A two-year search for financing recently paid off

A two-year search for financing recently paid off for Terry Stamper, developer of the Peninsula Neighborhood in Iowa City.

Stamper and his partners received a $2.25 million loan from a Kansas bank to move forward with the first phase. The lender, however, required a quicker payback to compensate for a perceived higher risk of New Urbanism. Instead of the usual 55 to 60 percent of revenues going to the bank to pay back the loan, 85 percent will be directed there, Stamper says.

That means the equity investors in the project will pay operating expenses until the loan is paid off in about eight months, he explains. After that, all of the revenues from home and lot sales will come “free and clear” of debt obligations. The perceived higher risk is due to lack of experience with New Urbanism in Iowa, Stamper explains. “Banks say ‘yeah, it looks good, but what happens if you drop out?’ There’s no other new urbanist developer within 500 miles, and no available builders to take over.”

Demand is pent-up for much of the 86-unit first phase – a variety of single homes, townhouses, live/work units, duplexes, and apartments, Stamper says. Customers placed reservations on 40 homes, but half of those were lost because of delays last summer. Now Stamper is trying to get some of the lost reservations back. “I have a certain number of easy deals – say 20 or 30.

After that we will be fighting for sales just like everybody else.” To generate demand for future homes, Stamper wants to get a couple of blocks of good urbanism built in the next six months. The 380-unit project was planned by Dover Kohl & Partners, with detailed planning by Geoffrey Ferrell Associates.