Officials explain $100,000 Catalyst grant

WILLIAMSBURG — Representatives of organizations and businesses from across the state — Fort Dodge, Davenport, Poweshiek County, Muscatine, Charles City, Bondurant, Wheatland, Keota, Osceola, Woodburn, Swisher, Monticello, Ames, Iowa City — gathered in Williamsburg last week to learn how to improve their economies with the help of $100,000 from the state.

Meeting in Williamsburg was a bonus for those interested in a $100,000 Catalyst grant; the City has received three, and the properties — including Grayson Jones’ renovation of the former Masonic Lodge building (featured in the Nov. 1 issue of the Marengo Pioneer Republican and Williamsburg Journal Tribune) — were open for inspection.

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The Catalyst grant has been around for about seven years, Jim Engle, director of the Iowa Downtown Resource Center, told his audience at Williamsburg Public Library Friday.

The Community Catalyst Building Remediation Program was created when communities not in the Main Street Iowa program — communities ineligible for the Main Street Iowa Challenge Grant — sought help for rehabilitating old buildings, said Engle.

“It’s been a terrific program for us.”

“We’re all about saving buildings,” said Engle. Out of 250 projects awarded Catalyst grants, only two were demolitions.

Williamsburg has won more catalyst grants than any Iowa town, said Engle. The money renovated the buildings that house Brickhouse Coffee Company on the square, 1890 Lofts at 104 W. State St. and the former Masonic Lodge building which houses Best of Iowa and Stellapolis Lofts on the southeast corner of the square.

Cascade also has been awarded three Catalyst grants.

Cities have to be the applicants for the Catalyst grants, said Jim Thompson, grant administrator. If the city isn’t on board, property owners won’t get the grant.

Williamsburg’s method for winning grants has worked for three years, said Thompson. The City asks for requests for proposal and selects the project that is most likely to score high on a grant application.

The projects must stimulate growth, said Thompson. That’s why the grant is called a catalyst grant. “We want it to be an example for another property owner,” Thompson said.

The projects don’t have to be in downtown areas, but so far they have been.

The buildings must be under-utilized or vacant, said Thompson. The goal is to add to the economy of towns with new businesses, not to help existing businesses. Other grants are available for that.

Catalyst has a million dollars to give away, and 40% of those funds have to go to towns of fewer than 1,500 people, said Thompson. Iowa Economic Development has never had trouble finding projects in those towns, he said.

The maximum grant for any project is $100,000. The grants shouldn’t fund more than 40% of the total cost of the project, Thompson said.

The city and the property owner have to provide financial resources as well.

“Don’t be afraid to ask for a grant if you’re a small town,” said Thompson. Larger cities often don’t ask for Catalyst grants. Des Moines chooses not to participate in the program, he said.

The $100,000 offered is not as important to a multimillion dollar project in a major metropolitan area as it is to a $250,000 project in a small town.

A city must fill out a pre-application for the grant. If project passes that process, the city will be invited to fill out an application.

Applications and pre-applications should include photos of the building and the area around it so Engle and Thompson can visualize the project and its economic impact as they score grant pre-applications and applications, they said.

Appropriate designs for the history, style and use of the building should be included. “We won’t let you do any harm,” Thompson said.

“We don’t want your windows boarded up,” said Thompson. The completed buildings should have proper facades — not residential vinyl siding — and proper storefront windows.

Make your application perfect, said Thompson. Scores from pre-application don’t transfer to the application process.

Applications should include good designs. Property owners don’t have to hire architects, but plans should be detailed.

“I would recommend anything you touch be in the design,” said Thompson.

Jones used BoxBrownie to make a drawing of what the former Masonic Lodge building would look like, said Thompson. The computer drawing looks like a photo, he said.

The finished building doesn’t look exactly like the graphic, but it’s close. “It’s a really good project,” said Thompson.

Applications with no plans for the building, with no photos or bad photos will not pass the application process, said Thompson. Neither will buildings in locations that won’t spur growth or properties in cities that won’t contribute to the project.

Because of the rise in costs after COVID, Catalyst suggests that cities add 25% to their estimates rather than the former standard of 10%.

“We’re encouraging you to elevate the contingency line on your budget,” said Thompson. Developers always find surprises when renovating old buildings, he said, and costs have increased substantially since 2020.

Sometimes IEDA receives applications with estimates so low they know the project can’t be completed for that amount. Those applications won’t make the cut, Thompson said.

Grant recipients have two years to complete their projects or they lose their grant money.

“I really push for … getting contractors to agree to prioritize [the catalyst project],” said Thompson.

One project awarded Catalyst money hadn’t started in the entire two years allowed for the grant. “If they haven’t started in two years, why would we allow them to continue?” Thompson asked.

Sometimes grant applications include a lot of information IEDA doesn’t need or want, and it’s repeated throughout the grant.

“Be succinct. Crisp. Don’t be redundant,” said Thompson.

IEDA doesn’t need a lesson on the history of retail in an application, said Thompson, though a history of the building is appropriate.

An application should tell IEDA when the building was constructed and for what purpose as well as how long it’s been vacant and what the future use will be.

Dyersville had a pajama factory that was vacant for 30 years, said Thompson.

The work stations were still intact. A couple wanted to put a brewery in the building. Their design paid homage to the original use of the building.

“When something like this happens, it grows your district,” said Thompson.

Stanton, a town of 678 people, didn’t think it could grow, said Thompson. But a Catalyst grant added a two-bedroom apartment on the second floor of a vacant building and retail space on the first floor.

A bank offered to finance another apartment in the building based on the cash flow from the retail business downstairs.

The town of fewer than 700 residents saw 12 new businesses in five years, Thompson said.

In Atkins, a town of 1,933 people, “the ugliest building in Iowa” became a catalyst for growth with the help of a Catalyst grant. The property owner removed the vinyl siding, put in large, storefront windows and replaced the gabled “roof from outer space” with an appropriate commercial roof.

The property changed from a nuisance residential property to a productive retail property.

A Catalyst application won’t be accepted if the city or developer provide nothing, said Thompson. But applicants can be creative in their partnerships.

Cities can provide tax increment financing or tax abatement, but giving the property owner free debris removal counts as well, Thompson said.

Catalyst is a reimbursement grant. For cash-flow purposes, owners can draw up to 60% of the grant money during the project, but the final 40% won’t be disbursed until the project is complete.

“The state of Iowa doesn’t have a relationship with the private building owner,” Thompson said. “Cities must have a development agreement in place before we can disburse any funds.”

The pre-application deadline for the next award is Jan. 30, 2025.

Pre-applications that score seven of 10 will be invited to apply by April 17, 2025. Grants will be awarded in June.

Applicants should check scoring criteria on the website iowaeda.com/downtown-resource-center/community-catalyst/ before applying to see if the project is likely to receive a grant, Thompson said.