City Council buys Emerald Knights block for new fire station

CEDAR RAPIDS - The City Council on Tuesday agreed to purchase a block of property between First and Second avenues SE and Seventh and Eighth streets SE for the home of the city's new Central Fire Station.

The total purchase price is $3.23 million. Joe O'Hern, the city's flood recovery and reinvestment director, told the council that the Federal Emergency Management Agency will pay the amount from disaster funds provided to the city to replace the city's former, flood-damaged station at 222 Third St. NW.

The owners of the parcels in the block paid a total of $1.52 million for the property in 2006, according to the City Assessor's Office.

In a Gazette story in July, Cedar Rapids City Assessor Scott Labus and Johnson County Assessor Bill Greazel said the purchase price of property often goes up when government decides it needs it.

City Council member Pat Shey on Tuesday asked O'Hern to explain why it made sense for the city and FEMA to agree to pay $3.23 million for the property when the purchase price in 2006 was significantly less as is the valuation placed on the property by the City Assessor's Office for tax purposes.

O'Hern said the city initially offered the property owners a sum closer to the assessor's valuation - which was $1.37 million in 2010 before some recent demolition on part of the property - and the property owners countered with their own offers. O'Hern said the owners were able to justify their price as “reasonable,” and he said the price has been approved by FEMA.

After Tuesday's meeting, Mayor Ron Corbett noted that FEMA will not pay to purchase property if a jurisdiction has seized it via an eminent domain process in an effort to arrive at a purchase price.

The city expects FEMA disaster funds and a $5 million state I-JOBS grant to pay most, if not all, of the cost for the new Central Fire Station which should open in 2013.

Two subsidiaries of St. Martin's Land Co. own most of the block - referred to as the Emerald Knights' block because the Emerald Knights Drum and Bugle Corps once was housed in a portion of it. The subsidiaries will be paid $2.52 million for their property. The other owner, Bob's Wholesale Cars Inc., will receive $709,000.

St. Martin Land Co. was created in 1905 by a small group of investors from Linn and Cedar counties to buy land in Louisiana. About 200 investors, most of whom are descendants of the original investors, are now involved in the land company, a company official has said.