Council Meeting Date: October 28, 2013
Council Meeting Location: City Hall, 220 Clay St, Cedar Falls, IA 50613
FY2014 Goal Setting consumes the Committee meeting. I take a shallow dive on TIF incentives and feature the latest trail asset in our community.
- Committee of the Whole (5:30pm, Mayor's Conference Room)-
For the second consecutive meeting, the Committee of the Whole listens to director reports on department opportunities and challenges. The process is a precursor to the Council's annual goal setting session where we set major policy and funding priorities in November. This week we cover public safety (police & fire) and administration. I outlined some of the challenges relating to our taxation constraints in my last post including the 8.10 (which should soon become part of the city lexicon). See my October 14 post for more info. Staff is modeling a 3-5 year time-frame when we hit the 8.10 ceiling , the point at which the city has a crisis on its hands. There are many compounding factors from commercial rollback to collective bargaining bias, all real and all must be addressed. As usual, we also approve a mountain of bills and regular payroll during the committee meeting.
-Regular Council Meeting (7:00pm, Council Chamber)-
G.1.B) This item deals with the demolition of the old Vehicle Maintenance Building on Bluff Street (the old Public Works building). $28,335 brings the building down. The demolition is part of a larger project to remove or sell non-performing assets and shrink our overhead (building) footprint. Ultimately, we will likely re-purpose the old Public Works site for such functions as expanded recycling services.
G.2.G) 6525 Chancellor was constructed in 2001 as a purpose-built building for Principal Financial Group Companies by Ryan Companies. It has been vacant since July 2012 when Principal moved to a new Ryan Companies purpose-built building at 1100 Technology Parkway, another TIF site. Now, Veridian Credit Union is acquiring the 6225 property from Blue Sun Properties of Arkansas who acquired it through 'a deed in lieu of foreclosure'. There's a lot going on here. First, let me welcome Veridian to this exceptional building and location. The agenda item is simply a resolution stating that the City has no interest or lien on the building. I am interested in learning more about the TIF dynamic. Who benefited from the initial development agreement? Ryan? The real estate holding company successor? Principal? Is this an example of companies chasing incentives? In any event, the Principal relocation created a market distortion as evidenced by the foreclosure proceeding on 6525 Chancellor. Under normal circumstances, the value of this building would be significantly impaired and likely written down. Upon checking the Black Hawk Real Estate mapping service, it held its $6 million value through 2013, that's good news. Market demand returned, albeit most certainly at a discounted price which may impact its taxable value, which is why I assume the acquirer (Veridian) wants city assurance that it won't be party to the original development agreement that contained minimum assessment provisions. For the record, Veridian is not receiving any incentive for its move. The point of my ramble, we must be very mindful of market distortions caused by economic incentives, we don't want our incentives to lead to new buildings only to leave empty structures in their wake. It's a good thing Cedar Falls is an attractive place to do business even without an incentive. Welcome Veridian!
Admittedly, my brother, Jon, understands TIF issues nearly as well as I do, his comment is worth repeating: "Great to hear the old Principal building is getting a tenant. More likely than not, the bankruptcy and foreclosure process was by design. An investor probably bought the building from Ryan underwriting it such that the final exit would be with $0 residual value after accounting for debt. If I was a lender, one has to be ultra conservative in their underwriting when competing product will be TIF financed. As a matter of fact, this is an issue that goes beyond the industrial park as any existing commercial buildings, in or out of the TIF, competing for the same tenant is at a material disadvantage. On the bright side, TIF probably pushes down asset values across the community which could be beneficial to tenants but who wants to own assets when competing with the city. Note this issue can only be cured by the state."
Transparency Now - Did you know you have access to the same council materials as Council members and media? Go to cedarfalls.com -> Government -> Public Meetings. Click the desired meeting agenda. The agenda detail is hyper-linked to supporting documents (in the right panel). After the public meeting, the hyperlink also links to the televised discussion portion of the agenda item.
Enjoy the Ride - The Mayor's Pedestrian Bridge is finally complete, a ribbon cutting christened the opening on October 25. It was well attended and well presented. The history of the development intrigues me to this day. The steel-truss structure spans the Avenue of the Saints offering a beautiful and functional entry point to Cedar Falls. Along with the bridge, we commemorate a new tunnel under Greenhill. Soon, Viking Road will feature an underpass making it possible to travel from the northern most park, Big Woods Lake, to the southern most park, Prairie Lakes Park. This can be done in 8.5 miles just a single road crossing (verified by foot on yesterday). The bridge and tunnel mark the completion of a $2.9MM capital improvement project, 90% of which was funded by a federal grant. Let us not ignore the reason why the the funding was available... the 58 corridor was dangerous for vehicles, bicyclists, and pedestrians alike. Our city moves in more ways than by the automobile alone, we've embraced a recreational culture that undoubtedly contributes to our success. The Mayors' Bridge links the city's highest concentration of jobs with the city's highest concentration of residential housing. It is also confirmatory that road projects need to be designed with all users in mind - vehicles, bicyclists, and pedestrians. Enjoy the ride.