Demolition work continues at the site for the new Cedar Rapids Convention Complex Tuesday, Aug. 30, 2011 in Cedar Rapids. (Brian Ray/ SourceMedia Group News)

CEDAR RAPIDS — Cultural, arts and educational organizations that rely on a piece of the annual revenue from the city’s hotel/motel tax should rest easy, Mayor Ron Corbett says.

Corbett on Tuesday said the city intends to continue to fund organizations now receiving money even as changes are made to the program. The city plans to set aside some of the hotel/motel tax revenue to help pay off debt for its hotel and convention center projects.

The mayor noted that the city managed to hang on to its long-held, top AAA bond rating before this month’s sale of bond debt. However, he said the city needs to make sure it keeps its top bond rating in the future.

The 7-percent hotel-motel tax, which in the last couple of years has brought in about $2.5 million a year, will be bringing in more revenue each year once the Convention Complex and hotel opens in 2013, Corbett promised.

He said the City Council will announce hotel/motel funding awards for community organizations in June, and said he anticipated the size of the individual awards would be similar to the three-year average. He said the intent was to “hold harmless” the recipients now receiving funds as the program changes.

Corbett said an additional $70,000 will go to the Cedar Rapids Area Convention and Visitors Bureau, which as the largest recipient receives about $700,000 a year, to help the bureau lure conventions to the Convention Complex.

Organizations that currently receive revenue from the hotel/motel tax will now have to apply for awards covering a three-year period. That way they won’t have to reapply each year, they will know how much they will receive, and can plan their budgets accordingly, Corbett said.

Recipients, including such entities as the Cedar Rapids Museum of Art and the Indian Creek Nature Center, are now in the process of submitting applications to the new, three-year program, the mayor said.

The program also will not take applications from entities not currently receiving funds without special approval from the City Council.

“It’s one of those things where you have all these horses in the stable and there’s barely enough hay to feed them, so why open the door and try to invite a bunch more horses in,” Corbett said. “We’re just going to try to take care of the existing beneficiaries to the best that we can.”

About half of the city’s current hotel-motel revenue now goes for commitments unrelated to cultural, arts and educational organizations, which the City Council agreed to fund at its meeting last night.

Of the $1.258 million in spending approved last night for the fiscal year beginning July 1, $300,000 will help pay for the operation of the Paramount Theatre and the city’s ice arena; $250,000 will go to Convention Complex debt payments; and $277,009 will go for debt payments on the ice arena. Smaller amounts will pay for debt for the Cedar Rapids Museum of Art, the Paramount Theatre and The History Center. Another $120,000 will go for the city’s annual contribution to Priority One, now a part of the Cedar Rapids Metro Economic Alliance.

In addition, $25,000 will go to operations at the city’s Ushers Ferry Historic Village and $3,500 to maintain the Tree of Five Seasons and memorials.

Knutson Metal Co. at 533 H St. SW. (image via Cedar Rapids GIS)

Not many cities with ambitious plans for a riverfront feature a scrap yard hidden by a thicket of trees and underbrush across the river from the downtown.

Cedar Rapids does.

Eight months ago, the City Council here asked City Manager Jeff Pomeranz to enter into negotiations with Thomas Knutson to purchase his salvage yard, Knutson Metals Co. at 525 and 533 H St. SW, which sits between the city’s attractive, 15-year-old police station and the Cedar River.

At the time, City Council member Justin Shields called Knutson’s business “an eyesore,” a characterization that Pomeranz embraced in April when he submitted an application to The Hall-Perrine Foundation seeking up to $700,000 to help pay for the purchase of Knutson’s business.

“The property is a blight to the neighborhood and a drag on redevelopment,” Pomeranz states in the city’s application for foundation funding. “Every day this property detracts from the value and quality of our city as residents drive to work, use our trails and look out their office windows.”

The Knutson property is immediately next to the city’s new riverfront amphitheater, now under construction, and is in the way of a planned trail that connects the amphitheater to additional park space related to the amphitheater, called Festival Park, near Eighth Avenue SW.

This month, The Hall-Perrine Foundation — which has provided funding help for a variety of City Hall projects in recent years, including the riverfront amphitheater, the Convention Complex, the library and the city’s purchase of the former Sinclair meatpacking plant — turned down the city’s request to help fund the purchase of the Knutson property.

“The decision in no way implies any adverse judgment as to the worthiness of the project,” Jack Evans, foundation president, says in a letter to Pomeranz denying the city’s request for funds.

The City Assessor’s Office currently values Knutson’s two-story building at 525 H St. SW at $98,891 and the vacant property next door at 533 H St. SW at $38,006. Knutson operates his salvage business in the building’s basement and has leased out a portion of the upstairs to a haunted house during the Halloween season. Water reached high into the building — which was in “poor condition” at the time, according to the City Assessor’s Office — during the flood of 2008.

Knutson spends little time at the property, though he has had his employees in recent weeks ship off most of the scrap metal that had been piled up around the outside of the building. Employees this week said the cleanup is an answer to the city’s public comments that the property is an “eyesore.”

Mayor Ron Corbett on Tuesday said the city thought it was close to a purchase agreement with Knutson, but the mayor said negotiations continue over the purchase price. Attempts to reach Knutson have not been successful.

The $700,000 that the city had sought from The Hall-Perrine Foundation was only part of the cost it thought it might have to pay for the property, Pomeranz’s letter to the foundation suggests.

Corbett said Knutson wants the city to include in the purchase price an amount of money to move the salvage yard to a new location or to compensate him if he has to go out of business as a result of the purchase.

Corbett said he prefers to negotiate a sale price, but he added that the city may have to use its power of eminent domain to acquire the salvage yard.

The city condemned the Knutson properties and six others in the mid-1990s as part of the police station construction project. Back then, the city and owners of some properties went to the local Compensation Commission to establish a fair sale price, and the city then pushed on to the Linn County District Court in some instances when it thought the commission sale price was too high. In the end, the city decided not to buy the two Knutson addresses, 525 and 533 H St. SW, because of price.

The city and Linn County own the other property between the riverfront amphitheater and Eighth Avenue SW along H Street SW except the Knutson addresses. On one of the government-owned properties is the Mott Building, which Corbett noted is expected to remain in place. The mayor said he has seen plans to convert it into a residential property.

Corbett said a historical analysis of the Knutson building, built around 1900, will take place as the city decides if it should be reused or demolished once the city acquires it.

“We need this property from a community standpoint,” the mayor said. “We have to be fair and give someone the fair-market value of their property. … So we’re going back and forth on what is the value of the business and what kind of profit does he make.”

The trees that in season help hide the Knutson property from view along the river are not particularly attractive either, Daniel Gibbins, the city’s parks superintendent, acknowledged on Tuesday.

After a city purchase, Gibbins said the city would prune or remove “deficient” trees to improve the riverfront appearance and open up the view. At the same time, the city would plant new trees to fill in voids with additional undesirable trees removed as the new trees grow, he said.

City council member Pat Shey, Four Oaks public information officer Liz Mathis and Four Oaks CEO Jim Ernst watch as the TotalChild Inititative is launched with the demolition of 1415 Bever Ave, a property that has seen 182 documented police calls in the last 24 months, on Thursday. The program is broadly aimed at addressing key risk factors in a child's life to improve neighborhoods and communities. (Justin Torner/Freelance)

Four Oaks and its Affordable Housing Network Inc. subsidiary on Monday said they have 55 residential properties under their control as part of the TotalChild Wellington Heights Initiative announced last week.

Jim Ernst, president and CEO of Four Oaks, said AHNI now owns 32 properties in the Wellington Heights neighborhood, including three vacant lots. The number was an increase over the 25 announced Thursday. One of the new properties is the 12-unit Rose Apartments at 1407 Third Ave. SE, Ernst said.

The organization also will take over management of another 23 rental properties owned by Tim Terry of Iowa City, officials said.

Terry, founder of accounting firm Terry Lockridge & Dunn and financial services firm World Trend Financial, lived in Wellington Heights for about 20 years until 1997. During that time, he said, he bought the 23 properties as a landlord in his own effort to prevent the neighborhood’s housing stock from deteriorating.

In recent months, Terry has been helping as AHNI quietly purchased properties in an 18-block section of the neighborhood. The idea is to upgrade rental housing and convert some of it to owner-occupied homes, while changing the perception that Wellington Heights can be a less-than-desirable place to live.

Ernst, Terry, AHNI Executive Director Joe Lock and Terry Bilsland, president of the Wellington Heights Neighborhood Association, met with The Gazette Editorial Board on Monday to talk about the initiative and the inclusion of Terry’s properties.

As a Wellington Heights landlord, Lock said, AHNI will follow the same practices it uses in more than 500 rental units it already owns or manages throughout the city. Requirements include satisfactory credit checks, background checks and previous rental checks for residents.

Though that process means some current tenants won’t qualify and will have to look elsewhere to live, Ernst said, Four Oaks and AHNI concluded that their focus was on improving Wellington Heights. It is the city’s job to oversee landlords, tenants and rental properties citywide, he said.

Terry said officials could improve rental properties by simply enforcing Cedar Rapids’ existing ordinances. In purchasing and renovating residential properties over the years, he said, it was common to find the rental properties he was buying in “egregious” violation of city code.

Ernst said AHNI is funding the purchases with some money left from its participation in the Block by Block neighborhood revitalization program in flood-hit areas on the city’s west side. That money came from both private donations and flood-recovery government aid. Four Oaks and AHNI also will be seeking additional private and public funding support, he said.

Republicans call for spending cuts by the federal government, while opposing tax increases on wealthier Americans. Democrats support such revenue-increasing taxes, while opposing spending cuts.

“The federal government is using debt to pay for operating expenses in a lot of cases,” said Cedar Rapids City Council member Kris Gulick, an accountant and business consultant and current president of the Iowa League of Cities. “That would be like us going out to borrow money for the Police Department to operate. That’s a bad business practice, but that’s what the federal government is doing.

“And it hurts (the city of Cedar Rapids) from a perception standpoint. The perception is that all debt is bad.”

In Iowa, cities must balance their annual budgets, and little or none of the borrowing they do pays for the operation of government.

Instead, municipal debt helps cities invest in streets, bridges, water and sewage plants and other capital improvement projects, plus economic-development incentives and big-ticket equipment purchases like firetrucks.

Cedar Rapids reaches new debt high

Cedar Rapids took on more new debt this month in one day of bond sales than any time in its history — $82 million in general-obligation bond debt and another $6 million from revenue bonds, to be paid back with fees from water users.

Much of the debt — about $60 million — is tied to renovation of the city-owned downtown hotel, the city’s share of costs for the $85 million convention complex and a city parking ramp going up across the street. The hotel and convention complex are contentious subjects for some.

The bond sale also put a dent in the city’s armor — its top Aaa bond rating, which has protected the city with low interest rates for some 40 straight years. The city’s rating is still Aaa, but Moody’s Investors Service added a “negative outlook” — a caveat tied to the unknowns of the hotel and convention complex, slated to open in a year.

Mayor Ron Corbett acknowledges the new debt taken on by the city is more than and different from usual. He said it is understandable and manageable, though, as the city continues to recover from the 2008 flood and after the city was forced to buy downtown’s only hotel from creditors to save it.

“It’s kind of like a snake eating a big rat,” he said. “At first there’s a bulge in the body of the snake, but eventually, it works its way through. That’s where we are.”

Progress for future comes at a price

Mike Van Milligan, city manager in Dubuque, said that city has had its critics, too, when it comes to debt. He keeps close at hand a 60-page PowerPoint presentation that helped him this spring respond to doubters and persuade his City Council to nearly double outstanding debt to $239 million.

In comparison, Cedar Rapids — which is more than twice as big as Dubuque, with a property valuation more than double Dubuque’s — estimates its total outstanding debt will be about $420 million on June 30, 2012, up from $370 million a year ago.

Dubuque has been adding to city debt for a flood protection system, sewage treatment plant, industrial park, airport terminal, transit facility with parking ramp, another downtown parking ramp and more. Nearly all of it will be paid off with user fees, not property taxes.

In Cedar Rapids, revenue from the downtown hotel and parking ramp, as well as the incremental increase in property taxes in the city’s medical district, will pay off much of the new debt.

Van Milligan, who has been city manager in Dubuque for 19 years, said his city and Cedar Rapids are “two of the shining stars” among cities in the Midwest. “I’m tremendously impressed with your recovery activities from that unbelievably devastating flood,” he said.

Likewise, city leaders in Cedar Rapids have pointed to Dubuque as a place to model because it has seen a rebirth like few others in the state.

Change doesn’t come on its own, and it doesn’t come free, said Van Milligan.

“Progress has a price,” he said, “but I think stagnation has a greater price.”

When a city stagnates, he said, the costs of running a city are spread across a shrinking tax base, which can send a city’s employers looking elsewhere to invest. Children and grandchildren grow up and leave because there aren’t any jobs left.

“So, therefore, you start bringing down that strong family that we’re so proud of here in the state of Iowa,” he said. “So I think there’s a greater price to stagnation, but there is no doubt that progress has a price. And, yes, it does include issuing debt to be able to afford the major projects that need to happen to progress.”

Still, cities should exercise caution

Brian Richman offers a caution, though. He’s a former financial adviser for cities and other public entities, mostly in California, and now a lecturer and director of the Hawkinson Institute of Business Finance at the University of Iowa’s Henry B. Tippie College of Business.

Cities, he said, are no different from people when it comes to debt. Some are reasonable and responsible, others more speculative. By speculative, he said, he means communities that have invested in what can be reasonable-sounding economic development projects that come with the hope of increasing a city’s opportunities and tax base.

“You pick up the newspaper here, and you don’t have to read very long to see that there are governments in Iowa that tend to take on riskier projects,” said Richman, not specifying any one government.

“Economic development projects — whether it’s a hotel or a convention center or a stadium or an industrial park, whatever — are inherently more speculative and therefore somewhat more risky than what are called essential services — water, sewer, roads, schools,” he adds.

Take, for example, Coralville, whose bond rating dropped in April because of underperformance at the city-owned Coralville Marriott Hotel and Conference Center and because of the city’s overall debt.

Where the line is between safety and speculation, Richman said, is hard to know.

“Those are really policy decisions,” Richman said. “How much debt is a particular city comfortable with? And more importantly, what is the vision for the city? What is the citizenry’s vision? What is the City Council’s vision? What do they want the city to be? And when you know where you want to be, how do you get there and how do you pay for it? Then the question is, how much can you actually afford?”

Richman points to the Iowa State Treasurer’s website, which shows public debt in Iowa is up 6.6 percent in the past year and up in nearly every category — city, county, community college, school district — over the past five years.

He said the trend could mean good growth in those local communities, so government has needed to provide more services, but it also could show how local jurisdictions have turned to borrowing to fill gaps in their budgets. A city that used to buy police cars each year with annual revenues, for instance, may now borrow to buy them, he said.

He adds that cities also have pension and related obligations, which are an additional kind of debt.

A look at the financial reports of some of Iowa’s largest cities shows that debt is on the rise. For the fiscal year that ended June 30, 2011, overall outstanding debt for Des Moines rose 10.3 percent; Davenport, 13.5 percent; Dubuque, 43.2 percent; and Sioux City, 16.6 percent.

In Cedar Rapids, the total outstanding debt (this does not include the recent bond sale or the payment on debt over the past year) increased by 3.2 percent, while Iowa City’s debt rose 1.4 percent and Waterloo’s dropped by 1.2 percent.

Postponing expenditures can’t be done forever

Kevin O’Malley, the finance director for Iowa City, said one argument for taking on debt and paying it off over time is that people who benefit by what is built — improvements in Iowa City to a water or wastewater system, for instance — are the ones who are paying for it over 20 or 25 years.

By contrast, a city could try to save money before construction, but people contributing may die or move before the project begins, he said.

O’Malley said cities like Iowa City — which also has a top Aaa bond rating — are being asked to take on debt in ways they haven’t in the past. He cites as examples two downtown development projects in which developers have proposed Iowa City take on debt to front money for the construction.

The city, he said, prefers the developer take on the debt, build the project and pay property taxes, and a portion of the taxes then are returned to the developer for a time to help pay off the developer’s debt.

“When you get into upfront money, to me it’s higher risk,” O’Malley said.

He said developers argue that banks won’t lend them money, so they want the city to do so. “So we have to ask questions like a banker,” he said.

Cedar Rapids changed its form of government in 2006 to a city manager and a part-time City Council. Council member Gulick, who joined the council that year, remembers that the council and then city manager, Jim Prosser, agreed Cedar Rapids had deferred infrastructure improvements for years and needed to change that.

Putting off improvements, he adds, came with an upside. When the flood of 2008 hit, the city had built up sizable cash reserves, which helped the city front some disaster-program costs while waiting for reimbursement from the federal government.

Gulick said the city’s large bond sale this month is unusual, but Cedar Rapids is taking on debt for a number of post-flood building projects for which the federal and state governments are paying much of the cost. He is confident that the city can manage the debt.

In its recent analysis of Cedar Rapids’ finances, Moody’s Investors Service credited the city with financial flexibility. The city is assisted in its effort to manage debt and balance its budget by new fees — about $3 million a year in tickets from traffic cameras, another $500,000 or so paid by those who have vehicles towed after arrests and $3.4 million from a 1 percent franchise fee on electric and gas use in the city.

Making investments to benefit city’s future

Former city manager Prosser, who left in early 2010, was a proponent of revenue flexibility. As he constantly said, “Cities are forever.” City Council member Monica Vernon frequently repeats the forever refrain.

Council members, Vernon said, have to make investments that will benefit the community for years to come.

“You got to have these glasses that get you out 20 and 30 years, because we’re bonding for things for a long time — 10, 20 and 30 years,” Vernon said.

“… Cedar Rapids has been sitting here on the banks of the Cedar River since the 1840s, and it’s not going anywhere,” she said, “and in the 2040s, which is essentially what we’re moving toward right now, Cedar Rapids will be here. And we want to ensure that it will be successful, progressive and a good place to live, work and play.”

Dubuque’s Van Milligan said a city that is unwilling to take on debt is like a person who decides not to take out a home mortgage. The person might save up a little at a time and finally have enough for a home by age 60, but the person would have lived most of life in something else.

“I think just having a policy of not taking on any debt is inviting mediocrity and stagnation,” he said.

The UI’s Richman agrees that today’s policymakers have an obligation to provide future generations with a quality of life that they are providing to current generations.

“And in order to do that, your finances need to be sound,” he said.

So which is it? Should city leaders intent on positioning a city for the future take on debt to update and refresh, or should a city also make sure it doesn’t take on too much debt?

“I suppose the answer to that question might differ for different people,” Richman said. “For me, it’s the latter.”

Vernon said she was raised to dislike debt. As a homeowner, she said, the goal is to get rid of the mortgage, for example.

“And when you look at the size of the debt of even a well-run city like Cedar Rapids, out of context, it can be frightening,” she said. “For someone paying off a home mortgage and then to look at (city) debt in the millions, that’s scary, but it’s the collective investment we’ve made in the future of our community.”

Money in the form of many large bills (Sourcemedia Group)

Liz Mathis speaks to a crowd in the Wellington Heights neighborhood announcing the TotalChild program Thursday afternoon. (Justin Torner/Freelance)

CEDAR RAPIDS — Over a hundred people watched Thursday evening as an excavator took a giant bite out of a boarded-up 12-plex apartment building in Wellington Heights.

Police and neighborhood leaders said the building had come to symbolize the worst in a neighborhood tired of crime, bad behavior and bad landlords.

Acting Police Chief Tom Jonker told the crowd that police officers had been called to the 12-plex at 1415 Bever Ave. SE on 182 occasions in two years for drug busts, assaults, fights, drunkenness and more. Demolishing the 12-plex would not cure all the neighborhood’s problems, but it was a start, Jonker said.

The 12-plex is one of 24 properties that the Four Oaks children and family services’ subsidiary, the Affordable Housing Network Inc. or AHNI, quietly has purchased in an 18-block area in the last six months as part of what the organizations are calling the TotalChild Wellington Heights Initiative. Most of the properties, some single-family, some multifamily, will be renovated with the goal of turning many of the single-family homes that had been rental properties into homeownership opportunities for low and moderate income families. More properties will be bought and another group of rental properties in the target area likely will be managed by AHNI.

The effort’s bedrock belief is that children — including the children for whom Four Oaks work provides services — need good housing and a safe neighborhood just like they need family and good schools. Four Oaks’ TotalChild program is designed to stand by children in the programs in all parts of their lives until they are 18.

“This building were taking down today housed some of the worst struggling neighborhood issues in Wellington Heights and in this community — high poverty, high crime, lots of helplessness. It’s certainly not a place for kids to grow up,” Jim Ernst, president/CEO of Four Oaks, told last night’s crowd.

Ernst said Wellington Heights’ neighborhood leaders have made it clear in supporting Four Oaks and AHNI’s neighborhood-transformation initiative that residents in the neighborhood want neighbors who obey the law, who are good neighbors and who take care of their property.

In purchasing 24 properties in the 18-block piece of Wellington Heights with plans to purchase more, AHNI is the new landlord in the neighborhood and a landlord that is going to be a good landlord for children, families and the neighborhood, Ernst promised.

“Today, we are saying to landlords, you cannot provide poor quality housing for children who live here,” he said. “You can’t ignore the background checks for your tenants. This cannot just be about economics. It’s the future of our children, it’s the future of this neighborhood, and we all have to do a better job.”

Terry Bilsland, president of the Wellington Heights Neighborhood Association, told the crowd that he’s heard a lot of talk, ideas and plans over the years for his neighborhood. Now there is action, he said.

City Council member Pat Shey, whose council district includes the Wellington Heights Neighborhood, said City Hall stood behind the TotalChild Wellington Heights Initiative 100 percent and he promised City Hall would do its part to make the neighborhood a better one.

“I’m here to let you all know that as a city we will redouble our efforts to hold landlords accountable in this neighborhood,” Shey said. “We will continue to enforce the current city codes and make sure all the landlords adhere to the letter and spirit of the law.”

In the crowd was Dale Todd, a homeowner in the neighborhood, a former president of the Wellington Heights Neighborhood Association and a former City Council member, who said the issues of the neighborhood are “incredibly complex.”

“That’s why the city councils in the past have not been able to deal with this effectively,” Todd said. “It’s a start. I commend them for it. But now comes the hard work.”

Angie Shultz, another neighborhood homeowner and neighborhood association board member, said demolishing the 12-plex at 1415 Bever Ave. SE was an important step for the neighborhood.

“Just having this down will make a difference for the safety of our neighborhood and our children,” Shultz said. “There was much drug activity and thing going on here, and everybody was aware of it. It’s just going to be really good for our neighborhood.”

Chad Simmons, executive director of Diversity Focus, said last night that transforming a neighborhood like Wellington Heights is not like checkers but more like the more-complicated challenge of chess. Diversity Focus is working with Four Oaks and AHNI in an alliance to improve housing and other opportunities for African-Americans in the community.

The Wellington Heights Initiative’s 18-block focus comes in an area with a sizable African-American presence, and Simmons said some African-Americans could be forced out of the neighborhood as AHNI takes over properties and makes more demands of its tenants. The “upside” and Diversity Focus’ interest is to increase homeownership opportunities here for the neighborhood and for African Americans in it, he said.

Four Oaks’ Ernst has a target of increasing homeownership from the current 49 percent on these blocks to 63 percent.

“This is an opportunity to empower people,” Simmons said. “There also is the risk of reducing diversity within the area. Unfortunately, you have to deal with both sides.”

Liz Mathis speaks to a crowd in the Wellington Heights neighborhood announcing the TotalChild program Thursday afternoon with Terry Bilsand, president of the Wellington Heights Neighborhood Association, acting chief of police, Tom Jonker and city council member Pat Shey behind her in attendance. The program is broadly aimed at addressing key risk factors in a child's life to improve neighborhoods and communities. (Justin Torner/Freelance)

The CEMAR Trail was suggested 10 years ago by then-Cedar Rapids Streets Commissioner Don Thomas, but it’s never been completed. A month ago, that fact helped prompt the Cedar Rapids-dominated planning organization — which controls about $4 million a year in federal funds — to decide to use 80 percent of that money on trails and bike lanes rather than street projects.

On Thursday, the group unanimously voted to commit $2.5 million of its discretionary funds in fiscal 2016 to complete the 2.8-mile stretch.

The trail will connect Cedar Rapids’ heavily used Cedar River Trail at Cedar Lake to Marion. It will run along an old railroad line through older sections of northeast Cedar Rapids, then under First Avenue East at about 31st Street Drive SE and on to Marion.

The Cedar Rapids portion of the trail is being built in three segments. The middle section, from 20th to 29th streets NE, was built in 2010.

The first section, from the Cedar River Trail at Cedar Lake to 20th Street NE, has been slowed because of problems purchasing a trail easement through the former Terex Cedarapids industrial site at 909 17th St. NE. Progress is being made on that complication, city engineer and public works Director Dave Elgin said Thursday.

The third section is complicated by the need to get under, over or around First Avenue East, though the preferred plan is to go under, added Rob Davis, the city’s engineering operations manager.

Elgin said the city already has the money for some of the first segment; the $2.5 million from the planning group will pay for the rest and will fund the third segment as well. Davis estimated that the first segment will be completed in one or two years, and the third piece will follow.

At the city limits, the paved CEMAR trail will come close to crushed limestone trail segments in Marion, officials there told the planning organization.

Samantha Dahlby, a Cedar Rapids member of the planning group, said the funding commitment fit the organization’s decision-making criteria because it connects to the backbone of the metro trail system, the Cedar River Trail, and because it connects two member cities. Elgin said the group’s 2040 transportation plan named the CEMAR Trail as the top funding priority.

Monica Vernon, a Cedar Rapids City Council member and the chairwoman of the planning group, called the CEMAR Trail “one of the longest-running, talked-about trails we’ve had around here.”

Also at the top of the organization’s priority list for trails is the need to provide $1.3 million to fix the existing Cedar River Trail, which has some sections that are now 15 years old.

A boarded-up apartment building at 1415 Bever Avenue SE on Tuesday, May 15, 2012, in southeast Cedar Rapids, Iowa. (Jim Slosiarek/The Gazette-KCRG)

It’s Wellington Heights’ turn — especially for the children who live there.

This old core neighborhood in southeast Cedar Rapids has combated a perception problem for more than 15 years as being a place where bad behavior surfaces and police cars converge.

Terry Bilsland, the president of the well-established Wellington Heights Neighborhood Association and a 44-year resident of the neighborhood, has protested for years that his neighborhood is much better than the stigma attached to it.

But Bilsland this week said even he was surprised after the flood of 2008 with how few flood victims in need of replacement homes came looking for a new life on high ground in Wellington Heights.

“When the flood happened, we had some real good houses over here for sale, but we didn’t hardly attract any flood people,” he said. “There’s something wrong when that happens, when you have good housing and they don’t even come and look.”

Perceptions and neighborhoods don’t change on their own, but they can change with some attention, affection and thoughtful, targeted investment, said Jim Ernst, CEO of the non-profit Four Oaks children and family services agency with the Affordable Housing Network Inc. as one of its subsidiaries.

Thursday afternoon, Ernst, Bilsland and others will stand in front of an emptied, boarded-up 12-plex jammed into the Wellington Heights neighborhood at 1415 Bever Ave. SE to announce an ambitious housing and neighborhood-transformation initiative for an 18-block piece of the neighborhood between Washington and Sixth avenues and between 14th and 19th streets SE.

It’s called the TotalChild Wellington Heights Initiative, founded on the bedrock belief that the quality of housing and of a neighborhood matter to the formation of a child just as the quality of the family and the child’s school do.

“It’s really important to me to help people understand that making the neighborhood stronger is not just a matter of the houses,” said Ernst. “And one of my fears in all this …is that this is just a housing-recovery project and not a project for kids and families to be more successful.”

Quietly since November, Affordable Housing has been buying up distressed properties in the 18-block area, and now has 25 in its possession with plans to buy more. It also intends to manage other properties in the target area and it anticipates that some new homes eventually will be built there.

Most of the homes acquired by Affordable Housing will be renovated with the intent to convert many of them from rentals to owner-occupied homes through a rent-to-own program being used elsewhere in the city. The program, for those with household incomes at 80 percent or below of the area’s average median income, sets aside a piece of the monthly rent for a future down payment on a mortgage while the renters take classes on topics related to homeownership and managing finances.

This week, Affordable Housing was finishing renovation on a single-family home at 1439 Bever Ave. SE as the agency sorts through applicants to move in. Across the street, the agency also was renovating a large corner house with apartments in it.

Joe Lock, Affordable Housing executive director,  explained that tenants in the homes now owned by the agency and ones it may manage will need to reapply and meet the agency’s tenant standards. Those standards are the same ones Affordable Housing uses at its other affordable housing properties and include credit and criminal background checks. Some tenants will have to move on as a result, he said.

Affordabley Housing’s approach as landlord in the neighborhood is a welcome sight for Bilsland and for many on the City Council who have been talking for some years and continue to talk about how to hold bad landlords and bad tenants accountable.

“We feel this is the only way to get some of these bad rental properties under control and under the control of somebody who cares what goes on in them,” said Bilsland.

Joe Lock. executive director of Affordable Housing Network Inc. surveys a house in the 1400 block of Bever Avenue SE in Cedar Rapids that will soon be ready for occupancy . (Jim Slosiarek/The Gazette)

Four Oaks’ Ernst said Affordable Housing has been working with neighborhood leaders, city officials, the Police Department and others for more than six months to refine the goals of the agency’s Total Child Wellington Heights Initiative. Along the way, the organization has worked to identify the most distressed properties in the 18-block area and the ones to which police most frequently are called. Affordable Housing now owns seven of the top 10 and 15 of the top 30 on the police-call list, Ernst said.

Both the neighborhood association and the Police Department also were asked to name the single property that most needed to change, and both said without blinking, the 12-plex at 1415 Bever Ave. SE.

Today’s news conference at 5 p.m. out front will feature heavy equipment to bring down the building, which Ernst said has operated as something of a low-budget motel in the middle a densely packed block of homes.

“When we bought this, I think we showed the neighborhood association and the Police Department that we were serious,” he said.

He said the 12-plex and the first of the other properties that Affordable Housing has purchased were owned by landlords that were operating in “despicable” fashion, renting out places that had holes in floors and walls and mold and water in basements.

In fact, Ernst said that Affordable Housing paid too high a price for the rundown 12-plex, but gave in to the previous owner’s argument that the property was valuable. Ernst estimated that the previous owner was bringing in $500 a month in rent for each unit with no questions asked of tenants and little of the money going back into the property for upkeep.

“In his mind it was a valuable property, so we had to pay more. He was right,” Ernst said.

Overall in Wellington Heights, which is bounded by 10th Street SE, 19th Street SE, Second Avenue SE and Mount Vernon Road SE, close to 70 percent of the homes are owner-occupied ones, while the percent is about 49 percent in the 18-block area in which Affordable Housing is focusing. The hope is to raise that figure to 63 percent over time by purchasing homes, renovating them and getting them into the hands of new owners.

Ernst’s Four Oaks children and family services agency came to the rescue of the community’s affordable-housing effort when the MidAmerica Housing Partnership failed in 2007. Ernst’s organization stepped into the crisis for one simple reason: The children and families working with his agency lived in some of those apartments and homes.

The same is true now: Some of his agency’s clients live in Wellington Heights, and to help them requires helping the neighborhood, too, Ernst said.

Last July, Four Oaks launched a pilot project called TotalChild, and made a commitment to 300 children in its programs to work with them until they reach the age of 18. The agency plans to add another 300 children to the program.

Three years ago, armed with large private donations, support from the state of Iowa and the help of volunteers, Four Oaks’ Affordable Housing played a central role in the flood-hit neighborhoods in northwest and southwest Cedar Rapids as a partner in the Block by Block program along with Matthew 25 organization and, initially, the United Methodist Church. Block by Block has worked to renovate some 300 homes on 25 blocks there, along the way buying about 45 homes to renovate and sell. Affordable Housing has now ended its participation, using proceeds from the sale of houses there it to help finance the Total Child Wellington Heights Initiative.

“We believe Wellington Heights was left behind,” Ernst said. “Not for any reason. The city was devoted to flood recovery, and Wellington Heights wasn’t flooded. But over the last five years, Wellington hasn’t progressed as it should as a neighborhood.”

Victor Jacobs of Cedar Rapids installs a faucet in the bathroom of a house being renovated in the 1400 block of Bever Avenue SE in Cedar Rapids. (Jim Slosiarek/The Gazette)

Mark Wyatt (from left), Gina Weaver and Nikki Davidson ride down 42nd Street NE at the start of a six-mile group ride near Twin Pines Golf Course in May 2009. (Jeff Raasch/The Gazette)

A persistent City Hall has been trying for nearly three years to secure a status as a bicycle-friendly community from the League of American Bicyclists.

On Monday, Cedar Rapids officials announced that the League has awarded the city the bronze-level designation in a rating system that runs from platinum to gold and silver and bronze.

In 2009, the city was given honorable mention status.

In Iowa, Cedar Falls, Iowa City and Des Moines previously secured a bronze rating. Boulder, Colo., Davis, Calif., and Portland, Ore., hold the top platinum rating with about 200 communities nationwide holding one of the four ratings. The ratings are based on five “Es”: engineering, education, encouragement, enforcement and evaluation and planning.

Mayor Ron Corbett announced on Monday that he will ride his bicycle to work on Thursday to celebrate the city’s newly won bicycle-friendly certification and to note that it is national Bike-to-Work Week.

In recent years, the city has added markings on certain streets and has adopted a complete-streets program in which it attempts to address bicycle use as it considers how to improve streets.

The metro area’s transportation planning agency, the Corridor Metropolitan Planning Organization, in recent weeks said it would commit most of an annual pot of between $3 million to $4 million in locally distributed federal funds to trails and bike lanes on streets. Cedar Rapids city officials, which hold a majority of seats on the MPO, pushed the change.

Bruce "Tra" Paige III, 4, hams it up on the runway during the Juneteenth Summer Fashion Splash & African Dance Production on Friday evening, June 17, 2011, at the African American Museum of Iowa in Cedar Rapids. (Dan Williamson/Freelance)

Four local organizations are joining forces to see if their alliance can improve neighborhoods and the housing in them and provide job-preparation opportunities for African-American youth.

The organizations are Diversity Focus, the Regional Economic Development Institute or RED-I, the Four Oaks children and family-services agency and Four Oaks’ Affordable Housing Network Inc.

RED-I, the newest of the groups, is the creation of local African-American business professionals.

“The members of this alliance are taking a holistic approach to assist in the economic development in the African-American community (here),” says Karl Cassell, a member of the RED-I board and executive director of the city’s Civil Rights Commission.

The alliance members say they are committed to the idea that diversity and inclusion are critical to a strong and successful community.

“It is important to realize that this alliance provides expertise in the areas of housing, family, employment, economic development and community,” says Jim Ernst, president/CEO at Four Oaks. “We firmly believe that to achieve the level of success we all aspire to, each of these areas needs to be strengthened.”

Look for a variety of initiatives from the alliance in upcoming weeks, the members promise.

The City Council this week approved adding the final group of flood-hit properties to the program, which is funded with federal Community Development Block Grant money. The additions bring the number of buyout properties to about 1,350, flood recovery and reinvestment Director Joe O’Hern said Wednesday. Between 100 and 150 of the sites are commercial and the rest residential, he said.

He anticipated that some of this last group of properties may not qualify for the buyout program for various reasons, including not having sustained enough damage in the Floods of 2008.

Among the properties in the final group is the Intermec Technologies Corp. building at 550 Second St. SE, which the City Assessor’s Office values at $2.48 million. Intermec is moving into a new building, now under construction, at 601 Third St. SE.

Also on the list is the home of Affordable Plumbing and Remodeling, 816 First Ave. NW, which is owned by City Council member Don Karr and his family. Karr is retired from the operation of the business, which is run by a daughter and son, he said Wednesday.

Karr said he hasn’t decided whether he’s going to stay in the buyout program, but he suspected that others, like him, only put their properties on the buyout list after voters on March 6 rejected the extension of the city’s local-option sales tax. Revenue from the tax extension would have helped build west-side flood protection, and without it, Karr said he’s not sure his building will retain its value.

Also in the last group of 111 properties are two owned by King’s Material Inc., 620 and 650 12th Ave. SW, valued by the City Assessor’s Office at $1.7 million. Two churches, Redemption Missionary Baptist, 1510 Second St. SW, and Word of Faith Pentecostal Church, 716 Eighth Ave. SW, also are on the list.

Five construction firms submitted bids to build a six-story, 460-space parking ramp and skywalk across from a city-owned hotel, arena and convention center. The City Council this week learned that the lowest of the bids is $12.278 million, $778,000 higher than expected.

The council had hoped that the base costs would be low enough to allow for extras to be added to the ramp, including a seventh floor offering 75 more parking spaces, additional first-floor retail spaces on the First Avenue SE side, and nicer exterior siding on the Second Avenue SE side. However, low bidder Knutson Construction Services of Iowa City said the extra ramp floor alone would cost $1.372 million — another $478,000 more than the estimate.

Sandy Pumphrey, the city’s building facilities capital project manager, said he and the project’s design team are researching why the bids came in significantly higher than anticipated. Chuck Swore, chairman of the council’s Infrastructure Committee, said officials may be able to find places to reduce costs without rejecting the bids, redesigning the project and seeking new submissions.

“From a scheduling standpoint, there would be no benefit to that at all,” he said.

The city’s goal is to have the ramp in place by the time the hotel and Convention Complex open in 2013.

Swore said he would like the city to include the full build-out of retail space on the first floor of the First Avenue side of the ramp, which would cost $665,000 in the Knutson bid. Swore said the retail spaces would attract hotel and Convention Complex patrons and generate revenue for those city-owned facilities.

However, council colleague Scott Olson has questioned whether the city should be competing with privately owned first-floor space elsewhere in the downtown.

The city also is in the design phase of a second parking ramp to be built in the 600 block of Second Street SE, in the vicinity of the new federal courthouse. It’s expected to open by the summer or fall of 2013 with 595 parking spaces on six floors.

Penford Products Co. as seen from the new Federal Courthouse in Cedar Rapids on Tuesday morning, April 10, 2012. (Stephen Mally/Freelance)

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.

Cedar Rapids aerial photograph, 7/12/2003, horizontal, Cedar River, Quaker Oats (Gazette stock photo)

CEDAR RAPIDS — On the eve of the city’s largest-ever sale of new bond debt, Moody’s Investors Service has assigned Cedar Rapids its top Aaa bond rating, which the city has maintained for nearly 40 years.

A top bond rating — Iowa City, Ames and West Des Moines are the only other Iowa cities where it’s been granted — allows a jurisdiction to borrow money at more favorable interest rates. Nationwide, 197 cities — just 7 percent of those with bond ratings — qualify for the Aaa level, City Manager Jeff Pomeranz said.

“It’s a very elite club that we’re in, and it’s something that’s very important to our city,” he said. “Obviously, we’re pleased to maintain our Aaa bond rating. The Moody’s report is indicative of the financial strength of the city of Cedar Rapids’ organization as well as the strength of our local economy.”

The ratings agency said the Aaa score reflects the city’s large and diverse economy and its role as a regional service center. Moody’s also credits Cedar Rapids’ government with a “strong and stable” reserve in its general operating fund, “healthy financial flexibility” and a “manageable, though above average debt position with future borrowing anticipated in the near-term.”

In the days leading up to Monday’s announcement, local officials had expressed some anxiety about the city’s ability to retain its long-held top bond rating, in part because of the costs and unknowns related to the downtown hotel and convention complex now under construction.

And in fact, the agency’s announcement did come with a caveat — “a negative outlook,” in Moody’s terminology. The outlook reflects the risk associated with owning and operating the facilities, slated to open in 2013.

“The project binds the city to a long-term commitment that could pressure overall financial operations if the convention center complex does not perform as expected,” Moody’s said. “We will continue to monitor the performance of the complex and the city’s ability to successfully handle any challenges that may arise in its construction and operations.”

Pomeranz said the city has projections on hotel occupancy, room cost per night and the amount of traffic that the Convention Complex will attract as well as a strong partnership with Hilton, which will manage the hotel under the DoubleTree by Hilton brand.

“But there is some unknown out there,” Pomeranz said, adding, “… We think it’s fair that the hotel be called on out as an area of potential risk.”

Finance Director Casey Drew said today’s bond sale will raise Cedar Rapids’ total outstanding general-obligation bond debt from $282 million a year ago to about $336 million. The new total will bring the city to within 74 percent of its debt limit.

Thirty miles to the south of Cedar Rapids, the city of Coralville last month saw Moody’s downgrade its debt to A3 — six steps below Aaa — due, in part, to its need to subsidize the Coralville Marriott Hotel and Convention Center.

Huber said a search consultant, the Mercer Group Inc. of Santa Fe, N.M., will work with the city’s Civil Service Commission to come up with a list of finalists. City Manager Jeff Pomeranz will make the final selection with the approval of the council.

The new chief will replace Greg Graham, who left the job in January. Interim Police Chief Dick Stephens retired at the end of March, and the department’s three captains, Tom Jonker, Steve O’Konek and Bernie Walther, are trading off in the position until a hire is made.

Riverside Park, on the south east side of Cedar Rapids, is threatened with relocation as Penford looks to buy the property to expand the company, meaning the baseball diamond, skatepark, and playground equipment, would all be moved to a new location. (Nikole Hanna/The Gazette)

CEDAR RAPIDS — The City Council will vote today on heading to the bargaining table with Penford Products Co., which wants to buy Riverside Park next door to its plant for a possible expansion.

The council’s vote will finalize the terms — discussed a month ago — that it will try to get into any sale agreement with Penford. Officials will ask the company to pay $1.67 million for the 11-acre Riverside Park; 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.

The appraised value of the park itself is $670,000, according to city figures.

The proposed terms also will ask Penford to shoulder the cost of relocating a large trunk sanitary sewer and a large storm sewer from the park. In addition, the city will need to retain an easement at the property so it can maintain a flood wall, pumping station and storm sewer pump there.

Cedar Rapids’ parks master plan envisions a trail between Penford’s plant and the Cedar River. However, the city’s proposal to Penford concedes that the trail may need to shift at the plant along First Street SW rather than running along the river.

The proposal also will ask Penford to provide its nearest neighbor to the east, the National Czech & Slovak Museum & Library, continued access to A Street SW. Officials with that facility, which sits on the other side of the 12th Avenue SW bridge from Riverside and Penford, has publicly opposed the plant’s expansion.

Penford, a corn wet-milling plant with about 225 employees in Cedar Rapids, 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. The company held three public meetings in January to spell out its plans, which it has said could include new investment of between $30 million and $100 million and the creation 20 to 50 more permanent jobs.

President and General Manager Tim Kortemeyer said Monday that the company remains “very interested” in the park and he is “very positive” that the parties will come to an agreement on the sale.

As for any specific plans, Kortemeyer said Penford continues to negotiate with possible partners, but nothing is yet certain.

“We’re always in conversation with partners that are in the biotechnology space,” he said. “There’s a lot of activity going on. But to say when there’s going to be alignment with Penford and an opportunity … that could literally be anywhere from a month (from) now to a number of years in the future.”

In keeping with suggestions made last month by Mayor Ron Corbett and other council members, the proposed terms call for the city retain the deed to the park property so officials can review any planned expansion at Penford once the details unfold.

The terms also call for Penford to provide “significant” screening from neighboring properties with mature trees. The proposal asks Penford to plant four trees for every tree removed from the site and to add 50 other trees.

Finally, officials also want Penford to show that any expansion will not harm air quality or add unpleasant odors.

After Penford approached the city about buying the park, the city requested proposals from any entities interested in the property. Penford submitted the only proposal.

The store will begin as an 80,000-square-foot one and be designed to expand to 107,000 square feet in size. Hy-Vee, which has said it will build in perhaps two years, also will build a 4,300-square-foot convenience store with fuel pumps and a 3,900-square-foot car wash at the front of the site facing the future Tower Terrace Road.

The store will sit next to a residential neighborhood, and commission members asked Hy-Vee representatives about its plans to buffer the new store from homes. The store will incorporate new city building design standards — including using differing materials on the facade of the building to visually break up its size and using screening to hide heating and cooling units on the roof — even though those standards won’t be in place for a few months.

Commission member Allan Thoms questioned why the Hy-Vee plan called for 507 parking spaces when city standards allow for fewer, and Hy-Vee representatives said the extra space is needed, in part, to allow room for outdoor sales. Thoms asked Hy-Vee to consider using permeable paving on the extra parking area.

Neighbors have supported Hy-Vee’s plans even as they have objected to the property owner’s larger plans to build other commercial structures closer to residences to the west of the planned grocery store. However, the City Council has approved a rezoning for the entire commercial development.

Hy-Vee representatives have said the company’s long-range plan is to close its store in leased space at 279 Collins Rd. NE, next to Lindale Mall, at some point after the location at C Avenue and Tower Terrace Road NE opens.

New exterior images for the NewBo City Market, which now Includes a playground, demonstration garden with rain water collection, solar panels, and other environmentally friendly features. (Cedar Rapids City Market Inc.)

CEDAR RAPIDS — Construction crews were busy Thursday taking the first steps to convert an old metal pole building once home to Quality Chef Foods into the NewBo City Market.

The launch of the construction of the year-round farmers marketon Third Street SE in the heart of the New Bohemia arts and entertainment districtwas helped by a City Council decision to contribute $500,000 in revenue from the city’s local-option sales tax to the market.

The council contribution has brought the market within about $200,000 of its $4.37 million construction budget, which includes a $300,000 operating reserve, said Patrick DePalma, president of the market’s board of directors. The market has received an additional $1.2 million of in-kind city support based on the land value of the city-owned Quality Chef Foods site and demolition of other buildings on it.

Last week’s half-million-dollar grant from the City Council was a shift in City Hall gears from last October when the council agreed with some pause to loan $1.3 million to the market if necessary so the market could show it had sufficient local economic support to qualify for a state Community Attraction & Tourism (CAT) grant. At the time, the council and market representatives said they didn’t expect the market, which was in the midst of a campaign to raise $3 million in private money, would actually need to use the city loan.

The loan guarantee did help. The market won a $750,000 state CAT grant in November.

DePalma said the City Council’s willingness to change its loan to an outright grant will allow the market to open without construction debt.

“It is critical that we move forward with a plan that is viable and sustainable for the long term,” he said.

Mayor Ron Corbett said the City Council now will cancel the loan guarantee to the market in trade for the $500,000 city grant.

He noted that the Federal Emergency Management Agency had provided the city with $547,000 in disaster funds for the city-owned former Quality Chef buildings, which were damaged in the 2008 flood. Of that amount, $187,000 was used to demolish some buildings on the property and the rest went to other city needs.

The City Council, the mayor said, long has put the market at the top of its priority list of projects to fund with disaster dollars. Steering sales-tax revenue to the market meets the requirements for use of the sales tax because it “matches” federal dollars that came to the city for the property, he said.

The market’s DePalma said the city’s $500,000 grant comes at a time when the market’s construction budget had grown from an estimated $3.8 million to $4.37 million (not counting the in-kind value of the land and demolition on the property). The added expense comes from the cost to build a kitchen for the Kirkwood Community College culinary arts program, one of the market’s anchor vendors, and to add vent hoods and dishwashing stations and equipment to attract vendors to the market, DePalma said. A fitness playground also is being added.

NewBo City Market is expected to open in late fall.

The firm, AgSugar International, now known as Vertecra, secured an incentive package worth about $600,000 from the Iowa Economic Development Authority in 2011, based on two industrial processes that the company said would benefit the ethanol industry. The company discovered in September 2011 that the processes didn’t do what they had expected, though the company pushed ahead and signed its contract with the state agency. The company said it was working on other similar efforts.

The city of Cedar Rapids, as well as the local economic-development entities in Cedar Rapids, had supported the AgSugar International pursuit of state incentives, incentives that also called for a local property-tax exemption.

In revoking its sponsorship, the City Council noted that the Iowa Economic Development Authority had notified AgSugar International/Vertecra in March that the company had defaulted on its contract with the state agency. The company has asked the agency to reconsider.

The company’s troubles and its public incentives were reported in a story in The Gazette in January. The Gazette reported last month that the state agency had ended AgSugar International/Vertecra’s contract and demanded that the company return $250,000 it already had received from the state agency.

The change in a portion of the one-way downtown avenue grid is something downtown leaders and City Council members have talked about for several years as a way to slow traffic down and turn the downtown into a place to experience rather than a place to hustle into, from or through.

Now, the redesign of the GTC bus depot, which sits at Fourth Avenue SE at First Street SE, is turning talk into action. The redesign of the depot — so buses no longer back out of stalls, putting bus patrons walking to and from buses at risk — necessitates that city buses both arrive and depart on both Fourth and Fifth avenues SE.

“A strong majority of downtown stakeholders continue to support conversion of some of our one-way streets back to two-way,” Doug Neumann, executive vice president of the Cedar Rapids Metro Economic Alliance, said Tuesday. “In this case, there’s no choice but to convert to two-way traffic around the GTC, but this project has rejuvenated interest in converting additional blocks of Fourth and Fifth avenues.”

The basic plan for the GTC redesign calls for Fourth and Fifth avenues SE to change to two-ways between First and Third streets SE, though the City Council’s Development Committee and City Manager Jeff Pomeranz this week expressed support for a more expensive redesign option that will convert Fourth Avenue SE to two-way out to Fifth Street SE.

Brad DeBrower, the city’s transit manager, put the cost of the renovation of the GTC and the conversion of Fourth and Fifth avenues SE between First and Third streets SE at more than $9 million.

Of the cost of the basic project, the city will pay about $3.4 million from city funds, including $1.6 million from local-option sales tax revenue. The Federal Emergency Management Agency is contributing another $1.5 million in disaster funds and the Federal Transit Administration about $4.4 million.

Construction is expected to start in the fall and be complete by next spring.

Altering a portion of the downtown one-ways will return that part of the downtown to the way it was some 50 years ago.

Cedar Rapids historian Mark Stoffer Hunter said that Fourth and Fifth avenues SE in the downtown became one-ways after the downtown train depot was torn down in 1961, a demolition that allowed Fourth Avenue SE to continue through what had been the depot site.

Four or five years earlier, Stoffer Hunter said the city converted busier Second and Third avenues SE from two-ways to one-ways to improve traffic flow at a time when the number of people who owned a car had been rapidly increasing and when “everybody was still going downtown.”

Stoffer Hunter said the conversion from two-ways to one-ways a half century ago came in piecemeal fashion and not all at once, similar to the way the streets now appear to be turning back to two-ways. He noted that one-way portions of Second and Third avenues have converted to two-ways in the vicinity of the Physicians’ Clinic of Iowa’s new medical building, which is being built at 10th Street SE on what had been a portion of one-way Second Avenue SE.

A bus pulls into the Ground Transportation Center in downtown Cedar Rapids on Tuesday. January 9, 2007.

Construction crews work on the future site of the Cedar Rapids Public Library in Cedar Rapids, on Monday, March 26, 2012. (Nikole Hanna/The Gazette)

CEDAR RAPIDS — Cost of the asbestos removal at the site of the new downtown library has risen to more than $1.7 million and pushed back the opening of the facility another month.

Initially, the city’s library board had estimated that the cost to remove asbestos as part of the site demolition would be $42,916 and that the new library would open in June 2013.

However, a month ago, the library board approved the spending of an additional $1.3 million for the additional asbestos-removal costs, which now have climbed to a total of $1,766,014. A month ago, the library opening date was moved into from June to July 2013.

Bob Pasicznyuk, the city’s library director, on Monday said the complications of asbestos removal have moved the library’s projected opening date back even further, to the end of August 2013.

“It’s the time it took to prepare the site,” Pasicznyuk said. “Our asbestos removal has lasted that long. We’ve lost about 10 weeks. … It’s something we had to deal with. But we didn’t let it get us down.”

Excavation at the new library site uncovered a large amount of asbestos-tainted debris from the Washington School built in 1855 and the Washington High School built in 1890, which once sat on the site.

In the school demolition of 1946, much of the building ended up in the school’s basement and boiler rooms over which an American Legion Post building and bowling alley was built. TrueNorth Companies moved into the building in 2001, and in early 2010, the City Council voted to purchase the site for the new library.

Pasicznyuk this week is asking the library board to add $250,000 from private donations to the overall project budget to beef up the project’s contingency fund. The initial $3 million contingency fund now has shrunk due to the asbestos-related demolition costs and some project enhancements.

With the additional $250,000 added to the project’s contingency fund, the overall project budget increases to $45,820,322, which Pasicznyuk noted is still $3 million less than the project’s original projected budget.

Three project enhancements being proposed to be covered by the project’s contingency fund are a $300,000 addition to the $265,000 in the project budget to purchase art for the building; a $79,366 addition to pay for more thorough testing and inspection of the library’s exterior shell; and a $60,000 addition to enhance the skywalk that connects the library to the Fourth Avenue Parkade.

A rendering depicts the interior of the 21,080-square-foot branch.

CEDAR RAPIDS — A rendering of the facade of the city’s new west-side library branch might not make you forget the building was once a Target store.

Even so, library Director Bob Pasicznyuk said Monday that the planned exterior changes will make clear what’s being housed in part of the former retail store.

“It should scream that it’s a public library, so we’ve tried to bring that to it with small changes to the exterior facade,” Pasicznyuk said.

The library will take up about 25 percent of the former store space at 3750 Williams Blvd. SW, and with renovation about to begin, officials are unveiling the design plans for the 21,080-square-foot facility.

The new site is across the street from Westdale Mall, where the west-side branch has been located for years. The facilities there were expanded to serve temporarily as the main library location after the former downtown building was damaged in the Floods of 2008.

Earlier this year, the library board cited lower cost and better accessibility in selecting the former store for the new permanent west-side branch. Unlike two other Westdale sites that were considered, the Target site provides exterior windows and a street presence and is not dependent on the mall’s hours or long-term well-being.

Pasicznyuk said it should cost $156,650 to run the new branch for the first full fiscal year it’s occupied. Housing similar services at Westdale would cost $215,000, he said, largely because the mall can’t provide warehouse space and so the library would need to pay for it elsewhere.

The west-side branch is expected to open in December 2012 or just after the first of the year. The library also will maintain a presence in Westdale Mall until the new downtown facility opens in August 2013.

The new space is being leased from CR Real Estate Properties LLC. The branch will receive a discount on rent for its first six months of operation, Pasicznyuk said.

Part of the former Target store at 3750 Williams Blvd. SW (below) will be renovated to house the new west-side branch of the Cedar Rapids Public Library. Library officials chose the site in part because it will allow for exterior windows and a street presence.

Property values in the Oak Hill neighborhood have increased since new homes, including the three at center on Seventh Street SE, were built on empty lots after the flood. Photographed on Monday, April 23, 2012, in Cedar Rapids. (Liz Martin/The Gazette)

CEDAR RAPIDS — Retired auto technician Gerald Wheeland said he can feel the change in Oak Hill neighborhood every time he reaches for his wallet.

In 2009 and 2010, some 40 homes went up in a tree-lined area of Oak Hill between Mercy Medical Center and Metro High School as part of a neighborhood-turnaround experiment. The initiative has sent the value of Wheeland’s 56-year-old ranch house climbing.

It seems a rising tide of new-home construction in an existing neighborhood can lift the value of older homes around it.

From 2010 to 2011, the value of Wheeland’s place at 924 Ninth St. SE rose 12 percent. At the same time, residential property values citywide grew just 1.5 percent, said City Assessor Scott Labus.

From 2008 to 2010, residential values citywide increased 5.5 percent. For existing homes in the heart of the building spree in Oak Hill, values went up 10 percent, according to a review of about 100 older homes there worth more than $40,000.

Labus calls it the “principle of progression” — the general tendency for a spurt of new investment to increase the value of existing properties nearby.

With an increase in property values comes an accompanying increase in property taxes.

Even so, Wheeland, 69, who lives primarily on a fixed income, said the new homes in the neighborhood are a welcome change from just a few years ago, when these same blocks were littered with vacant lots and tainted with a sense that little would change. New homes, he adds, have a way of motivating those with older homes to spruce up what they have.

“One person starts, then the next one and the next one, and you start feeling guilty if you don’t,” said Wheeland, an active member of the Oak Hill Jackson Neighborhood Association.

Strategic move to revitalize areas

The government-backed neighborhood revitalization program that is transforming the heart of Oak Hill — the blocks between Seventh and 10th streets and Ninth and 12th avenues SE — has been so successful that it is being duplicated in some flooded neighborhoods.

City Hall is using a similar housing-incentive program in west-side neighborhoods outside the 100-year flood plain beyond where a levee may go one day. Some 200 new homes are slated to go up where hundreds of flooded homes have been bought out and demolished, creating vacant lots.

The question is this, though. Can new homes intermixed with existing homes in older, moderate-to-low-income neighborhoods help increase the value of nearby homes and entire neighborhoods? Will the neighborhoods take on a new life and become more inviting than they had been?

That appears to be what is happening in Oak Hill.

Overall home values in 2006 in the heart of Oak Hill, where new-home construction has been focused, totaled $8.1 million. By 2011, the total property value on the same blocks had jumped to $12.44 million — a 53 percent increase, according to the City Assessor’s Office.

The actual jump in value is likely higher.

City Assessor Labus, who breaks the city into 192 micro-neighborhoods and analyzes property valuations in each, earlier this month released 2012 property valuations. They showed property values since last year in Oak Hill were among the largest of the increases.

Labus quickly withdrew the neighborhood’s 2012 values, however, and now says he needs to do a house-by-house, on-site analysis because home sales have not been numerous in the neighborhood and much has changed quickly.

Interestingly, the average cost to build each of the 40 or so new homes in Oak Hill was about $135,000, not counting the value of the lot. Yet nearly all those homes now are valued at less than $120,000.

Labus calls it the flip side of the principle of progression. New homes mixed into a neighborhood in decline can help increase the value of old homes, but the old homes can drive down the value of new homes, too. It’s the principle of regression, he said.

A central reason for the housing incentives in Oak Hill and west-side neighborhoods — incentives that include a city-owned lot and down payment assistance to qualified buyers — is to help persuade buyers and bankers to invest in neighborhoods that neither have had an interest in.

The idea is that over time the entire neighborhood becomes a more desirable place to live, raising the values of all homes, including pushing the value of the new homes in line with the actual costs to build them.

A little history of the program

The recent history of Oak Hill, nestled near Mercy Medical Center and the busy commercial artery of Eighth Avenue SE, is a good story. Richard Luther, a former city development manager, recounts the tale, starting with accountant Robert Blythe and his Southeast Capital Co.

Blythe bought up inexpensive, dilapidated homes in Oak Hill, demolished them and held the vacant lots. He speculated that Mercy Medical Center and related medical offices would spill into the neighborhood and buy the lots at commercial prices, said Luther, who now runs his own planning and development firm, Creative Development Solutions Inc.

Blythe’s dream never came to pass, Luther said, in part because the Oak Hill Jackson Neighborhood Association persuaded City Hall to keep commercial development from extending into the residential area of Oak Hill.

At the same time, neighborhood leaders like Luther Trent and city planning staff came up with an idea to buy vacant lots and offer them and other incentives to individual buyers willing to move into Oak Hill and build a house.

Then Mayor Paul Pate announced the new program — Housing and Neighborhood Development, or HAND — during his State of the City speech in 2004. It wasn’t until November 2005, as he was leaving office, that Pate persuaded a majority of the City Council to put the program in place.

Blythe died in 2007, and the city bought his lots in a single transaction for the HAND program, Luther said.

It was hard, though, to find any takers.

Along came Brad Larson, a city planner, who was shopping for a new house. He and five others looking for a home investigated the HAND program in Oak Hill, but only Larson took the plunge.

“I was the first one in there, and all the neighbors came over and talked to me,” Larson said. “It’s a great neighborhood.”

Even so, there was not a line of followers.

HAND was an idea sitting on a shelf when the Flood of 2008 hit, damaging some 1,200 homes — mostly in core urban-renewal neighborhoods, although most of the Oak Hill residential neighborhood was spared.

The Replacement Housing Task Force dusted off the HAND program, and homebuilder Kyle Skogman, president of Skogman Homes, volunteered to find income-qualified buyers, persuade some to move into Oak Hill and build some homes there.

Construction was complete on the first group of homes in early 2009. Over the next two years, Skogman built a total of 34 homes; other builders, about five.

“It’s just nice to see the lots being filled up,” said Larson, who lives at 900 Eighth St. SE.

Neighborhood is evolving

Newcomers range from young professionals with young children to older couples and people in between. “It’s livened up the neighborhood. People want to be where other people are at,” Larson said.

Long-standing neighbors agree the homebuilding has been a good thing, but they also question how qualified buyers were selected, said Dedric Doolin, president of the Cedar Rapids chapter of the NAACP. A few have been African-American, but most not.

Oak Hill had been mostly an African-American neighborhood.

“It’s changed the diversity of the neighborhood quite a bit,” said Doolin, himself an Oak Hill property owner and member of the neighborhood association.

Jerry McGrane, 72, a leader in the Oak Hill Jackson Neighborhood Association for many years and a former City Council member, lost his house on Second Street SE in the flood and is among those who qualified for a new house in Oak Hill.

McGrane said the housing incentives have been life-changing for Oak Hill and property owners there. A neighborhood on the upswing means less crime and more property-tax revenue for the city, county and schools, he said.

“Do empty lots bringing in nothing (in property taxes) make sense?” McGrane said. “That’s what we had then. This is what our dream turned into. We don’t have empty lots any more.”

Luther said all those vacant lots had brought uncertainty that led to further decline of the neighborhood. The HAND incentives turned it around.

“A drive through the neighborhood reflects the hard work done by the neighborhood and the very positive and effective redevelopment program provided by the city,” said Luther. “I consider the work I did for this project to be one of the high points of my career.”

The city’s Larson calls it a blessing that the city had something like the HAND program ready to go after the flood. It’s helped replace houses lost to the flood, and it’s helped bring Oak Hill back to life, he said.

“The (Oak Hill) neighborhood had sat for decades and decades and nothing (in terms of investment) was happening,” Larson said. “Personally, I don’t feel anything in the neighborhood would have changed if the city hadn’t stepped in.”

Gerald Wheeland has seen his property values and taxes increase since new homes, like the one pictured at left, were built on empty lots after the flood. Photographed on Monday, April 23, 2012, in Cedar Rapids. (Liz Martin/The Gazette)

Potatoes grow at one of the urban farm sites in the Time Check neighborhood on Wednesday, April 25, 2012, in Cedar Rapids. (Liz Martin/The Gazette-KCRG)

CEDAR RAPIDS — First-of-the-season radishes are about to come out of the ground in the Time Check neighborhood, proof of the promise of a new day for a riverside spot largely destroyed in the Floods of 2008.

The radishes and the rows of other vegetables being planted on a dozen or so vacant lots in the northwest neighborhood are the product of a fresh idea for Cedar Rapids — an urban farm.

It’s the brainchild of the non-profit neighborhood-building organization Matthew 25, which has worked as a partner with the Affordable Housing Network Inc. to renovate flood-damaged homes in 25 west-side blocks in the Block by Block program.

The group now divides its efforts among affordable housing, its Youth Empowerment program and the urban farm effort called Cultivate Hope.

After nearly a year of planning, design and discussions with City Hall, Matthew 25 secured a three-year, no-cost lease from the City Council on about 16 city-owned lots, most of which had flood-wrecked homes on them that have now been or will be demolished.

By and large, the lots are not available for building — most are in the 100-year flood plain or sit along the railroad tracks that cut through this piece of the neighborhood.

“We’ve focused on this place that not a lot of people wanted to invest in. It’s a way for us to show some beauty and hope for this area,” says Clint Twedt-Ball, co-executive director of Matthew 25 with his brother, Courtney Ball.

The group expects to have about 1.5 acres on a dozen or so residential lots in vegetable cultivation this season, and a little more than 2 acres on all 16 lots in the years ahead.

Twedt-Ball and Ball emphasize that the point of the organization’s urban farm is more than simply growing vegetables. Their hope is for the program to also teach youngsters the value of growing food and show them how to do it, and how to eat in a healthier fashion. The farm is intended to be something of a working agriculture classroom even as it produces vegetables to sell, they say.

Twedt-Ball says the Cedar Rapids school district has estimated that 40 percent of its students are overweight or obese, with the numbers perhaps higher in lower-income areas like Time Check.

“So there is a need to shift what kids are eating,” Twedt-Ball says.

Matthew 25’s business plan for the farm leans heavily on the work of volunteers. The brothers predict that people will volunteer to support the farm’s goals of education and community-building, while also using the experience as a team-building exercise for their own volunteer groups. This spring, a team of AmeriCorps volunteers has been doing much of the early planting.

To help cover the farm’s costs, neighborhood residents and others can buy community-supported agriculture shares that will entitle them to receive vegetables from the farm.

As it gets off the ground, the farm this year will sell 25 shares, about half for $400 and half to residents of the nearby neighborhoods for a reduced fee of $200. A share will provide fresh produce weekly for 20 weeks. Twedt-Ball says area restaurants also have expressed an interest in purchasing some of the produce, and some also may be sold at farmers markets.

OPN Architects Inc. of Cedar Rapids and students at the Iowa State University College of Design have worked with Matthew 25 to come up with the urban farm’s design, and both will be thanked along with others at the farm’s dedication at 10 a.m. Friday in the 400 block of G Avenue NW.

AmeriCorps members Patrick O'Neill of Monassas Park, Virginia (left) and Imani Ruffin of Brooklyn, New York, spread mulch in preparation for Friday's press conference at one of the urban farm sites in the Time Check neighborhood on Wednesday, April 25, 2012, in Cedar Rapids. (Liz Martin/The Gazette-KCRG)

The Cedar River nears its crest in Cedar Rapids shortly before noon on Friday, June 13, 2008.(Liz Martin/The Gazette)

CEDAR RAPIDS — Without comment or mention that the matter was on its agenda, the nine-member City Council Tuesday night unanimously approved how it will spend most of the remaining revenue from the 1 percent local-option sales tax.

In approving the spending measure along with an assortment of minor matters as part of the consent agenda, the council divvied up the final $30 million the tax is expected to raise before it expires on June 30, 2014.

Of that amount, $15.635 million will go to fill spending gaps on flood-recovery building projects. Another $1.2 million will be used to pay part of the city’s share of the pre-construction design and engineering work that’s being carried out by the Army Corps of Engineers for a proposed east-side flood protection system. And $13.165 million will be used to cover unknown project costs and as local matching funds needed to secure money from a newly created state fund to help communities build flood protection.

After the meeting, Mayor Ron Corbett said he had commented publicly late last week about what the council intended to do with the final $30 million, so there was no need to discuss it at Tuesday night’s meeting.

The tax was put in place for 63 months beginning April 1, 2009. With the first three years past, Corbett said, the council has spent what it has taken in to date as it said it would — to help flood victims, to help with the renovation of flood-damaged homes and to match federal dollars for flood recovery.

He called Tuesday night’s vote on how to spend the remainder of the money “the closing of the book” on the local-option tax.

Twice in the last year — last May 3 and this March 6 — voters turned down a request to extend the tax to provide local funds to help build flood protection on both sides of the Cedar River. Corbett said some of the vocal opponents of the tax extension had called on the City Council to spend some of the remaining revenue from the current tax on flood protection.

“So we’re responding by spending revenue from the fifth year of the tax on flood protection,” he said.

The sales tax has been bringing in about $17 million a year for flood-related programs; another 10 percent of the total goes to property-tax relief.

Member Kris Gulick said Tuesday night’s vote was an important one even if it did not generate council discussion. He said members had talked long and publicly from the start that it would use some of the tax revenue to fill funding gaps to pay for what the Federal Emergency Management Agency wouldn’t.

“That was one of our plans we had from Day 1,” Gulick said. “We knew we would have gaps, and rather than use property taxes, we knew the local-option sales tax would be one of the options.”

Colleague Chuck Swore said the council has discussed the tax enough.

“Every time we’ve talked about LOST (in public) we’re in trouble,” he said. “So why toss it out for something else for somebody to say, ‘Oh now, they’re … .’

“We’ve been accused of taking the money ourselves and we’ve been accused of having a corrupt government, all because of LOST. You get to the point where, what do we want to talk about LOST for? It’s a lost subject. We’re at the end. We’re going to get it done and we’re going to move on.”

Of the $15-million-plus set aside for city building projects, $10.9 million will go to new public works facility. The rest will be spent in various amounts to fill funding gaps for the Ground Transportation Center bus depot, the levee portion of the riverfront amphitheater, City Hall renovations, the new Time Check Recreation Center and the demolition of the First Street Parkade. The NewBo City Market is getting $500,000 of the total as well.

Police and near by residents stand outside an apartment located just north of Kirkwood Community College, in Cedar Rapids, Iowa, after a shooting which injured two people, on Friday, April 20, 2012. The two victims were taken to the hospital to treat their injuries. Shortly after, a third gunshot victim arrived at the hospital, it is unclear at this time if the two shootings are related. (Nikole Hanna/The Gazette-KCRG)

CEDAR RAPIDS — Four shootings here in less than a month, with several people injured and one dead, prompted City Manager Jeff Pomeranz to call on Interim Police Chief Tom Jonker to make a public report to the City Council on Tuesday night.

Jonker pointed out that the most recent shooting, at an apartment next to Kirkwood Community College on Friday, resulted in an arrest Monday night. He said an arrest is likely in another shooting, though not in a third. Meanwhile, the investigation is continuing into an April 16 homicide at a strip club.

The city is experiencing “an uptick” in verified shooting reports, though, Jonker said. There were three in all of 2010 and 11 the following year, but the total stands at 18 in the first four months of this year. He said the Police Department was using preventive patrols and “intense patrols” in response to the violence.

“Have confidence in us that we’re getting the job done,” Jonker asked the council.

Pomeranz said Jonker himself is “very familiar with the streets and with responding to violence as well as leading officers.”

Each of the Police Department’s three captains is serving a three-month stint as interim chief during the search for a new permanent chief to replace Greg Graham, who left in January for a job in Florida.

As a result, the Cedar Rapids contingent on the Corridor Metropolitan Planning Organization flexed its muscle this week and committed the agency to spend 80 percent of a funding pot of between $3 million and $4 million a year on  trails and bike lanes on streets. Nearly all of the funds now go to street projects in the metro area.

The planning group board’s vote was 15-4, with the mayors of Fairfax and Robins and representatives from Marion and Hiawatha voting no.

Cedar Rapids Mayor Ron Corbett and council member Monica Vernon, chairwoman of the planning group, led a contingent of Cedar Rapids officials and appointees, two Linn County officials and Cody Crawford, a Marion City Council member, in supporting the trails measure for five years.

None of the local street projects slated in the next few years for the metro group’s funding, which comes from the federal Surface Transportation Program, will be diverted to the new allocation formula that favors trails.

However, 80 percent of the money that returns to the funding pot from street projects that don’t move ahead would be spent for trails.

Come the federal fiscal year 2016, which runs from October 2015 through September 2016, some $4 million plus an additional $3 million in unspent funds are apt to be available for the increased spending on trails and bike lanes.

Vernon said the board was sending an “important message” to the community that the agency is serious about the development of a connected system of trails and bike lanes in the metro area.

“We have trails, but we don’t have a system,” Vernon said. “People think of trails or bike lanes so they can actually get somewhere. They want to bike to work, to shop. That’s why some of us said, ‘We got to pay attention to this.’ ”

Vernon noted, too, that the city of Cedar Rapids is competing to become a Blue Zone community to show its commitment to healthy lifestyles, and a focus on trails fits that effort.

The planning organization’s 2040 transportation plan, she added, points out that the metro area is lacking in trails and bike trails. But she said the metro area can’t wait 30 years to get what it needs in place.

Robins Mayor Ian Cullis, who voted against the shift of money to trails, said such a change didn’t make sense, and he suggested that trail advocates should work to tap private donations to help beef up the metro area’s trail system.

Mark Powers, Hiawatha’s community development director who also voted no, said now wasn’t the time to shift most of the organization’s money to trails from streets when federal support for street projects is growing smaller and smaller.

“More people use streets than bikes,” Powers said Friday. “We need to maximize what we can for streets.”

Corbett said most local projects only get a modest portion of a project’s overall cost from the planning agency and he found it hard to believe the agency’s member jurisdictions — Cedar Rapids, Marion, Hiawatha, Robins, Fairfax, Ely and Linn County — would stop an important project because of an absence of funds from the planning organization.

Tim Mooney, a Marion representative on the board, noted that cities can get pieces of funding from the agency’s pot over a few years that can provide substantial support for local projects. Some street projects won’t get built with the shift of money to trails, Mooney said.

Mays Island aerial, Cedar River, downtown Cedar Rapids, 7/12/03

CEDAR RAPIDS — The city of Cedar Rapids will try to be the first in line to seek flood-protection help from a new state fund created by the Iowa Legislature and approved on Thursday by Gov. Terry Branstad, Mayor Ron Corbett said shortly after the governor acted.

Corbett said the City Council will vote next Tuesday to use about a year’s worth of revenue from the city’s current 1 percent local-option sales tax, which expires on June 30, 2014, to serve as local matching funds needed to tap into the new state funding pool for flood protection.

The city’s hope, he said, is to have an estimated $14 million to $15 million in local sales-tax revenue to match a like amount from the state fund. Then, the $30 million or so that might result would provide most of the non-federal money needed to match federal dollars to build the Army Corps of Engineers’ approved flood-protection system for the east side of the Cedar River, he said.

“Remember, we’re also competing for this state money,” the mayor said. “So it’s in our best interest to try to assemble a local match as swiftly as we can.”

Congress still has to fund the majority share of the Army Corps’ $104 million plan to protect the east side of Cedar Rapids. But Corbett said the city’s plan to combine revenue from its local-option sales tax with state funds will enhance the city’s position to secure congressional funding.

Sen. Rob Hogg, D-Cedar Rapids, described the creation of the state fund as “a significant bipartisan accomplishment.”

Branstad on Thursday called the new state flood-protection fund “a tool” that will help communities across the state.

As for Cedar Rapids, “The Army Corps is only willing to fund flood protection on one side of the river, and the community obviously feels strongly that there needs to be protection on both sides,” the governor said. “This would be a mechanism whereby the state could be of assistance.”

For now, Corbett said the city is focused on getting the Corps’ system build on the east side of the river. As for west-side protection, Corbett said it was hard to see how it would be built in the “foreseeable future.”

The mayor had pushed unsuccessfully in May 2011 and again on March 6 to convince local voters to extend the city’s local-option sales tax beyond June 2014 so revenue from it could help access additional state funds to pay for west-side flood protection. Without the additional local revenue, it’s not clear today where money for west-side flood protection will come from, he said. Even so, the mayor envisioned east-side flood protection being in place in five years and west-side flood-protection in place in 10 years.

This month, the city started its fourth year of a five-year, three-month period of collecting the 1-percent local-option sales tax for flood recovery and flood protection. Revenue in the last year of the tax will be steered to flood protection and any other outstanding flood-recovery matters.

Corbett said the city has used most of the revenue in the first three years of the tax — about $17 million annually — for flood-related uses, including payments to individual flood victims for personal possessions lost in the flood and for the renovation of flood-damaged rental properties. Other money has gone to fill other gaps related to flood-damaged housing. Ten percent of the tax revenue goes toward property tax relief.

The mayor said he expected the City Council on Tuesday also to vote to spend most of the revenue from the local-option sales tax for the year ahead to cover flood-recovery spending gaps on city building projects much like it already has on the city’s library and animal control facility.

He said the council is looking to approve $10.4 million in revenue from the local sales tax for the new public works building; $1.6 million for the Ground Transportation Center bus depot; $700,000 for the northwest recreation center; $500,000 for the NewBo City Market; $675,000 for the levee portion of the riverfront amphitheater; $500,000 for City Hall renovations; and $1.2 million for part of the city’s portion of the cost of the Army Corps’ preconstruction design work.

City Council member Kris Gulick, who is chairman of the council’s Finance and Administrative Services Committee, on Thursday said he had studied City Hall emails and other written documents from four years ago. In those, he said the City Council made it clear that the Federal Emergency Management Agency would not pay all the costs to fix or replace flood-damaged buildings and other infrastructure.

“We knew we would have these gaps and that the local-option sales tax was one of the options to be able to fund it,” Gulick said. One of the selling points of the sales tax as it was approved in 2009 was that it would lessen the need to use property taxes to pay off some of the flood-recovery costs, he added.

The state fund allows individual communities to seek a portion of the growth in the state sales tax collected in their communities for use in flood protection projects. They must apply by Jan. 1, 2016. Up to $30 million will be available statewide in any given year, with $15 million the most any one community can receive in a year. Individual communities can position themselves to tap into the fund for up to 20 years. The fund also sets aside some of the funding pool for communities that see small or no sales-tax growth.

That was the message from Brent Oleson, Linn County supervisor and a member of the Cedar Rapids/Linn County Solid Waste Agency board, as Oleson on Tuesday pushed to incorporate a project labor agreement into the agency’s upcoming $14-million project to build a new Resource Recovery Center at its landfill north of Marion.

Immediately upon taking office in January 2011, Branstad issued Executive Order 69, which prohibited the use of state funds on construction projects with project labor agreements and prohibited project labor agreements on state projects.

Oleson said the fear of a lawsuit from the Governor’s Office should not stop the Solid Waste Agency from moving ahead with a project labor agreement.

“I don’t think we should let that scare us,” Oleson said.

The agency’s nine-member board consists of six Cedar Rapids City Hall representatives, two Linn supervisors and a Marion representative.

Cedar Rapids council members Chuck Swore and Justin Shields, both advocates of project labor agreements, nonetheless Tuesday recounted the city of Cedar Rapids’ seven-month standoff with Branstad in 2011, during which the Cedar Rapids City Council put a project labor agreement in place on its Convention Complex project only to have Branstad announce he would hold back $15 million in state I-JOBS funds from the project.

With the dispute dragging on and unions fighting Branstad in court, the city in June 2011 backed down and the local labor groups, which had signed the project labor agreement with the city, agreed to set the agreement aside. In trade, the city put in place a project labor agreement on the city’s hotel renovation project next to the Convention Complex, which is receiving no state funds.

“Every legal opinion I’ve had has said, ‘No, you won’t prevail,’” Shields, a Cedar Rapids area labor leader, told Oleson and the rest of the Solid Waste Agency Board.

Swore characterized the city’s unsuccessful fight with Branstad this way: “We got our hand slapped.” But Swore said the city has come up with other ways to try to make sure that mostly local workers, not out-of-state ones, work on city building projects, which is the central benefit of project labor agreements, advocates of the agreements, Oleson and Swore, said.

Swore said the city requires contractors to attend pre-bid meetings and the city breaks project bids into smaller bid packages as a way to give local contractors a chance to compete against big out-of-state ones. The city also requires contractors to operate a drug-free workplace and certify that employees have completed certain safety training and skill  training. As a result, local and area employees and contractors predominate on city projects, he said.

Oleson and Ben Rogers, a Linn supervisor and chairman of the Solid Waste Agency board, noted that Linn County has had five post-flood construction projects, all of which have benefitted from project labor agreements, they said. All five, though, were put in place before Branstad took office and issued his executive order.

Oleson called Branstad’s order “overly broad” and worth fighting.

Karmin McShane, the agency’s executive director, provided the board with legal opinions from the Cedar Rapids city attorney and an outside legal firm, both of which had her conclude that using a project labor agreement likely would mean lengthy litigation.

Board member Mark Jones, the city of Cedar Rapids’ manager of solid waste and recycling, said his reading of the legal advice to the board was to “be ready” for court. Jones noted that he has had served on the agency board for some 15 years, during which he has seen plenty of delay-causing litigation over, for instance, the siting of a new landfill.

McShane noted that the agency has been locked in litigation for 30 months in a dispute over the use of methane gas that is produced by the agency’s Mount Trashmore landfill next to the Cedar River near downtown.

McShane said the agency’s upcoming $14 million construction project, the biggest piece of which is a new Resource Recovery Center building, is positioned to use $850,000 in state funding. In addition, the state provides the agency with its operating permits, so the agency likely must follow Branstad’s executive order even if it was not receiving state funds, McShane said.

In the end, the agency board put the matter on hold for a month and told McShane to prepare to let bids on the construction project in June without a project labor agreement. The board can insert the requirement for a project labor agreement into the bid specifications next month if the board decides to do that, board members said.

This is a rendering of the city of Cedar Rapids’ new parking ramp plus skywalk over First Avenue East that will connect the ramp to the city’s Doubletree by Hilton at the U.S. Cellular Center complex, which will consist of the hotel and arena, both under renovation, and the new convention center, under construction next door. (Novak Design Group)

CEDAR RAPIDS — The city is preparing to start construction this summer on a new parking ramp across First Avenue East from the city-owned hotel and Convention Complex, a ramp that may be bigger and more attractive with more first-floor retail space and a faster elevator than planned if the city receives favorable project bids.

The city puts the estimated cost of the ramp at $10.5 million and the skywalk at $1 million. Bids will be opened on May 2.

In addition to the basic bids for the ramp and skywalk, the city is asking contractors to provide four alternate bids for additions to the basic project if the base bids are favorable and the City Council chooses to fund them.

The first add-on would provide a more-attractive exterior cladding on the side of the ramp that faces Second Avenue SE, a cladding that is part of the basic bid for the two sides visible to First Avenue SE. The fourth side, next to the Theatre Cedar Rapids building, won’t be noticeable.

The second add-on would add a seventh floor to the ramp. The basic bid calls for six floors and 460 parking spaces and the add-on would make the ramp a seven-story one with an additional 75 parking spaces.

The third add-on would provide for more first-floor retail space on the side of the ramp facing First Avenue SE than is called for in the basic bid.

And a fourth add-on would provide a faster elevator.

Sandy Pumphrey, building facilities capital project manager in the city’s Public Works Department, on Monday said that the “stakeholder” group advising the city on the parking ramp feels an attractive facade is an important part of a ramp located in a “prime” downtown spot. The group is hoping that favorable bid prices also allow for the seventh level to be added to the project, he said.

John Frew, the city’s consulting project manager on the hotel and Convention Complex projects, on Monday said cities often work to add some style to parking ramps in the heart of their downtowns by adding retail areas to the first floor and paying attention to facades.

“There is a range and it’s a combination of functionality and style,” Frew said. “This could be just nothing but parking from the first floor to the top. And you could walk right by it, and say, ‘That’s a parking ramp,’ because it’s unmistakable what they look like. … But it’s pretty unusual to build a parking ramp right in the core of the city that doesn’t have some design feature to it.”

Frew said the new parking ramp across from the hotel with parking dedicated to the hotel will better position the city, which bought the hotel from its creditors a year ago, to sell the hotel in the future.

Pumphrey said the city is still studying options to connect the skywalk from the new parking ramp to the rest of the city’s downtown skywalk system south of First Avenue East.

Revenue from parking is expected to pay much of the cost of the debt being taken on to pay for the new parking ramp, construction of which should be complete in the spring of 2013, Pumphrey said.

The city’s hotel and Convention Complex will be known as The DoubleTree by Hilton at the U.S. Cellular Center when the renovation of the hotel and attached arena and the construction of the new convention center next door is complete in 2013.

Another ramp

The City Council’s budget for the fiscal year beginning July 1 also includes funding of $12 million for a second new parking ramp, this one in the 600 block of Second Street SE in the vicinity of the new federal courthouse.

This ramp may have 595 spaces on six floors, but the final design is not complete. Construction is expected to be complete in the summer or fall of 2013.

The sun sets behind the Tree of Five Seasons sculpture along the river in downtown Cedar Rapids on Thursday, July 21, 2011. (Liz Martin/The Gazette)

The city-owned riverfront spot next to the First Avenue bridge that has been home since 1996 to the sculpture, the Tree of Five Seasons, is on the verge of getting a new name, Five Seasons Plaza.

Daniel Gibbins, the city’s parks superintendent, on Monday noted that tree and the park around it are in the process of a face-lift, funded by private donations, and he said those behind the renovation have suggested the park’s name change.

Gibbins called the park’s current name, Riverfront Park, “nondescript,” and he said the city’s Parks and Recreation Department is supporting the park’s proposed name change.

The city’s Parks and Recreation Commission will weigh in on the name change before it gets to the City Council for a final decision.

The creative forces behind the city’s Five Seasons moniker, the Five Seasons tree and the current tree and park renovation are Bill Munsell and Gary Anderson, colleagues at the former ad agency, Creswell, Munsell, Fultz & Zirbel Inc.

The two came up with the idea that Cedar Rapids had five seasons — the fifth to enjoy the other four — more than 40 years ago.

An area along Indian Creek is cleared to make way for construction of a sewer line reconstruction project near the Sac An Fox Trail on Thursday, April 12, 2012, in southeast Cedar Rapids, Iowa. The project is a joint venture among Cedar Rapids, Marion, Hiawatha, Robins and Linn County that will increase capacity in the main sewer line along Indian Creek that runs for some 16 miles. (Jim Slosiarek/The Gazette)

The letter “S” painted big and in pink on 28 mature oak and sycamore trees along the Sac and Fox Trail isn’t going to be sufficient to save most of them.

Instead, Cedar Rapids city officials on Thursday acknowledged that a contractor replacing a mile-plus-long section of what will be a 16-mile trunk sanitary-sewer line built along Indian and Dry creeks apparently “misunderstood” a contract expectation to take care to work around the 28 mature trees, each with a big, pink “S” on it.

Daniel Gibbins, the city’s parks superintendent, said most of the 28 trees will need to come down because the contractor, S.J. Louis Construction Inc. of Rockville, Minn., damaged the trees’ roots as workers cut a swath 120 feet wide through the timber along Indian Creek to prepare for the installation of a new, bigger sanitary sewer line.

A handful of the 28 mature trees identified for saving may survive, but “most just can’t recover from major construction damage at that age,” Gibbins said.

Rich Patterson, director of the Indian Creek Nature Center near where the first segment of the major, metro-area sewer project is beginning, said Thursday he was “incredibly frustrated” by the damage to the 28 trees.

“It seems like a pretty simple thing. If it’s got a big ‘S’ on it and you’ve been told to save the trees, don’t take it down,” Patterson said. “Why,” he added, “isn’t some city inspector watching this stuff?”

Dave Wallace, the project manager in the city’s Public Works Department, said Thursday that the contractor had been told to erect fencing around each of the 28 marked trees at the point where the tree limbs of each tree reached. However, the contractor “didn’t protect them,” Wallace said.

In a written statement released Thursday afternoon, contractor S.J. Louis Construction Inc. called the matter a “misunderstanding.” The company said the protection of and removal of trees was discussed “at great length” between bidding contractors and city officials at a pre-bid meeting, but the company said the need to protect trees was not specified in language in an addendum to the contract.

“We will continue to work diligently with the city of Cedar Rapids to rectify any misunderstandings,” the company said.

Meanwhile, the Nature Center’s Patterson on Thursday also questioned the need for such a wide clearing of trees and brush to get the new sewer line, a 60-inch-diameter sewer that is replacing a 42-inch one, in place.

“Why did they need to take so many trees down to dig a trench?” he asked.

The city’s Wallace noted that the $35-million-plus project is a necessary one, and it is a project years in planning and a joint venture of Cedar Rapids, Marion, Hiawatha, Robins and Linn County. The project will be built in 20 segments and could span 20 years, Wallace said.

Wallace said the sewer pipe is large and he said room for big machinery is needed to get the pipe in the ground.

“So there was going to be a wide path of destruction, and we communicated that pretty well,” Wallace said.

The city’s Gibbins pointed out that most of the trees that have come down for the sewer work were “quick-growing bottomland trees without a lot of value,” a characterization with which Patterson didn’t necessarily disagree. He said much of what came down had “low ecological quality.”

That was the reason the city made the effort to save substantial trees on the edge of the construction area, Wallace and Gibbins said.

Wallace said the city is meeting with the contractor to determine what compensation might be required of the contractor for destroying trees intended to be kept. The compensation may be monetary or it may involve the purchase and planting of trees, he said.

The $3.578-million construction contract for this piece of the project — called Phase 1 of three phases of Segment 2 of the 20-segment project — already calls for planting 150 new trees.

The city also hopes to find trail funding to move part of the Sac and Fox Trail to higher ground at the current project site, which extends south and north of Mount Vernon Road and is readily noticeable to motorists driving by.

“I can’t go to Hy-Vee or anywhere without people accosting me about it,” Patterson said of the cleared trees along the creek. “People are mad.”

Downtown Cedar Rapids showing Interstate 380 in lower right corner Saturday, May 30, 2011, in northeast Cedar Rapids. (SourceMedia Group News/Jim Slosiarek)

CEDAR RAPIDS — Costs to the city for basic infrastructure fixes are colliding with costs for flood-recovery work and those for not-universally-popular projects like the city’s hotel and Convention Complex in a way that will require the city to sell more new annual bond debt than any time in its history.

Even so, the City Council this week, without hesitation, unanimously gave the go-ahead to take on some $67 million in new general-obligation bond debt, which is significantly more new debt that the council typically takes on in a given year.

In each of the last three post-flood budget years, the city sold between $30 million and $33 million in new general-obligation bond debt, according to city figures.

Casey Drew, the city’s finance director, reported Wednesday that previous council action this fiscal year actually will make the upcoming bond sale even larger and put it in the ballpark of $86 million. That, he said, would make for the largest annual bond sale in city history.

According to Drew’s estimates, the proposed new bond sale will raise the city’s total outstanding general-obligation bond debt from the current $282 million to $341 million. The new total will bring the city to within 73.6 percent of its debt limit, a limit that is an amount equal to 5 percent of the value of property in the city. The city now sits within 62.25 percent of the debt limit.

The proposed bond sale will come in the form of multiple bond sales at once to raise revenue for a variety of projects. Much but not all of the debt will be paid back with revenue from property taxes over 20 years, and in some instances, perhaps over 30 years. However, revenue from the downtown hotel, slated to reopen in 2013 as a DoubleTree by Hilton, is expected to pay most of the debt payments for the hotel renovation while parking revenue is expected to pay most of the debt payments for a new parking ramp across from the hotel, Drew noted.

Drew said the largest amount of revenue, an estimated $37.5 million, from the upcoming bond sale will go for the renovation and acquisition of the hotel.

The $11.8 million to be spent for a new parking ramp at the Physicians’ Clinic of Iowa’s new medical facility and improvements in the city’s new Medical District will be paid for with the incremental increase in property-tax revenue that comes as a result of the new PCI investment and other new investment in the Medical District.

City Council member Scott Olson said that all of the spending for which the city is issuing debt had been approved previously by the City Council as it voted on the city budget. The vote in March on the budget for the fiscal year beginning July 1 was unanimous.

At the same time, council member Don Karr acknowledged, “These are large numbers.” But he added that the new debt needed to be seen in the context of the city’s 2008 flood disaster, which he said caused more than $1 billion in damage.

“I guess when you have a billion-dollar loss, you got to spend some money to come back,” Karr said.

Council member Monica Vernon agreed, putting the damage in the city in the $6 billion range.

Vernon said the new debt that the City Council is taking on will finance projects that the council has analyzed and endorsed over the last couple of years. Some of the revenue from the bond sales is needed for flood recovery work and some to support projects that will make Cedar Rapids better in the future, she said.

Mayor Ron Corbett pointed out that disaster funds coming to the city from the federal and state government has benefitted the city’s flood recovery greatly, helping to limit the city’s need to go into even greater debt as it gets back on its feet.

“Unfortunately, the federal and state governments don’t pay for 100 percent of recovery,” Corbett said.

In February, City Manager Jeff Pomeranz cautioned the council during his annual budget presentation that the city may need to raise the city’s property-tax rate a year from now to cover increasing debt payments.

The council’s budget for the fiscal year beginning July 1 did not raise the city’s property-tax rate, though residential property-tax payers on average will see a 4.5-percent tax increase in the city portion of their property-tax bill because of some property valuation increases and because of a change in a state formula that increases how much of a home’s value is subject to property tax. Commercial and industrial property owners will pay the same property tax to the city.

Where bond revenue will go

• $11.6 million: Basic infrastructure repairs and city equipment needs

• $37.5 million: Hotel renovation and acquisition

• $10.15 million: Construction of convention center

• $10.6 million: Convention Complex/hotel parking ramp

• $1.32 million: Replacement of Roosevelt apartments’ fire escape

• $11.8 million: New parking ramp associated with the Physicians’ Clinic of Iowa’s new medical facility and improvements in the city’s new Medical District

• $2.9 million: New riverfront amphitheater and renovation of the underground parking ramp on May’s Island and the new City Hall

Source: City of Cedar Rapids

Penford has said it wants to buy the 11-acre Riverside Park for a possible expansion of its 225-employee plant next door. The City Council decided Tuesday night to move in the direction of negotiating the sale, but not before each of the nine council members contributes to a list of questions and requests that it wants discussed at the bargaining table.

Pat Shey, Ann Poe and Monica Vernon said the city shouldn’t be quick to part with a park that has value to residents and their children and grandchildren.

“We do have a lot of leverage here,” Shey said. “… We have a say. We’re the seller and we get to put those conditions on.”

Vernon has said she wants Penford to address air-quality concerns that might come with any expansion of the corn wet-milling plant.

And Poe asked Tuesday night if an access road between the park and Penford will remain available to the National Czech & Slovak Museum & Library. That facility, which sits on the other side of the 12th Avenue bridge from the park and Penford, opposes the sale of the park.

Poe did say Penford’s offer “was nothing to sneeze about,” but she added that selling a park “goes against my grain.”

Don Karr, though, said the council needed to be careful in asking too much from a company as part of a sale of the park, which he said could result in the company dropping its offer and ending its expansion plans in Cedar Rapids.

“Are we going to set 500 things we want them to do to buy this piece of property?” he asked.

Chuck Swore, who along with Karr and Justin Shields has spoken in favor of the park sale to improve Penford’s expansion prospects, said the company has been open and forthcoming about its plans and its willingness to work with the city.

Mayor Ron Corbett and Kris Gulick have expressed an interest in the city keeping the title to the park until Penford has a clear expansion plan that it is ready to move ahead on. And Scott Olson suggested that the city give Penford a window of time to come up with an expansion plan, after which the city could withdraw its willingness to sell the park to the company.

“I want to try to eliminate the speculative nature of the project,” Gulick said.

Back in December, Penford announced it wanted to purchase the park next to its riverfront plant, saying it needed an area in which to grow if was to attract a partner to help it expand its bioproducts manufacturing operation.

In late February, the City Council sought proposals from entities wanting to buy the park, but only Penford submitted a proposal by the March 30 deadline.

City officials said Tuesday night that the purchase offer of $1,669,716 is enough to cover the appraised value of the 11-acre park and city right of way, repayment of grants the city has received for the park, and costs to replace and relocate the park’s amenities, which include a skate park and ball diamond.

Penford’s has said it does not now have clear expansion plans, but it believes that the purchase of Riverside Park will lead to a plant expansion. Such a move, company officials project, will mean $30 million to $100 million in new investment, 20 to 150 construction jobs and 20 to 50 more plant jobs.

A vote on the sale could come in June, Corbett indicated.

Aerial of Penford, Cedar Rapids, Ia., 9/99. (Sourcemedia Group)

The City Council approved a $1.36 million construction contract for the work with LL Pelling Co. Inc. of North Liberty on Tuesday night. The pre-bid estimate of the project cost, which is being shared by the city and state, was $1.43 million. The construction is expected to take 90 working days.

Also Tuesday, city officials said crews should be done working on First Avenue East from 40th Street north to Collins Road by the end of June. One section of the avenue is being elevated to match the elevation of the completed sections.

Officials also said the city has scaled back a plan to reconstruct First Avenue East from 27th to 40th streets, beginning in 2014. That plan had called for a median in the avenue to help increase traffic flow by reducing turns, but businesses affected by the proposed change had objected.

Cedar Rapids City Hall on May's Island as seen from the Cedar River on July 1, 2004. (Sourcemedia Group)

CEDAR RAPIDS — The flood-damaged Veterans Memorial Building on May’s Island here isn’t home to City Hall anymore. City Hall has moved down the street, into the former federal courthouse, at 101 First St. SE.

It is a move with an upside, though, that is allowing the city’s Veterans Memorial Commission, which has the central responsibility for the renovation of the Vets building, to rethink the facility’s use, making the veteran a center of attention.

In that regard, commission members Tuesday night expressed support for a proposal to use a small piece of the building as a center for physical therapy and physical fitness that has the capacity to care for disabled veterans new and old in a way that other therapy and fitness centers can’t.

Commission members talked about the issue that a fitness and therapy center in the Veterans Memorial Building might compete with existing centers, but commission member Pat Reinert thought the center that the commission was considering could complement what is available in the city and not compete with it.

Commission member Jerry Ziese reported that he is meeting with Department of Veterans Affairs officials in Iowa City this week to see if they might be willing to relocate their physical therapy satellite office in Cedar Rapids into the Veterans Memorial Building as part of a plan for therapy and fitness center. Commission member John Powers noted that the existing satellite office is much too small.

Ziese and Mike Jager, executive director for the commission, are working with Shane Lamson, a Navy veteran of the war in Iraq, who is looking to create a startup business called Vet and Family Fitness. Lamson’s idea is to lease space for his business in the Veterans Memorial Building and provide the therapy and fitness center that the commission is seeking for the building.

Jager said the first phase of the building renovation is expected to be complete this fall, at which time some room would be available for a fitness center.

Lamson said his idea is that veterans, families of veterans and general members of the community could use the Veterans Memorial Building facilities with a sliding fee schedule that might provide discounts for veterans.

Jager said too often veterans in the Cedar Rapids metro area now must go to the VA hospital in Iowa City for services, and he said they will be able to get them more speedily once the proposed center at the Veterans Memorial Building opens.

An upstart company that surfaced in Cedar Rapids in 2011, secured support from local economic-development officials and won public incentives for two technologies that didn’t perform as promised has been told to return a $250,000 state grant and not to use other public aid awarded to it.

The Iowa Economic Development Authority has ruled that the company — once called AgSugar International and now Vertecra Inc., the travails of which were featured in a Gazette investigative story on Jan. 15 — is in default on its contract with the state for “non-compliance with (contract) covenants” and “material misrepresentation.”

In a letter that the company received March 26, Craig Block, the agency’s chief operating officer and general counsel, states that AgSugar International/Vertecra did not comply:
—-  With project performance obligations and the requirement to use award funds only for (the) project.
—-  With a stipulation that the contract not be materially changed unless approved in writing by (IEDA) before the change.
—-  With a requirement that the company promptly provide (IEDA) with written notice of any major changes that would impact the success of the project.

The letter concludes: “Due to the nature of this default and the impossibility of cure, demand is hereby made for full repayment of the award in the amount of $250,000. This notice also will prevent the claiming of any tax credits associated with this award.”

A small $17,000 piece of the incentive package — the whole package was worth an estimated $600,000 and included worker-training assistance — involved a local property-tax break from the city of Cedar Rapids.

The Cedar Rapids City Council intends to end its financial commitment to the project, City Manager Jeff Pomeranz said.

In response to the state action, Dan Kazanas, Vertecra’s chief operating officer, responded in writing to the agency on March 30. He disagreed that the company is in default on its contract and asked the agency to reconsider.

Kazanas wrote that the company had spent the $250,000 state grant before it signed the state contract in October for it and before it got the money in November. The money was spent on testing and related expenses on the two bio-based technologies specified in the contract, he stated. Those tests proved in September that the two technologies “were probably not viable” for the commercial market, Kazanas wrote.

The company is moving ahead on other bio-based projects, which he said the company earlier had told IEDA it would do. In the near term, though, the company plans to assemble LED lighting products in a new building that the company will lease at 615 J Ave. NE.

Don Ross, a Cedar Rapids builder and developer who has been listed as a partner with Kazanas and others in the initial AgSugar venture, owns the new building, the cost of which he puts at $800,000. He is upbeat about the LED-assembly venture.

The LED venture is with Hybra Energy Corp. in Traverse City, Mich. Last week, Joe Thiel, Hybra’s managing director, said Hybra is “currently finalizing contract negotiations for the assembly rights” with Vertecra.

Walter “Skip” Emig, the AgSugar International/Vertecra CEO, was in Ross’ building late last week but declined to come out of the locked building to talk. Kazanas and Emig reside in the St. Louis area. Ross said Emig did not want to comment.

A Gazette story on Jan. 15 reported that company officials acknowledged they had determined in September that the two technologies that were the basis of the state award did not do what the inventor, former Missouri dentist Ted Lewis, said they would do. Company officials ended their relationship with the inventor that month.

The company’s application to the state for economic development help and the subsequent signed contract with the state specified the grant award was to help AgSugar International/Vertecra assemble those two technologies.

Tina Hoffman, IEDA’s marketing and communications director, said the agency’s decision to end its contract with AgSugar International/Vertecra came after a meeting with company officials on Jan. 30.

Economic development representatives from the Cedar Rapids Metro Economic Alliance also attended. The alliance and the Cedar Rapids Entrepreneurial Development Center helped AgSugar International prepare its application for state assistance.

Hoffman said the agency will review Vertecra’s letter of response to the demand that it return its grant money.

She added, though: “If you don’t follow the terms of the contact — that’s the standard we’re holding companies to — even if you mean well, that doesn’t mean that a contract got met.”

Cedar Rapids city employee Melissa Kopf (right) carries a bag of garbage as Alexa Greene (left), 9, carries an old tire and city employee Drew Westberg (center) carries another bag of garbage after they and other city employees and City Manager Jeff Pomeranz picked up garbage from the land under Interstate 380 near the former Central Fire Station on March 31 in Cedar Rapids. (Jim Slosiarek/The Gazette)

 City Manager Jeff Pomeranz surely doesn’t sleep in a suit and tie, but you wonder.

So it was no surprise to see him pull in last Saturday to clean up litter from a vacant lot wearing a dress shirt, albeit with collar open and shirt tail out. The members of his office staff, who were on litter patrol too, eventually convinced him to don the uniform of the day, a T-shirt promoting the Pomeranz-led City Hall crusade, CleanUpCR.

On this particular day, Pomeranz and his colleagues were doing their part for one of the crusade’s core initiatives, The City Manager’s 1 Bag Challenge.

In the course of an hour or so, Pomeranz, about five staffers and one of his employee’s young children filled up 10 aqua-green garbage bags — a signature of the 1 Bag Challenge — from the lot across Third Street NW from the flood-ruined former Central Fire Station.

The 1 Bag Challenge is one of several cleanup initiatives being promoted by City Hall’s Mr. Clean.

In addition, the city has reconstituted a bulky-item pickup program, which this year will be held May 12 at the Site 1 landfill, 2250 A St. SW, and will allow residents to drop off furniture, electronics, clothing, scrap metal and wood waste free of charge and appliances for $4.50.

Also, there’s an Interstate 380 litter cleanup set for April 28, and the city is holding a second annual neighborhood litter collection day on May 5. The city also is promoting its own Adopt-A-Road program.

Proof that Pomeranz’s crew had come to the right place last Saturday was the hundreds of pens scattered among the lot’s litter, pens that Pomeranz surmises washed away in June 2008 from the former Souvenir Pen business two blocks away.

“It’s very basic,” Pomeranz said of his 1 Bag Challenge. “It’s not something we had a consultant think up. It just came about through discussions with city staff. What if we challenged every citizen to pick up at least one bag of litter? What a great way for individuals and families to get out and help their community.”

Cedar Rapids City Manager Jeff Pomeranz picks up a pair of plastic bibs and other debris from a lot near the former Central Fire Station in Cedar Rapids on March 31. (Jim Slosiarek/The Gazette)

Pomeranz noted, too, that city street crews have been filling in cracks in concrete medians to prevent them from becoming weed-sprouting eyesores and the crews also will make sure grass medians are being mowed. He also said the city’s move to mechanized garbage collection, which requires uniform garbage cans, will cut down on the amount of garbage blowing around neighborhoods.

This kick on cleanup in some sense is coming from an outsider — Pomeranz is still relatively new to the city, having just passed the 18-month mark as city manager after a 12-year stint in West Des Moines.

An outsider often can see blemishes that longer-time residents of a place have stopped seeing.

From his first visits to Cedar Rapids in the summer of 2010, Pomeranz said he was struck by the amount of litter in the city.

“And then spending some time driving around, I saw some other things. These aren’t big visionary ideas. They’re just observations,” he said.

He said grass was too high in medians. Too many weeds and grass were growing up through concrete medians. The welcome sign coming into Cedar Rapids was broken, parts leaning against a fence. Many of the city’s bright green street signs had faded to white. And one of the Interstate 380 signs was still directing people to the downtown location of the Science Station, which relocated two years earlier after the 2008 flood.

“While it may seem minor as far as all the needs of the community, just as a new resident, I sort of noticed all this,” he said. “And I thought, in addition to what a city manager does as far as managing the city day to day, that I would make a commitment to cleaning up our city.”

A pedestrian walks past a pot of daffodils at the corner of Second Street and Third Avenue SE on Friday. The flowers are example of efforts to beautify downtown Cedar Rapids .(Jim Slosiarek/The Gazette)

Pomeranz said his cleanup campaign borrows a little from the “broken-windows” theory of community improvement that suggests that fixing smaller things in neighborhoods — broken windows, for instance — can cut down on larger problems like street crime and drug dealing.

Doug Neumann, executive vice president of the Cedar Rapids Metro Economic Alliance, said virtually no one in and around the downtown put cleaning up as a top priority after the June 2008 flood because there was so much else that needed to be done.

“Now all of a sudden we’re at the point in flood recovery where we’re hearing from citizens that things need to be cleaned up,” said Neumann. “Jeff’s right on the mark. We not only commend him for the effort, but are doing our best to pitch in ourselves.”

Linda Seger, president of the Northwest Neighbors Neighborhood Association, said neighborhoods like hers also are on board with City Hall’s cleanup focus, and she added that she likes that Pomeranz is working to get families involved in the programs.

“We think this new endeavor by the city manager will be an additional way to feel we are in control of our environment — from the little ones to our seniors,” Seger said.

Cleanup programs

• City Manager’s 1 Bag Challenge: Pick up a litter kit of mint-colored garbage bag and a pair of gloves at any Hy-Vee Food Store. Set the bag out at the curb when full with your Garby for pickup on your regular collection day. There’s no additional charge.
• Interstate 380 Litter Collection: 9 a.m. to noon, April 28. Meet in the parking lot at Sam’s Club, 2605 Blairs Ferry Rd. NE. Neighborhood Litter Collection: 9 a.m. to noon, May 5. Meeting places vary by neighborhood.
• Spring Large-Item Drop Off: 9 a.m. to 2 p.m., May 12, at the landfill, 2250 A St. SW.

According to a memorandum to the City Council, the offer covers the appraised cost of the 11-acre park and adjacent right of way. Penford would repay grants the city has received for the park, and wants that money to fund the relocation of amenities such as a skate park, baseball diamond and playground.

The council will take Penford’s proposal up at its meeting Tuesday. The proposal was the only one submitted during a monthlong period in which other entities were given the chance to bid for the park.

The council could vote to direct the city manager to negotiate with Penford on the terms of a sale. Those terms would then come up for a vote in May. The council would then vote on a development agreement in June.

Penford first announced it wanted to buy the park, which is next to its corn wet-milling plant, in December. The company has said it hopes to attract a partner to help expand its bioproducts manufacturing operation.

The staff and board of directors at the National Czech & Slovak Museum & Library, which sits on the other side of the 12th Avenue Bridge from Penford and Riverside Park, came out against Penford’s plans after a series of forums in January. They say expanded industrial operations would harm the museum experience.

In its written proposal to the city, Penford says Riverside Park would continue to operate as a park until the company identifies a “definitive” project. The company would construct an aesthetically appealing wall on the southern and western boundaries of the development site, retain as many existing trees as possible and locate new industrial buildings as far from property lines as possible.

In addition, the company says it would make a commitment to work with the city to incorporate plans for flood protection and a riverfront trail.

The effort has met with some success: Among 228 applicants for police officer this year, 16, or 7 percent, identified themselves as a minority in a voluntary applicant survey, according to department statistics. The 16 consisted of nine African Americans, five Hispanics and two Asian-Americans.

A year ago, 10 of 221 applicants, or 4.5 percent, identified themselves as a minority. Among the 10 were five African Americans, three Hispanics, one Asian-American and one American Indian.

However, getting from applicant to Cedar Rapids police officer is no easy task.

Police Capt. Bernie Walther on Wednesday said the department anticipates it will hire only five or six new officers this summer from the applicant pool that started at 228. Last year’s hires numbered nine, including one minority, a female Hispanic, he said.

The department currently includes four African American officers, two Asian-Americans and one Hispanic.

As part of this year’s hiring effort, Walther said he talked with Chad Simmons, executive director of the non-profit Diversity Focus in Cedar Rapids, to see what the department could do to increase minority applicants.

The department then sent recruiters to historically black colleges with criminal justice programs in Tennessee, Kentucky and southern Missouri as well as to colleges in the Chicago area.

“We did get a good reception down there,” Walther said. “The real idea was to make those contacts with college professors and department chairs and say, ‘We’re interested.’”

The college departments were impressed with the salaries that police officers in Cedar Rapids make, he noted.

Walther said the department’s message at every college is the same: that students can’t wait until their senior year to stop smoking marijuana, getting picked up for drunken driving and losing their driver’s license and expect to make it through the police application process. An applicant in Cedar Rapids, for instance, must not have smoked marijuana for 24 months to qualify for hiring. An applicant must wait three years after a drunken-driving charge.

Walther said the Cedar Rapids department has put an added emphasis on minority hiring because minorities are underrepresented on the department and because the department is seeking to obtain national certification through the Commission on Accreditation for Law Enforcement, which requires a department to set goals on minority recruitment.

“I feel encouraged,” he said with the slight uptick in minority applicants. The department now will review if and how minority applicants might have fallen out of the competition that is getting from 228 applicants to five or six new police hires.

Diversity Focus’ Simmons on Wednesday said his organization supports the Police Department and wants to help it find a way to have a diverse applicant pool.

“The thing we want to focus on is the applicant and interview process and what we can do to make sure the candidates are prepared,” Simmons said. “There are a lot of different ways for someone to get tripped up.”

Simmons said historically black colleges in the south attract students from all over the country, and students there very well might have grown up in the Midwest and would be attracted to a police job in Cedar Rapids.

Of this year’s 228 Cedar Rapids police applicants, 55 were disqualified because they did not meet minimum requirements. Some of those were rejected for recreational drug use in the last two years, Walther said.

A total of 172 were invited to take the department’s written test. Forty did not show up for the test, three withdrew before the test and 28 failed it. Another 26 failed the subsequent physical agility test.

Forty-seven applicants are currently continuing in the application process and undergoing polygraph testing.

In the end, Walther expected that the city’s Civil Service Commission will select 10 candidates for the hiring list and another five for a backup list. The list is in effect for a year.

The makeup of police departments can change, Walther noted. He remembered a time not so many years ago when the Cedar Rapids department had only a few females among its numbers. Today, 31 of the 203 officers are women, he said.

People watch as houseboats in the Ellis Park Harbor are tipped from their moorings by the rising flood waters of the Cedar River on Thursday, June 12, 2008, in Cedar Rapids. (Jim Slosiarek/The Gazette)

CEDAR RAPIDS — The city’s efforts to recover from and protect against a repeat of the 2008 flood took big steps forward Tuesday on the federal and state fronts:

• City Hall learned its nearly two-year pursuit of $13.8 million in federal disaster payments for the city’s flood-ruined hydroelectric plant at the 5-in-1 bridge has paid off.

• The Iowa House, on a 76-23 vote, sent to Gov. Terry Branstad a funding bill to help communities like Cedar Rapids build and repair their flood-protection systems.

The governor “has given no indication” that he opposes the legislation, said Mayor Ron Corbett.

“We should celebrate the fact that we were able to get the Legislature, in such a bipartisan way during an election year, to pass legislation that helps out Cedar Rapids .., (and) the whole state,” Corbett said.

The state legislation, which was previously approved by the Senate and in large measure designed by Cedar Rapids city leaders, establishes a program that allows communities with local matching dollars to tap into the incremental increase in state sales tax collected in their communities for use in fixing or building flood protection systems.

Corbett and other city leaders hoped to obtain significant state dollars through the funding mechanism to help the city build flood protection on the west side of the Cedar River to go with the Army Corps of Engineers’ plans and expected federal funds to build flood protection on the east side of the river.

However, voters in Cedar Rapids turned down a ballot measure to extend the city’s local-option sales tax for 10 years to provide local matching funds, which are particularly needed for west-side flood protection.

On Tuesday, Corbett said Cedar Rapidians didn’t turn down flood protection on March 6 so much as they turned down using revenue from the local-option sales tax to build it.

Now, the city will have to look how it might use other city funds to access money from the state program approved by the Iowa Legislature. By way of example, Corbett imagined that the city could look to commit a large portion of the $3 million in revenue it takes in a year from traffic enforcement cameras for 10 years to use as matching local funds to qualify for state dollars.

The legislation passed by the Iowa Legislature, Corbett said, “puts the city within range” of seeing east-side flood protection. At the same time, he said the city will not stop working to find a way for west-side flood protection.

FEMA appeal

Corbett also cheered the news Tuesday that the city’s second appeal of the Federal Emergency Management Agency’s denial of disaster payments for the hydroelectric plant had succeeded after a review at FEMA’s headquarters in Washington.

The central point of dispute over the city’s hydroelectric plant, which was disabled at the time of the 2008 flood, was whether the city, in fact, had been reviewing options to repair the plant at the time of the flood.

In its second appeal to FEMA headquarters, which was filed last May, the city was able to show that it was “moving in the direction” of fixing the plant when the flood hit, Michael Cappannari, external affairs officers at FEMA’s regional office in Kansas City, Mo., said Tuesday.

Joe O’Hern, the city’s flood recovery and reinvestment director, said the city now will talk to FEMA about how it can use the $13.8 million in disaster money.

The option most discussed by the city in the past has been to use the funds for an alternate improved project rather than for restoring the hydroelectric plant. The city can use 90 percent of the funds if it chooses the option of an alternate improved project, O’Hern said.

Corbett noted, however, that the city continues to have key appeals in front of FEMA with some $50 million at stake. The disputes involve money the city has paid for repairs to the incinerator at the city’s Water Pollution Control plant, funding for a new incinerator and money the city has paid for debris removal from the Sinclair meatpacking site.

“We still have several unresolved FEMA issues, so let’s not get ahead of ourselves,” the mayor said.