CEDAR RAPIDS — On a unanimous vote, the City Council agreed Tuesday night to negotiate with Penford Products Co. on its request to buy Riverside Park next door to its current site.
Penford, a corn wet-milling plant with about 225 local employees, announced in December that it wanted to buy the city park so it had room to attract a partner for a possible expansion into new products.
Cedar Rapids officials have a list of 17 terms that they want Penford to agree to as conditions of any sale. If the talks are productive, member Kris Gulick said, the council could vote next month on whether the transaction will go ahead.
Penford President and General Manager Tim Kortemeyer this week said he was “very positive” that the company and city will reach a “successful outcome” that will satisfy both parties.
The appraised value of the 11-acre park itself is $670,000. The council is asking Penford to pay $1.67 million for the park, along with pieces of A Street and 14th Avenue SW; replacement of amenities in the park; and repayment of grant money that the city has received to support the park.
Also Tuesday, Cedar Rapids’ largest-ever sale of new bond debt was a little smaller than expected because of interest rates “close to 40-year lows,” a bond consultant told the council.
The city had expected to sell almost $86 million worth of general obligation bond debt in four different batches, but instead the total came to $82.6 million thanks to interest rates that fell between 2.6 percent and 3.39 percent.
The largest of the bond sales, $57.9 million, will provide funds for the renovation of a downtown hotel and arena and the construction of an associated convention center and parking ramp. The debt will be paid back over 30 years at 3.39 percent interest — 1.36 percentage points lower than had been projected by consultant Jon Burmeister.
Three other packages of 20-year bonds will raise money for streets and other infrastructure projects; some flood-recovery costs on building projects; and a new parking ramp and street improvements for a Physicians’ Clinic of Iowa project. Revenue from increased property taxes resulting from the PCI development will pay off the PCI-related debt.