After nearly 14 years of shaping downtown Iowa City’s economic development and maintenance, the Self-Supported Municipal Improvement District, or SSMID, a self-imposed tax district created by property owners in order to improve the area, will be considered for renewal and expansion to cover more areas in the county for another decade.
Following a Nov. 18 formal meeting held by the Iowa City City Council, the council unanimously passed the initial ordinance to reestablish the Iowa City Downtown SSMID.
The renewal has yet to be adopted as the second consideration will take place during the city council’s Dec. 12 formal meeting, with the final approval and adoption is set for their Jan. 6, 2026 formal meeting. The term will last from July 1, 2026, to June 30, 2036.
If approved, the boundaries of the new district will stretch across downtown Iowa City, to Northside Marketplace, and portions of Riverfront Crossings, which is an expansion from the current boundaries, Rachel Kilburg Varley, Iowa City economic development coordinator, said.
Boundaries imposed in 2016 — and still in place today — include only certain portions of downtown Iowa City. Some businesses that are within the SSMID include Midwest One Bank, Crepes DeLuxe Cafe, and businesses in the Old Capitol Mall.
“With the expanded boundaries, the SSMID will be able to serve more of the businesses that are just outside their boundaries right now, kind of expanding their reach,” she said.
The renewal will continue to ensure “investment in downtown Iowa City’s economic development, cleanliness, safety, and community programming,” according to the Iowa City Downtown District.
According to the ordinance, property owners petitioned to renew the SSMID district in September. As required by state law, the petition was signed by at least 25 percent of property owners, whose combined properties are assessed at 25 percent of the total property value within the district.
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The tax is charged to property owners, not directly to individual businesses; however, many businesses pay a portion of it indirectly through higher rent when landlords pass the cost along in their lease agreements.
Varley said the current term raised the levy from $2.00 per $1,000 taxable value for the first five years of authorization to $2.50 per $1,000 taxable value for the last five years of the term.
The levy rate for the upcoming term will sit at $2.50, but could eventually be raised to $2.75 with board approval for the last three years of the 10 year term.
“Hopefully [business owners] see through the downtown district’s efforts, the value in the tax that they’re paying,” Varley said. “They get that back through events that bring foot traffic downtown, and people spending money.”
Director of Downtown Iowa City Betsy Potter said the current term ends on June 30, 2026. She added that initially, there was a four-year term on the SSMID, which was renewed for 10 years, and they are looking to renew for another 10 years.
“We thought it was a good term limit, so that we can be in existence for a good amount of time,” Potter said. “But also that if we want to change anything with the levy rate or with the boundaries, more specifically, that we can do that in 10 years from now.”
Clara Reynen, a UI graduate student and candidate in the 2025 Iowa City City Council election, said while running for and being involved in local government, she realized how little residents understand how things like an SSMID work.
Reynen said while she was running her campaign, she heard Iowa City residents ask for an easy way to access information. Making things like the SSMID more accessible to the general community would be beneficial, she said.
“Renew the SSMID, but if there was a glossary section on the city’s website where folks could go to learn about SSMID, I think that would be really useful,” Reynen said.
Karen Kubby, owner of Beadology, a business that lies within the SSMID renewal boundary, and former Iowa City city councilor, said she is very excited to be on the expanded map.
“The SSMID legislation makes sure that not just small property owners can control this process and not just large property owners, but we have to collaborate together to get to that 25 percent of signatures that represent that value and the unique owners,” she said during public comment at the Nov. 18 city council meeting.