City of Davenport, IA
11/22/2024 | Press release | Distributed by Public on 11/22/2024 08:49
Riverwatch Place Proposal: FAQs
(November 22, 2024) The proposed RiverWatch Place project involves the new construction of two commercial buildings: a Marriott Towneplace Suites hotel and a mixed-use, 4-story building with a restaurant, office space and top floor event center. The rough cost estimates are around $19 million for the hotel project and $11 million for the mixed-use building. It would be built on the triangle-shaped property located at 3rd and LeClaire Streets in downtown Davenport.
More coverage on the initial project proposal is available here.
Based on follow-up questions from the Davenport City Council, Bruce Berger, Community and Economic Development Director, provided a robust memo answering each in detail. The entire memo is available for download.
The following should be considered a high-level, executive summary of that memo.
1. What are occupancy rates of hotels in Davenport?
Davenport has 27 hotel properties with just over 2,400 rooms. Three of those hotels are in the downtown area, with 431 rooms.
Davenport hotel occupancy rates averaged around 55% over the past 3 years. (National average is 64%) Source: Visit Quad Cities
2. What are the office vacancy rates for Downtown Davenport?
There is no specific metric for office space vacancy in the Downtown. In general, office vacancies are trending higher in the Quad Cities market, as they are nationwide post-COVID. Source: NAI/Ruhl 2024 market report
However, of note for this project, the developer has expressed that there is already interest to fill the entire office square footage.
3. How much hotel/motel tax revenue for the City is expected if the project is built? What does that revenue typically pay for?
As written, the agreement would refund 75% of the City's portion for 10 years and 50% for five more years. Based on the developer's annual projections, the City would rebate roughly $3.6 million to the developer and retain $1.9 million in revenue from the hotel over the 15 year life of the agreement.
A development at this site would also generate $4.3 million in new property taxes ($1.5 million net). The City is currently receiving less than $3,000 annually from this property.
Hotel/Motel tax revenue adds to the funding of City properties and services including the RiverCenter and River's Edge and contributes to the Putnam Museum, Visit Quad Cities, CASI (Center for Active Seniors) and the Mississippi Valley Fair. In FY 2024, the City collected $3 million from Hotel/Motel taxes.
4. Have any other hotels received this sort of deal?
The Blackhawk Hotel redevelopment (2008) received an HMT rebate agreement over 20 years. The Current Hotel (2015) also has an HMT rebate for 18 years.
5. Is there enough parking for this development?
Per City zoning code, off-street parking requirements do not apply within the downtown zoning district. However, outside the downtown area, hotels are required to provide one off-street parking stall per hotel room. The proposed Marriott Towneplace Suites hotel is planning 82 rooms. The developer's plans reflect roughly 140 parking spaces.
5. What are the environmental issues at this site?
The concerns are partially related to environmental work in the 1980s that identified "coal tar" on the adjacent QC Times site. However, based on information provided by the Iowa Department of Natural Resources, data from this site shows only residual contamination. The developer's proposed plans involve bringing in two to three feet of clean fill to elevate the site as part of the floodplain mitigation, which could help with potential contamination.
The Iowa DNR encourages contaminated sites to be safely redeveloped and supported this project's application to State of Iowa's Redevelopment Tax Credit Program. The program provides funding to mitigate, clean-up, or otherwise help redevelop hard-to-develop sites which have real or perceived contamination.
The QC Times site was successfully and safely redeveloped with some oversight and mitigation of the environmental issues. From the Iowa DNR's standpoint, this site will be easier to redevelop than the QC Times building site.
More coverage on the initial project proposal is available here.
Based on follow-up questions from the Davenport City Council, Bruce Berger, Community and Economic Development Director, provided a robust memo answering each in detail. The entire memo is available for download.
The following should be considered a high-level, executive summary of that memo.
1. What are occupancy rates of hotels in Davenport?
Davenport has 27 hotel properties with just over 2,400 rooms. Three of those hotels are in the downtown area, with 431 rooms.
Davenport hotel occupancy rates averaged around 55% over the past 3 years. (National average is 64%) Source: Visit Quad Cities
2. What are the office vacancy rates for Downtown Davenport?
There is no specific metric for office space vacancy in the Downtown. In general, office vacancies are trending higher in the Quad Cities market, as they are nationwide post-COVID. Source: NAI/Ruhl 2024 market report
However, of note for this project, the developer has expressed that there is already interest to fill the entire office square footage.
3. How much hotel/motel tax revenue for the City is expected if the project is built? What does that revenue typically pay for?
As written, the agreement would refund 75% of the City's portion for 10 years and 50% for five more years. Based on the developer's annual projections, the City would rebate roughly $3.6 million to the developer and retain $1.9 million in revenue from the hotel over the 15 year life of the agreement.
A development at this site would also generate $4.3 million in new property taxes ($1.5 million net). The City is currently receiving less than $3,000 annually from this property.
Hotel/Motel tax revenue adds to the funding of City properties and services including the RiverCenter and River's Edge and contributes to the Putnam Museum, Visit Quad Cities, CASI (Center for Active Seniors) and the Mississippi Valley Fair. In FY 2024, the City collected $3 million from Hotel/Motel taxes.
4. Have any other hotels received this sort of deal?
The Blackhawk Hotel redevelopment (2008) received an HMT rebate agreement over 20 years. The Current Hotel (2015) also has an HMT rebate for 18 years.
5. Is there enough parking for this development?
Per City zoning code, off-street parking requirements do not apply within the downtown zoning district. However, outside the downtown area, hotels are required to provide one off-street parking stall per hotel room. The proposed Marriott Towneplace Suites hotel is planning 82 rooms. The developer's plans reflect roughly 140 parking spaces.
5. What are the environmental issues at this site?
The concerns are partially related to environmental work in the 1980s that identified "coal tar" on the adjacent QC Times site. However, based on information provided by the Iowa Department of Natural Resources, data from this site shows only residual contamination. The developer's proposed plans involve bringing in two to three feet of clean fill to elevate the site as part of the floodplain mitigation, which could help with potential contamination.
The Iowa DNR encourages contaminated sites to be safely redeveloped and supported this project's application to State of Iowa's Redevelopment Tax Credit Program. The program provides funding to mitigate, clean-up, or otherwise help redevelop hard-to-develop sites which have real or perceived contamination.
The QC Times site was successfully and safely redeveloped with some oversight and mitigation of the environmental issues. From the Iowa DNR's standpoint, this site will be easier to redevelop than the QC Times building site.