Council approves sale of $2.25 million in TIF bonds to acquire certified site property
By Kelly Terpstra, email@example.com
A new state-certified development site in Charles City will be recognized with a ceremony today.
On Monday, the Charles City Council approved a resolution so the city can issue $2.25 million in TIF (tax increment financing) bonds to fund the purchase of 75 acres of real estate for the Avenue of the Saints Development Park.
The city received five bids on the bonds. The best bid was by CUSB Bank in Charles City for a fixed interest rate of 3.19 percent over 11 years.
“We met all the objectives and the results came in slightly better than we were anticipating. Interest rates, as we all know, are certainly at historic levels. It’s a great time to invest in infrastructure,” said Paul Donna, underwriter and managing director of the investment bank Baird.
Once purchased, the city will grant the property over to the Charles City Area Development Corp. to market and hopefully sell the state-certified site to an industry to locate there.
“In the financial transaction they’re not directly involved,” said City Administrator Steve Diers about CCADC’s involvement with the purchase of the property. “They’ll be the owner of the property.”
The bonds will be repaid with incremental tax dollars generated from the South Grand Urban Renewal TIF District, where the land is located. Once the property was sold, that money would also be used to repay the city bonds.
“What we developed with Steve was, based on the market place, pay the bonds back within the projected revenue streams based on the existing tax base,” said Donna. “The district currently will generate about $667,000 in revenue annually” in TIF increment revenue.
The city will purchase the land from the current property owners, Steven and Diana Swartzrock and Rockland Enterprises LLC., at a purchase price of $28,500 per acre, or about $2.15 million.
“When they sell the property, that money will go to pay off what’s left on the loan and those kind of things. It’s not like we’re giving them this property and when they sell it for $2 million, they have $2 million in the bank,” said Mayor Dean Andrews about CCADC’s involvement with the financial transaction.
Closing on the purchase of the property will take place on Jan. 15.
The site certification ceremony takes place today (Tuesday) at 11 a.m. in the Zastrow Room of the Charles City Public Library. Iowa Lt. Gov. Adam Gregg and Debi Durham, director of the Iowa Economic Development Authority and the Iowa Finance Authority, are expected to attend.
Also at the council meeting Monday, the predesign agreement for the $3.3 million HMA (hot mix asphalt) project to resurface U.S. Highway 18 was approved. The construction will take place on U.S. 18 from Iowa 14/Gilbert Street, which includes 4th and 5th Avenue, to 850 feet east of the Cedar River Railroad and out to Superior Lumber.
“This is one we’ve been talking about for years and it’s finally starting to seem like it might happen,” said Andrews.
Additional minor improvements will be made to ADA curb ramps, sidewalks and at the intersections. New curb and gutter will be constructed between F Street and the Charley Western Bike Trail.
The project is a joint venture with the Iowa Department of Transportation (DOT) and the city. The estimated design cost is almost $157,000. The city would be responsible for $55,000 of that cost.
City Engineer John Fallis said the construction costs the city would have to pay would be around $550,000, or one-fifth of the project cost of about $2.75 million.
The city has secured $278,000 in SWAP funding and Fallis said the rest of the construction costs would be covered by the local option sales tax.
The state revised the agreement after the city decided it did not want to change 200th Avenue, from Gilbert Street to Clark Street, from four lanes to three. There was a proposal to create a left turning lane past the bridge heading north on 200th Avenue.
“Having that continuous left turn lane through an area where there’s no left turns – basically that means that nobody could use that lane. So basically you’re taking four lanes down to two lanes. Without having to go through that three-lane conversion, the hope would be to provide more space for more cars,” said Fallis.
Mayor Andrews also read a proclamation honoring the 100th anniversary of the passage of the 19th Amendment, which gave women in the United States the right to vote. The National 19th Amendment Society of Charles City was at the meeting, and the group has events planned for every month this year to recognize the centennial and the work done by Carrie Chapman Catt.
Catt, who grew up in Charles City, was the leader of the National American Women’s Suffrage Association and created the Winning Plan that finally gained the woman’s right to vote in 1920. Following the victory, Catt founded the League of Women Voters.
Andrews also appointed two new members to the Parks and Recreation Board. The council unanimously approved Adam Buseman and Dana Sullivan to replace Jim Smith and Ken Sheckler.