Ames could commit $42 million to The Linc as more details on hotel, apartments are released

Visitors to downtown Ames could be checking into a new hotel and enjoying a meal on a rooftop less than three years from now, according to the terms of a proposed agreement to develop a portion of Lincoln Way.

Also planned for Lincoln Way between Clark and Kellogg avenues are hundreds of apartments, some of which would be affordable for moderate-income households.

Future decisions by the city and developers Christensen Development and Hunziker & Associates include how many parking spaces would be in a public garage on the north side of the railroad tracks parallel to Gilchrist Street and whether there would be a pedestrian bridge connecting it to a private garage near the new hotel.

Those and other new details for the $150 million development known as The Linc were presented to the Ames City Council on Tuesday as city staff prepare preliminary terms of a development agreement that will be voted on Oct. 25. Also disclosed Tuesday was the city's planned financial commitment to the project — $42 million in tax increment financing over 20 years.

Ames City Manager Steve Schainker said the proposed financial assistance is the largest incentive the city has ever offered. Meanwhile, Dylan Kline, director of business development for the Ames Economic Development Commission, called the project a "once in a generation opportunity that will change the landscape of downtown."

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What would be built in The Linc in downtown Ames?

City staff and the development team have worked to refine details of a development agreement, which outline what's required to be built in exchange for financial assistance. Beyond approving the agreement, the council also will approve major site plans as they are nearing construction.

Construction is expected to occur in phases, with the first — on a boutique hotel and conference center — starting by Jan. 1, 2024 and finishing by Oct. 1, 2025, the agreement say. Guests would be able to book rooms by October 2025.

The hotel is expected have more than 100 rooms, a 15,000-square-foot conference center, a rooftop restaurant and a private parking garage with more than 400 parking spots.

The first phase also would include a mixed-use building on Kellogg Avenue with 14,400 square feet of retail space and up to 130 apartment units, and an open-air commercial plaza at the center of the development.

The agreement outlines a six-month extension to the completion date if each of the buildings are at 90% construction.

The Linc's second phase would include a residential building on Clark Avenue with up to 130 apartments that could also include ground-floor commercial space, plus an office and retail building that may also have apartments on its upper floors.

Construction on the second phase is expected to begin by June 1, 2026 and wrap up by July 1, 2028.

As part of the agreement, developers would ensure 10% of the apartments would be affordable to tenants earning 70% or less of the area median income. That means rent would be cheaper than market value but still more than what low-income households could afford.

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Rent that's affordable for low-income households is considered at 60% or less of the area median income, but there's no further tax increment financing available to subsidize rents to that level, according to information presented to the council. A single person earning $37,800 or a couple earning $43,200 would qualify at that level, according to 2021 data from the United States Department of Housing and Urban Development.

Chuck Winkleblack, of Hunziker & Associates, said Tuesday that he's encouraged by the level of interest from potential tenants of The Linc. If the project is approved, work on contracts with hoteliers would stretch into the first few months of next year, followed by six to eight months of design and engineering. He previously told the council the project, which would be beyond the scope of anything his company has done before, was slowed down due to the pandemic.

"Almost six years later, we're finally ready to talk about this," Winkleblack said.

How will Ames help pay for The Linc development?

Developers estimate the project would generate incremental taxes of up to $52.4 million over 20 years.

The agreement includes a $42 million tax increment financing rebate over 20 years. It would expire in 2045 or when the developers receive $42 million in rebates, whichever comes first.

Ames would use $10.2 million in TIF to construct a 200-space public parking garage north of the train tracks. The garage would be built so that it could be expanded in the future.

The City Council would still be involved in other decisions for The Linc, including an easement with a property north of Gilchrist Street that would be needed for a proposed pedestrian bridge to cross it — as well as permission from Union Pacific Corp. for the bridge to cross over its tracks.

If the council gives the go-ahead for the preliminary agreement at its next meeting, city staff would work with outside legal counsel to prepare a final development agreement. It would also need the council's approval.

The city expects the project would bring in up to $10 million in sales and hotel tax receipts over 20 years as part of a state-approved reinvestment district — crucial for the city to be able to afford the proposed $30.1 million Fitch Family Indoor Aquatic Center.

Phillip Sitter covers education for the Ames Tribune, including Iowa State University and PreK-12 schools in Ames and elsewhere in Story County. Phillip can be reached via email at psitter@gannett.com. He is on Twitter @pslifeisabeauty.

This article originally appeared on Ames Tribune: Downtown Ames development plans hotel, rooftop restaurant, apartments