Services, International Programs, the Office of Student Financial Aid and others.

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The building was constructed in 1980 and the UI began acquiring portions of it in 2006, coming to its current ownership in 2009, said David Kieft, UI senior director of university business and real estate business services. The university ended up using its locations in the mall to relocate programs and offices during the 2008 flood, including its school of music, memorial union, bookstore, as well as other student and event spaces.

When those original purchases were made, Kieft said they included an option for the UI to buy the remaining percentage of the building, as long as the university notified the mall’s ownership group of its intent to purchase by Oct. 1 and closed the transaction within one year.

Kieft said university officials worked with the ownership group this summer to develop a purchase agreement, which extends the close-by date to Oct. 1, 2027.

Regent David Barker congratulated the university on the project and its patience in developing long-term plans for the space.

“I think this is a great thing to do, and really consistent with the long-term interests of the university,” Barker said.

Parts of the Old Capitol Town Center not already owned by the UI come with a $20.6 million price tag. The university would pay 10% with university reserve funds if the board approves, Kieft said. The rest of the funds would be paid using a commercial loan in October 2027, when the UI is expected to take ownership of the building.

This purchase is less about the short- or long-term needs of the university, Kieft said in the meeting, and more about having control of the significant space – almost two city blocks – in the heart of the UI campus.

“Over the past 18 years of joint control with the local ownership group, the university has developed a deep, close relationship in connection with the ownership and management team,” Kieft said. “Our joint interests have aligned to the benefit of the owners, the university, the city and the Iowa City Downtown District … the last thing the university wants to see is the management and remaining ownership pass to outside investors.”

Once ownership has transferred, the university will hold all of the commercial leases for the building and will be in charge of handling existing leases and approving new ones after October 2027.

The UI plans to keep retail spaces open, according to the document, and Kieft said there are no plans to make immediate changes to the building once the university owns it. Renovations and updates will be planned as funding becomes available, he said.

Kieft said the university is having internal discussions as well as conversations with the city about its intent to keep the mall’s commercial spaces on the city’s tax roll in some way, whether that be through payments in lieu of taxes or other means.

“It is imperative that this building, this center, remain an important, vibrant part of the community and the university,” Kieft said.

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