Iowa State University’s ongoing CYTown development is close to securing a $50,000-a-year lease and a $3 million security deposit with its first tenant.
Iowa State is asking the Iowa Board of Regents on Wednesday to authorize a 30-year lease with McFarland Clinic for 30,000 square feet of property between Jack Trice Stadium and Hilton Coliseum in Ames.
McFarland’s initial base rent of $50,000 will increase in $5,000 increments each year until the end of the lease. The medical company will pay for construction of its newest clinic on University Boulevard, although Iowa State will take over the property when it is finished and lease it to McFarland.
A new partnership for an ambitious project
The 40-acre CYTown development will include a collection of commercial, residential, office and medical facilities between the Iowa State Center and Jack Trice Stadium. The first phase of construction is already underwaywhich Iowa State hopes to complete by August 2025.
McFarland Clinic is the only company so far to pledge its commitment to CyTownrevealing last September its plan to build a 70,000- to 80,000-square-foot multilevel facility as the development’s anchor.
The terms of the McFarland-Iowa State lease were negotiated and agreed upon by both entities and are unique to that specific transaction, said ISU News Service Director Angie Hunt.
The university is not implementing a flat rate for its future tenants, which means each new deal will depend on negotiations.
“Financial terms for future leases with other tenants will be negotiated through the university’s development partner and will contain different financial terms dictated by the needs of each transaction and the overall objectives of the project,” Hunt said.
Due to the $5,000 per year increments, McFarland will pay Iowa State $200,000 in the final year of the contract. According to a agreement on the Board of Regents agendaMcFarland will have the option to extend its lease with Iowa State in five-year increments after the 30-year lease ends, up to an additional 20 years.
The clinic will also be responsible for the building’s utilities and “common area maintenance (CAM) fees” for the entire duration of the contract, according to the Board of Regents agenda.
More: Ames, Iowa state agree to funnel CYTown revenue toward Iowa State Center renovations, property tax undecided
McFarland aims to provide necessary and affordable services
The CYTown medical center will be McFarland’s seventh independent clinic in Ames. It will offer primary, specialized and urgent care.
The facility will be built at the southern end of the CYTown development, off Jack Trice Way, close to the football stadium. McFarland wants its newest facility to be easily accessible to patients in and around Ames.
The clinic will provide Iowa State student-athletes with access to orthopedic services and imaging equipment. It would also complement the ISU Thielen Student Health Center, located on the west side of central campus, by providing after-hours and weekend services.
More: Iowa State University Selects Developer for $200 Million CYTown Project
The State of Iowa May Be Allowed to Funnel Taxes into Iowa State Center Renovations
Iowa State is also asking the Board of Regents on Wednesday to allow the university to enter into a Memorandum of Understanding with the city of Ames. The agreement would establish a Payment in Lieu of Taxes (PILOT) agreement between the two entities.
O Memorandum of Understanding The agreement allows ISU Athletics to receive rent from CYTown tenants and allocate those funds to the buildings that make up the Iowa State Center: Hilton Coliseum, Stephen’s Auditorium, Fisher Theater and Scheman Building. The Ames City Council approved the MOU on Tuesday, May 14.
According to local officials, the city signed the agreement as an “innovative way” to finance improvements to the Iowa State Center. Whether the state of Iowa will pay property taxes on CYTown remains undetermined. Meanwhile, the Ames council chose to focus on its long-term goal of bringing people to the city.
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Celia Brocker is a government, crime, politics and education reporter for the Ames Tribune. She can be reached at CBrocker@gannett.com.
This article originally appeared in the Ames Tribune: How much will McFarland pay ISU to become CYTown’s first tenant?
