The Clinton Herald, Clinton, Iowa

January 23, 2014

No urban renewal plan means 'economic suicide'

By Brenden West Assistant Editor
The Clinton Herald

---- — CLINTON — While the city continues to contemplate the urban renewal plan regarding the rail park west of town, Clinton's planning committee discussed details in the 17-page document Wednesday that may have been overlooked when it was discussed by council members more than a week ago.

The Lincolnway Industrial Rail and Air Park Urban Renewal plan has gone through several revisions since it was first conceived in 2006. Part of those revisions have pertained to changes to Clinton that have taken place over the last eight years. Now, one important state-wide update has forced the plan back in front of city leaders.

"Any urban renewal planning and any use of tax increment financing changed for the state of Iowa," said City Administrator Jessica Kinser before seven committee members. "It stated that you cannot use tax increment financing for any specific project unless it is stated in an urban renewal plan."

Cities establish urban renewal plans so that outside businesses looking to locate within a municipality will have a glimpse at what the city has to offer. In Clinton's case, the rail park has 259 acres of city-owned property and 212 acres of property owned by the Clinton Regional Development Corporation to showcase. Forty-six acres were already purchased by two outside companies: RAIL.ONE and Nevada Railroad Materials. Development agreements with both businesses are in the process of being finalized.

Tax increment financing (or TIF) is a mechanism that dedicates increments of tax revenue within certain districts. This mechanism allows cities and developers to finance debt that pays for a given project.

Ever since Iowa Legislators reexamined the tax increment financing code, city's wishing to enter economic development deals such as those involving the Clinton, RAIL.ONE and NRM need to specify their intents to utilize TIF within an urban renewal area. In the case of the latest Urban Renewal Plan draft, Kinser said six public improvement plans not to exceed $25 million were also specified, although the city hasn't committed any dollars toward financing those projects.

Two pages later, the draft specified the cost of urban renewal projects at the rail park won't exceed $53.6 million. That eight-figure sum also doesn't commit the city to any spending, Kinser said.

"I understand that there are some scary numbers here that might make you hesitant to approve this plan, especially when you do see a number as big as $53.6 million," Kinser said to the committee. "This is not committing the city to do any of those. It's simply stating that there's authority to do these, but all future actions would have to come back to counciling."

In light of those changes in law and the current presentation to the city, planning committee member Bob Allmendinger said not approving an urban renewal plan would be "economic suicide."

"It needs to move forward," he said. "The whole aspect as far as getting businesses to come to municipalities or states, you have to have the plan in place."

The committee unanimously recommended the plan for approval by the city council. A public hearing regarding the plan will take place Feb. 11.

If the council approves of the plan, Kinser said the city will be able to move forward with its TIF agreements with the two rail companies slated for the rail park, as well as others that may come down the road.

Allmendinger acknowledged the complexity of the agreements and development incentives can make the current proposals difficult to digest.

"I think it's an overall lack of understanding," he said. Regarding the large figures in the plan: "The dollars are not being spent. They're just being estimated. The other side of that, if we don't do this, this is the lifeblood of the community for the future."