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Estherville City Council Officials debate, approve Urban Renewal Plan

Hood, others question plan

July 4, 2018
Amy H. Peterson - Staff Writer ( , Estherville News

The Estherville City Council on Monday tackled an amendment to the city's urban renewal plan before approving it. The plan calls for the city to use not more than $1.2 million to finance a grant to Estherville Area Growth Partnership.

Ward 1 council member Cindy Hood questioned the feasibility of building on the now 42-acre parcel recently purchased from Joe Greig, near the wind turbine for Iowa Lakes Community College. The site has hills, and has already received interest in and an indication to move forward from the management of a federal government project.

"Are you confident, when you talk to prospects, that it's buildable?" Hood asked city administrator Penny Clayton.

Clayton replied that she was confident the land would work for its intended purpose.

Hood said, "I question the urban renewal plan. What is the most recent update on the [plan]? Have we amended the urban renewal plan to fit with the Chapter Code 403 for the state of Iowa?"

Hood said the city really needs to revisit the plan to lay out what part of the city currently is designated as slum or blighted.

Clayton said the city's particular plan centers on industrial growth, not residential growth at this time.

Hood said, "I see where it talks about industrial growth, and I firmly believe that is needed. But as a city we need to go back and look at the plan as a whole."

While she was talking, council member Dave Seylar, sitting next to Hood, suggested the full meeting was not the time to discuss the matter.

Clayton began to respond, and Hood interrupted.

"You're getting paid to discuss. [The meeting agenda] says discuss, so we need to discuss. We have a problem in this city and it's urban renewal. Coming in and going through an agenda, voting on it, then walking out 15 minutes later is not going to fix the problem," Hood said. Hood added that her concern was that the plan she saw was dated 1989.

Clayton said, "The original plan was done in 1989. We utilized the foremost expert in [tax-increment financing] law; Bob Johnston was our counsel for all of the documentation related to urban renewal and TIF proceedings, and I am quite confident that we are completely up to date on everything that needs to be done. That doesn't mean we couldn't go back and review everything we've done to date and make changes, and we'd do that in amendment form."

Several members of the community were present for the meeting, most with concerns about the approval of the guaranty document, guaranteeing the loan by the Estherville Area Growth Partnership from Northstar Bank for up to $225,000 to build a spec home to go in Meadow Subdivision.

Officials have said businesses have passed on locating in Estherville because of a lack of housing in the range of $200,000 and up for managers and others earning $75,000 and up. Many of the houses for sale in Estherville are older or have a single bathroom or otherwise are not what those relocating to the area want to buy, officials have said.

Hood said she compared three houses in the $200,000 range with the spec home and found each had more square footage and more land than the spec home will have.

"I've looked at the spec home. It's an absolutely beautiful house. I think it is a phenomenal idea. I like the idea, but I think the city will have to pay for it. I don't think it will go for $225,000. I don't think it's a good idea for the city to be a cosigner for this," Hood said.

Hood also pointed out that the urban renewal plan and tax increment financing documents did not give the city permission to use that method to build high-end housing for the area. Hood asked what would stop someone from seeing the spec home then making their own changes to the plan and independently buying a similar home from Green Acres, purchasing land, setting down a slab or basement, and getting delivery of their own home.

Economic development manager Lyle Hevern said, "There's nothing that would stop somebody from looking at our house, then going to do it themselves. Then we'd have another house built, and then we'd hopefully still have the spec home to sell to somebody else."

Hevern said meetings with local realtors have come up with mixed results with some saying the Partnership would be unable to find a buyer, and others more optimistic. Hevern said local industries and prospects coming to town have said the difficulty in finding homes is a factor in being able to hire people to come to Emmet County.

Hevern said he asked now-former president and CEO of Avera Holy Family Hospital, Dale Hustedt, whether the hospital hires personnel coming from outside the Estherville area looking for a house in that price range, and Hustedt, according to Hevern, said they would hire 4-5 each year. At GKN, Hevern said he was told there would be 1-2 more in a given year. Hevern said the Estherville Lincoln Central school district has said, "We really need to do something in our housing area."

The school district said they hire someone from out of town who then cannot find a home, and consequently they live out of town and commute, Hevern said.

Hood said, "I'm very concerned about this house and the taxpayers having to buy it."

Eric Olson said, "My original point was objecting to the city using taxpayer's money to compete with private enterpriseif someone had come to me to say, 'we will pay you $225,000 to build a stick-built house, I would have signed up in a New York minute. The problem with a spec house is that we have to carry it."

Olson said he had worked with the hospital when a doctor came to town. The doctor rented one of his two spec houses at the time for two years, and then they sold it at a loss. Olson related another loss he experienced on a spec house.

"If you're doing a spec house and guaranteeing the contractor gets paid, anyone would jump at that chance," Olson said.

Council member Brandon Carlin said, "One of the reasons I went [to the at-large council position vacated last year by Larry Anderson] was so that if I found the right opportunity that struck me, I could move within the city limits. One of the last things I do when we look at a house is I go out on the front step with my wife, and I look down the block this way, and down the block that way, and I determine how far it is before I see trashy-looking homes. That is the last consideration before I don't move. I haven't moved. I have lived [in my home] for fourteen years."

Clayton said, "When we are being told that companies are unable to grow because we have a lack of adequate housing, and they can't attract and retain their employees, because we have a lack of suitable housing, we have to respond."

Clayton cited Iowa Lake Community College, GKN, Redwood Farms, the ELC Community School District, and other employers that have provided feedback on the housing situation.

Seylar said at $150 per square foot, a builder cannot build a lower-priced home.

"The houses that were built in the 1950s and 1960s, the people in their 30s and 40s don't want that," Seylar said.

The smaller size of older homes with single bathrooms and single, detached garages are not what buyers want.

"If they can't afford [what they desire in a home], they will settle," Hood said.

Carlin said, "I think this should be a go. None of us has a crystal ball to say 'it will work' or 'it will not work.'"

Hood raised the question of conflict of interest among council members who are also involved in housing and building projects in the city, and requested the city council re-vote on the spec home guaranty resolution.

Hood said, "I hesitate with this, because I don't know that it's legal to do a house that's not low or moderate, but I'm not going to ask the lawyer [city attorney Jennifer Bennett Finn] because that would also be a conflict of interest."

Seylar said, "In a small town, it's hard to not have anybody involved with anything."

Hood said, "But you should recuse yourself if you have a possibility of having a conflict of interest."

Carlin took the lead in the discussion saying, "If we're going to have the re-vote, let's do it."

Seylar presented the resolution again, with council member Roger Guge abstaining and Hood voting against the measure. Guge's abstention presented the only change from the first vote.

In other business, the council approved ten fireworks permits within the city limits, and set a public hearing for a resolution to take action on issuing up to $840,000 of tax increment bonds in connection with the federal government manufacturing project. That public hearing will take place at the council's next meeting.

The next meeting of the Estherville city council will take place Monday, July 16 at 5 p.m. in the council chambers of city hall.



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