County continues to ponder certified site land purchase

By Bob Steenson, bsteenson@charlescitypress.com

Floyd County and Charles City officials and others continue to discuss which group should front the money to purchase land likely destined to become a state-certified industrial development site — or if the land should be purchased at all at this stage.

County supervisors raised the question again at their workshop meeting Monday morning, with Charles City City Administrator Steve Diers, Mayor Dean Andrews and Realtor Connie Parson on hand to offer input.

It is possible a decision on county involvement will be made at the supervisors’ next regular meeting, on Tuesday, May 28.

The property in question is 75.3 acres on the northeast corner of the intersection of South Grand Avenue and U.S. Highway 218 (the Avenue of the Saints). A three-year option to purchase has been agreed to with 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.

Supervisor Roy Schwickerath, who is also a member of the SW Bypass TIF District Board, said he originally voted in favor of that board recommending that the county purchase the property using general obligation bonds, with those bonds being repaid through TIF funds and through the sale of the property to a private company when that occurs.

But, he said, recent discussions have caused him to rethink that recommendation.

He said the Charles City Area Development Corp. could finish getting the site state-certified — a designation that makes a property more attractive to potential industrial buyers because the site is “shovel ready” for development — and market the property during the three-year option to buy period.

But Parson, who has donated her time to negotiate the purchase, said the intent all along when negotiating with the Swartzrocks was that the land would be purchased soon.

The primary reason that the three-year option was agreed to is because that is what is required by the state for the site to be certified if it isn’t owned by a public body, she said.

“The intent was never to run the clock out on the option,” Parson said. “We have a three-year option merely to put in the application for certification.

“I would bet against the Swartzrocks letting us run out the clock,” she said.

Schwickerath said the option to buy is a legal contract giving the CCADC three years, but Parson said a lawyer could argue that the intent of the negotiations was for a more immediate sale.

The land is located in the South Grand TIF District, but that district produces much less annual tax revenue, or “increment,” than the SW Bypass TIF District, which contains the Southwest Development Park and its major industries such as Cambrex, Zoetis and MITAS/Trelleborg.

One proposal would be to amend the TIF districts so the certified site land becomes part of SW Bypass TIF District to take advantage of the higher increment to repay the purchase price.

City Administrator Diers said a rough estimate is that the SW Bypass TIF district could repay $2.3 million in bonds in about 11 years without any increase in property taxes.

It’s possible to repay the bonds using the South Grand TIF District increment, but it would take a lot longer and result in more interest costs, Diers said.

The South Grand TIF District is managed solely by the city, whereas the SW Bypass TIF District is a joint city-county entity.

Diers suggested that if a decision is made to purchase the property using the South Grand TIF revenue, that the county still consider being the body to issue the general obligation bonds, since the county’s debt limit and bonding capacity are so much larger than the city’s.

Schwickerath said the length of the term of the bond repayment shouldn’t be a concern if, as Parson and others have said, the development property will be one of the premier development sites in the state and will likely be sold within a few years.

The bonds can be paid off early if the land is sold, he said.

The Monday Board of Supervisors meeting was a workshop meeting, so no official county action could be taken.

Supervisors Doug Kamm and Linda Tjaden indicated they may be ready to make a decision on county involvement at the next regular meeting, May 28.

Also at Monday’s meeting:

• Kamm, the board chairman, asked Assistant County Attorney Randy Tilton to draw up a draft ordinance regulating ATV and UTV use on county roads, for the board to begin discussing. He suggested Tilton use the Cerro Gordo County ordinance as a starting point.

• Lisa Morin of Marble Rock asked if the county could provide direction on her acquiring adjoining property that she said has an abandoned house on it that is in severe disrepair and is a hazard.

It was suggested she work through Marble Rock’s nuisance ordinance, or work with the county to acquire it through a tax deed.

• Heard an update on the county law enforcement center and courthouse updates project. Supervisor Tjaden said the designer for the project will be leaving Prochaska & Associates, the architectural firm the county is working with, but he finished the schematic drawings.

She said the construction manager, The Samuels Group, is working on getting figures together for the cost to relocate the emergency dispatch center from its current location in the Charles City City Hall, to the new LEC.

Tjaden said the construction manager is also looking for guidance on projects that can be worked on in the courthouse this winter if weather prevents working on the LEC part of the project.