City Council Minutes October 5, 2010: Special Session

Minutes
North Liberty City Council
October 5, 2010
Special Session

Call to order.  At 7:00 p.m., Mayor Salm called to order the October 5, 2010 Special Session of the North Liberty City Council.  Council members present: Chipman, Donahue, Hoffman, Kuhl, and Wayson; absent – Hoffman.

Others present:  Ryan Heiar, Scott Peterson, Tracey Mulcahey, Dean Wheatley, Erika Harper and other interested citizens.

Approval of the Agenda.  Chipman moved, Kuhl seconded to approve the agenda. The vote was: ayes –Wayson, Donahue, Chipman, Kuhl; nays – none; absent – Hoffman.

Economic Development Project.  Mayor Salm presented the ground rules for the meeting.   

Presentation of proposed economic development project.  
City Administrator Heiar presented the proposed project with a series of slides and a “Frequently Asked Questions” document.  

City Council Comments.
Councilor Chipman thanked all for coming and offered regrets for not having meeting sooner. As the project was first discussed, her two concerns were property taxes for North Liberty citizens and the impact on the Capital Improvements Plan for the City.  

Councilor Chipman read Councilor Hoffman’s statement into the record regarding the proposed project and the process.  Hoffman will be abstaining from council votes if he takes position with the Credit Union.

Public Discussion.
Casey Cook, 1580 Mall Drive, Iowa City, from Cook Appraisals spoke regarding the appraisal received by the City.  He is a commercial real estate appraiser brought in by the Concerned Taxpayers of North Liberty to critique the appraisal from MRS Appraisals.  After offering his credentials, he offered a report on commercial land availability and commercial sales in North Liberty.  He stated that the appraisal is flawed in the methodology for determining the appraised value of the land.  His opinion is that the property is not worth $4.00 to $5.00 per square foot as commercial, but probably is as multifamily residential. He stated that the project will diminish other commercial property owners’ values.  The Council had a discussion with Mr. Cook about his comments.  

Mike Pugh, 1 S. Gilbert Street, Iowa City, an attorney representing the Concerned Taxpayers of North Liberty spoke regarding the process of the land acquisition.  He strongly urged the Council to have the revised rezoning, updated Comprehensive Plan, and updated Urban Renewal Plan all in place before the sale occurs.

Steve Gordon, 605 Grandview Court, Iowa City, developer in North Liberty spoke about due diligence on the property acquisition.  Gordon asked about the gap financing, the extension of the purchase agreement, and earnest money.  Gordon requested a more structured projection of job creation. The Council discussed Mr. Gordon’s comments with him.

Jason Dumont, a North Liberty property owner, talked about the proposed interest rate. Dumont presented a table of summary of average rates since 1994.  The Council discussed the rate with him.

Aimee Pitlick, 1625 330th Street NW, Oxford, asked about the term of the loan. She spoke regarding PPEL and property taxes received from the property.  Heiar reported that the property currently pays approximately $1,700 per year in property taxes. After the minimum assessment begins at $5,000,000, the property will pay $66,000 to the CCA School District for PPEL and debt service. Pitlick reported that backfilling of TIF by the state will only cover a small portion of the TIF lost. Council discussed funds coming in as a result of this building to the CCA district.  

Dave Sidwell a real estate broker presented information to the council to review on property sales in Liberty’s Gate.   

Chris Eden, 2004 Wedgewood, Coralville, indicated that several council members have met with him prior to this meeting.  He reported that nothing is more “green” than RM-21 residential development.  He asked about the marketing plan for the property.

Karen Fesler, 1524 Forest Road, owns a business located here since 1981. She asked what would happen if the Credit Union would do the project on their own.  She asked about competition with other developments and payment of debt with property tax receipts. She expressed her concern with NLADC’s involvement in the process. She asked Council to take into account that they are leaving this legacy for future councils.

Tom Streb, Liberty Doors/LD Express, has been in North Liberty for 47 years.  He stated that the city’s property taxes are way out of line. Streb offered to sell his 70 acres for $11 million.  Mayor Salm clarified that the City was not “shopping” for property, rather the Credit Union was.

Tracy Barkalow, 1725 Parkway, Coralville, stated that he owns 25% of the development company from whom the property is being purchased.  He expressed concerns about the selection of this property, contract negotiation issues, and the commission on the sale of the property. Mr. Barkalow indicated that he is taking legal action regarding this property. The Council discussed the zoning and taxation of the property.

Mayor Salm asked if anyone thinks this will spur any other development in the community.  

Mike Bails, 1580 Ironwood, North Liberty, is a Lepic Kroeger realtor.  He expressed concern over the values of the land based on Mr. Cook’s analysis that the property is only worth about half of the appraised value.  

Council discussed the appraisal. Council discussed ethics and licensing.  City Attorney Peterson stated that if there are verifiable ethical concerns, the City should be made aware.
Mayor Salm offered summary of concerns:
•    Appraisal
•    Comprehensive Plan
•    TIF funding gap
•    Loan interest rate
•    What’s the hurry?
•    School and TIF
•    RM-21 zoning
•    Commercial property availability
•    Certainty of job creation. Is that a realistic number and what time frame?

Don Strabala, 125 Highway 965, North Liberty, stated that the City needs to stay out of commercial development and incentives.

Mayor Salm indicated that the Credit Union has been clear that they will not come to North Liberty if we do not we do know that they will not come here if we don’t offer this. He indicated that staff will be compiling information for Council for consideration.

City Council Comments.
Councilor Wayson encouraged all to remember that City Council lives in North Liberty and pays taxes the same as everyone else. He believes this will be helpful for the growth of North Liberty. He encouraged people to be involved in all issues to help make good decisions.

Councilor Donahue thanked everyone for being here and taking an interest in matters. He asked the audience if they think that no incentives should be offered to draw business to the community.  He requested a check in with NLADC. He stated that not using TIF for incentives will affect development of this community in the future.

Councilor Kuhl stated that Council looks to future in a responsible manner. He asked to revisit the interest rate issue and issue about amending the comprehensive plan and other issues in the next two to four weeks.

Councilor Chipman asked on whose authority we have that the UICCU would be coming here regardless of incentives.  She countered that they will located where the best offer is.

Mayor Salm reiterated that the eight items brought up tonight will be addressed prior to moving forward.

Adjourn.  At 9:45 p.m., Donahue moved, Kuhl seconded to adjourn. All ayes. Meeting adjourned.