The Clinton Herald, Clinton, Iowa

May 22, 2013

Railport: Clinton, CRDC work on future process

By Katie Dahlstrom Herald Staff Writer
The Clinton Herald

---- — CLINTON — With the first rail-served tenants moving in, officials with the city of Clinton, McClure Engineering and the Clinton Regional Development Corp. met Tuesday to discuss the future of the Lincolnway Railport.

During the work session, which was held at the Ericksen Community Center on Tuesday afternoon, officials with the three entities identified several objectives they would like to work on in order to foster growth and development in the railport.

The rough estimate of the potential $60 million in future costs the city faces to continue in the railport development was a sticking point before the group started discussing the objectives.

The future development costs include around $25 million in future land purchases, $10 million for roadways, $10.5 million for water and sewer, $3.2 million for rail and the $6 million the city owes the county for its participation. These figures are rough estimates, Finance Director and interim City Administrator Jessica Kinser told those who attended the meeting.

Kevin Bailey, a transportation engineer with McClure Engineering, the firm the city hired to coordinate railport projects, explained the numbers don't take into account other funding such as grants, sale proceeds and tax revenue the city would receive once companies locate in the railport.

"Without that other side of the ledger, it looks really scary," Bailey said.

The potential costs of the city's future participation also shaped a number of the objectives.

First, the group agreed it should investigate the water options for parcels in the railport and a water supply plan should be created by Sept. 1.

Finding an equity partner that would financially support the railport was the second objective identified. The equity partner would partially bankroll the development for a percentage of ownership in the railpark.

Former CRDC Chairman Bruce Christensen said he and former CRDC President Steve Ames met with potential equity partners a year ago, but at the time the railpark was not ready to attract one, but it is now.

"It's all going to come down to return," Christensen said. "If we can demonstrate a return, that money's out there."

Finding an equity partner would be under the CRDC's direction with an estimated time frame of three to six months to find one.

The group also said looking at future land acquisition, developing a strategic plan and certifying the site for development are future objectives.

Completing a corridor study for the area is also a priority, with that duty falling under McClure and the city to complete in three to six months.

The group also noted the absence of any county representation at the meeting. Mayor Mark Vulich explained that right now the county is acting solely as lender to the city because of a 28E agreement in which the county agreed to loan the city $6 million for the railport.

Attorney John Frey, who serves as the city representation through the RAIL.ONE sale, said he would like to address the county's role in the railport.

"We've got some immediate things we need to work out with the county in terms of how much of the sale money are they going to be expecting to take and longer term, what role are they going to play as a participant in future development. Also, their land-use controls in the vicinity of the railpark are all very important," Frey said.

The city will work with the county to determine what part the latter will play in the railport.

Overall, members of the three entities recognized that communication among themselves is crucial to the development going forward.

"As prospects come in, they're going to come in to the CRDC. The CRDC, because they're a private entity, has the ability to keep their conversations with those prospects private. Yet, we have to be able to respond from the city side to know whether you're going to be able to get a deal put together," Bailey said.

He suggested forming a quick response team that would include members of the CRDC, City Council, city staff and McClure Engineering.

"There's so many things that have to be discussed quickly and privately. Ultimately, it all has to come to a council meeting where it's open and the entire public and everybody, the entire world, knows what's going on, but through those negotiations you can't do that in public meetings," Bailey said.