While you were away…..

I typically would not use this blog for a local issue, but this is one that deserves attention.  The community where my business is located is about to borrow $11 million to buy 60 acres of property.  Here is why everyone needs to keep an eye on all levels of government, not just the state and federal.


On August 10, while most North Liberty residents and taxpayers were enjoying their summer vacation, the North Liberty City Council voted to authorize the issuance of $20 million in bonds to fund (among other things) the purchase of 60+ acres of land off of Penn Street, purchase land for a new City Hall and continue the Highway 965 project.

 Why is this significant? For several reasons, but most importantly, it will result in an increase in your property taxes.  As yet, that amount has not been determined, but as everyone who owns property in Johnson County, Iowa knows, the property tax burden on property owners whether it be residential or commercial is staggering.  And at a time when the taxpayers have had to tighten their financial belts and live within their means in a delicate economy, the City of North Liberty has chosen to live beyond their means  and bring an extra $20M of debt upon the residents and taxpayers of this City.

The purchase of the 60+ acres of land just south and east of the Penn Street/I380 intersection will be divided up and up to 20 or so acres will be sold to the University of Iowa Community Credit Union to build their 100, 000 square foot service center.  But rather than purchasing the land outright, the City has offered a financial incentive to the UICCU.  They will sell this 20 acres to them for $1 (one dollar). The $ 25 million building that will be built by 2013 will be on the land purchased by the City –and the property taxes for the building will go to pay off the bonds to purchase the land.  Part of the bond debt will have to be paid by an increase in property taxes with the rest from TIF.   The UICCU building will be put into a TIF (Tax Increment Financing) district.  The City of North Liberty will use most of the estimated $600,000 in property taxes from this building toward paying off the debt incurred by the bonds-while the Clear Creek Amana School District, Johnson County, and other taxing entities will not get their fair share of this property tax until the bonds are paid off—probably 10 or so years into the future.

The mayor and city administrator have touted that this facility will employ 400 people.  Wow—public debt to create jobs!  Where have we heard this before…oh yeah, the federal stimulus bill on 2009—you remember the one that would keep unemployment to under 8% or the massive I-Jobs program from the State of Iowa that will have Iowa taxpayers paying off the bonds from that to the tune of $55M per year for the next 20 or so years—with no real permanent jobs to show for it.   In the letter that I received as a member from UICCU, it was explained that over the 30 years that they plan for this facility to be in operation that there could be as many as 400 jobs created. Quite a bit different from what Mayor Salm and City Administrator Heiar would lead you to believe. 

 When I contacted some North Liberty council members, I was told that this property is currently zoned for a high density multi-family housing development.  Nothing has been proposed, however by rezoning it for a commercial type use that would eliminate any future multi-family housing from being built at this site and adding more to an already stressed infrastructure and the crowding of North Bend Elementary School.    My question is why in the “multi-family capital of the Midwest” was there even any thought to adding more multi-family zones?  And if you do not want the multi-family built there, then put a moratorium on multi-family development until the infrastructure can support it.  Or better yet, do not allow for anymore multi-family land use in the City of North Liberty.  Many of the current council members as well as the Mayor campaigned against more multi-family housing during their campaigns. What happened there?

But what about the other 40 or so acres of this parcel?  The city would market it and sell it off for future commercial development and the proceeds will go to pay off the debt from this bond sale. So, the city will then be in the commercial real estate business, competing with those who have commercial property (including myself) for sale.  I wonder if they will sell those parcels off for $1 as well? 

I applaud the UICCU for their investment in the service center.  It is obviously needed and I congratulate them for their success in this economy. However, if they can afford to build this building, why do they need the “economic incentive” as described by Jim Kelly, UICCU Senior VP on Marketing as quoted in the August 11 issue of the North Liberty Leader at the expense of the already beleaguered North Liberty property tax payer?

 In May, 2009, over 700 North Liberty residents voted in the local option sales tax election on whether to add 1 cent of retail sales tax in North Liberty for the purpose of expanding and improving Hwy 965.  It lost by a wide margin of 61% against to 39% for. And yet this council has gone ahead and as a part of this bond issue will assess a tax anyway—on the property owners of North Liberty for what many believe to be an overreaching and ill-conceived plan.   What part of”No” does this city administration and council not understand?  Sadly, when the municipal elections were held in November, 2009, less than 5% of the registered voters, fewer than the number that showed up at the polls for the sales tax referendum took the time to understand the issues and candidates to cast a ballot in the election for city council and mayor. 

 While the grassroots movement to change the Federal government continues to gain steam, this must trickle down to the local governments as well.  Municipalities, counties, school districts and states need to have their insatiable revenue appetites restrained just as much as the Federal government.  It takes attention and just a small amount of time. If the Council chambers had been filled the night that this vote took place in North Liberty, there may have been a different outcome.  This council and administration will keep on this path unless and until residents of this City voice their displeasure. 

 As the past president of the North Liberty Development Group and a longtime business owner in this community, I have been a proponent and supporter of the city of North Liberty. But enough is enough.  I welcome the UICCU service center to North Liberty, but not at the expense of the North Liberty tax payer.


1 Comment

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One response to “While you were away…..

  1. NL Taxpayer

    This is a great article. It describes how current “economic development plans” screw the businesses that have been here for years and employ local people for years in favor of new businesses that are expanding. It’s always a lose-lose game when municipalities get a gun put to their heads while “competing” for businesses to locate in their towns. Regionalism can’t be promoted when cities are screwing their neighboring cities. We got burned on Rudy’s Bakery, then got burned when we gave a bunch of “economic incentives” to Heartland Express of Iowa City (they already owned the land but didn’t tell city leaders that while holding their own gun up to our heads).

    I wonder if NL would buy Fesler a bunch of land if she wanted to expand her business. That’s the real test.

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