WATERLOO -- Two empty schools, a blighted former defense contractor, soon-to-be-vacant John Deere buildings and some bare east Waterloo ground itching for a home builder have all been given a leg up in attracting potential developers.

The five sites have been declared "enterprise zones" by the Waterloo City Council, making future developers eligible for large tax breaks and other incentives designed to encourage reuse of inner city assets over urban sprawl.

"We basically tried to focus the enterprise zone on where we thought the greatest possibility of people using them would be," said City Planner Noel Anderson.

Much of the city's east side, downtown and portions of the near-west side was declared and enterprise zone in 1998 when Iowa lawmakers created the program. Developers in that 3,330-acre area are eligible to receive property tax abatements, an income tax withholding credit for new jobs created, a sales tax refund on materials and services purchased for the new development, a corporate tax credit of up to 10 percent of the new investment and a research tax credit.

Anderson said the city asked the Iowa Department of Economic Development to include the five new areas late last month to beat a March 1 deadline on enterprise zone creation. The law allows a county to have up to 1 percent of its total area in such zones, which left the city with some 329 acres available, provided the land met poverty and blight guidelines established under the program.

Those five areas now waiting for enterprise zone approval include:

-- The 25-acre Chamberlain Manufacturing Corp. site at 550 Esther St., which currently sits just outside the existing zone. The former defense contractor closed in 1994.

The city has acquired the sprawling industrial complex earlier this year and has been seeking federal money to tear down some of the crumbling buildings and clean up environmental contamination on the land. City officials have had some interest from potential redevelopers of the property who could benefit from the incentives the enterprise zone allows.

-- Some 165 acres at the John Deere Westfield Avenue site downtown, which includes buildings the company will be vacating as part of a $125 million redevelopment project. The city and Waterloo Development Corp. are actively seeking funding to turn the buildings into the Cedar Valley TechWorks, which would be a research and incubator project for ag-related business ventures.

Anderson said the investment tax credits and income tax breaks for new jobs could be a great benefit for potential TechWorks tenants.

-- The former Lincoln Elementary School at Burton Avenue and Parker Street and the former Irving Elementary School at 728 Hawthorne St., both of which were abandoned when Waterloo Community Schools constructed new schools.

Anderson noted three other former Waterloo school buildings have been renovated into apartment complexes. The most recent school reuse project, the Roosevelt elderly apartment complex, received enterprise zone benefits to complete its renovation.

Jim Langstraat, executive director of administrative services, said the school district is expecting to accept bids by March 20 from individuals interested in purchasing old Lincoln. "We've had interest expressed from several (developers)," he said.

"Right now, the board is planning to hang onto the old Irving building," Langstraat said. The district may need to use Irving for classroom space as other buildings in the system are renovated.

-- Some 78 acres of privately owned land southwest of Newell and Idaho streets, just west of the City View Neighborhood.

"That is a nice big vacant piece of land on the north side of Waterloo," Anderson said. "If we can get a large-scale housing developer to come in, we want to give them as many incentives as possible.

"This area of town has not drawn the residential developers that southern Waterloo has experienced, potentially due to economic conditions of the surrounding area as evidenced by the statistics of this census tract," he added. "We need incentives to have a chance to try and draw development to this area."

While the city's original enterprise zone will be expiring within the next three years, the five new zones would have a 10-year lifespan. State lawmakers are also considering bills to continue the enterprise zone program.

Contact Tim Jamison at (319) 291-1577 or at tim.jamison@wcfcourier.com.