Regarding: City purchase of the Ihle property in the city of Huxley and potential commercial development.

Project Status and Basis for this process:
The following questions were raised or offered by citizens at the public hearing, after the meeting or in conversations since the public hearing.

We believe it appropriate and responsible to respond to all in a written manner and make it available to the citizens in the area of the development and others within the community.

1. Why is the City of Huxley buying property and is that a good use of taxpayer funds?

Currently there is very little commercially zoned ground available for commercial development along Highway 69; ground zoned commercial and ground available for commercial development are two different things.  Purchasing this ground allows the City to make ground available to potential commercial developers.  City ownership allows us to place conditions on its use as the Council sees necessary.  Community survey results indicate that citizens feel a grocery store is needed.  This is an attempt to address the items stated in the survey that citizens believe area high priority.  Through this purchase, the City of Huxley is attempting to make commercial ground more affordable and available for this type of development. In addition, the school district, the Council and the City’s Comprehensive Plan are all in agreement that commercial and industrial development is needed more than additional housing.  This property affords the Council the ability to work with developers to bring commercial development to our city.

2. What revenue sources are being used to finance this project and why? 

As far as the overall ground development, TIF financing is one possibility or other tax dollars, through either a levy or abatement.  At this point, we do not know what the combination will be because we do not know what the overall project will entail.
 

3. Will this purchase allow the City to connect 5th Street back to Highway 69?

Yes.  Over the past two years City staff has reviewed several different options regarding this connection.  Until a final design is established for the development of this ground, options will be reviewed to determine which one will be best for the community and the adjoining residents.  The option selected must coincide with the City’s Comprehensive Plan.

4. We have a serious traffic problem at the intersection of Highway 69, Main Street and Oak Blvd isn’t this going to make it worse and what are we (the city of Huxley) doing about it? 

The City applied for a grant and received funding to cover a portion of the cost to have design work and construction done for traffic signals and turn lanes at the stated intersection.  The City  also received additional funding assistance from the Iowa D.O.T for this project.  The goal is to make the intersection safer for both the pedestrians and vehicles crossing at this location.  If access  is provided to 5th Avenue through this parcel of land, it will help reduce the amount of traffic coming from Slater and adjacent properties west of the city that currently access US 69 from the Main Avenue intersection.  In looking at this situation, the City Council and the Ballard School Board have worked together to have temporary signal installed.  The lights will be operational November 8th.

5. The residents along 5th Avenue have drainage problems. Will this allow something to be done about that problem? What? When?

This will depend on the extent of the project the Council approves and when.  The drainage issue currently exists along 5th Avenue and could be corrected with improvements to this parcel of land once it is developed.  With proper engineering and construction, the City’s goal is to correct this issue with this future commercial development project.  The drainage along 5th Avenue itself is not related to the Ihle’s ground, but could possibly be corrected as this ground is developed.

6. How will development of this property affect the residents on Lynnwood and Crestwood?

It is the intent and goal to minimize the impact by having this development be visually and land use compatible with the adjacent properties.  One potential impact could be that traffic along 5th Avenue may increase to a level similar to the level that existed prior to the disconnection with US 69.  Regarding drainage along the rears of the parcels on the northeast side of Crestwood Drive, with proper design and construction, a drainage swale and/or storm sewer could be constructed to handle the rain water coming from those adjacent properties as well as from the entire Ihle property.  This would depend on the final project as approved by Council.
 

7. Is it true that the City of Huxley plans to give the land to the grocery store owner/developer?

That option is available to be used to recruit a developer.  At this time, no plans or agreements have been drafted to support this possibility.  Staff is reviewing all options and reviewing what impact all options will have on the entire development.

8. Will property taxes be raised just for this property purchase?

No. 

9. How many lots do we (City of Huxley) propose to have in this project?

That has not been determined since there is nothing platted at this time.  It will depend on the configuration of the development and what is proposed beyond the grocery store.  Several concepts have been looked at and evaluated.  Nothing has been formally done for a preliminary plat at this time.

10. The role of city government is not to be a developer so why are we (the city of Huxley) acting like a developer?

The City has no desire to be a developer but we are interested in becoming a partner in the project.  If the Council elects to move forward with the construction of a building for the grocery store then the City may take the role of a developer until someone else steps into that role.  If there is someone within or outside of Huxley that wishes to participate in this development, we welcome them to contact us and share their ideas with the community.

11. Was the property available to other developers? Was it available as a single lot or a complete parcel? 

We are not sure if Mr. Ihle has discussed a sale with anyone else.  This ground has been zoned commercial for a while and no development has taken place.  In our discussions with Mr. Ihle, he wanted to sell the entire piece.

12. When will we be able to see some idea of the potential development schedule and design? 

Hopefully within the next 12 months. 

13. Why would it not be better for a developer to purchase and we (the City of Huxley) work with them on this project?

Presently, we are not aware of developers that would be interested in purchasing this ground, but ideally that is the City’s desire as well.  We have had discussions with developers about a project but the discussions have not been about purchasing the ground. The discussions that we have had were to find out if they are interested in developing.  The City of Huxley can facilitate a more cost effective development at this time.  If there are parties interested in purchasing the ground and working with a developer to achieve the desired project we would be happy to visit with them.

14. I was told that the City of Huxley would have more control over this project by buying the property. When you (the City of Huxley) have volunteer boards to oversee development and improvements this is not necessary. Explain. 

The Boards and Commissions are required to work within the ordinances that are in place.  These requirements may not totally address all issues.   If the City is directly involved in the development of this ground through a development agreement, covenants or some other measure, we can help facilitate an attractive entryway into our community from the north.  This vision would hopefully result in additional commercial, residential and other types of developments within our city.  The City also would assist in developing covenants for this ground to ensure this project is compatible with the adjacent ground.

15. There are plenty of development areas in the city of Huxley. Why are you the (City of Huxley) buying this property?

The prime commercial area in Huxley is presently along HWY 69 and the amount of ground available for commercial development is quite limited.  Even though land is zoned commercial, it does not mean it is available.
 
16. Who picked the site for the grocery store?

The site was selected based on its availability to the City, a committee comprised of local residents and also by the party interested in locating a store in Huxley.  Location is extremely important in commercial development.

17. Who is this possible grocery store? Are they a sound and growing company and will they be competitive? 

Hometown Foods is interested.  The owner, Lyndon Johnson, has stated they are competitive with larger stores such as Dahl’s, Fareway, Hy-Vee and others of similar size.  Past ads in local newspapers where his stores are located have been reviewed and they appear to be competitive with those larger stores listed above.  This is due to his business development philosophy based on service and low overhead though the use of development agreements with cities in which his businesses exist.  Mr. Johnson recently opened a store in State Center’s downtown.  He encourages people to look at his stores and their operations.  Hometown Foods has a web site available for review.  The website is located at www.myhometownfoods.com

18. The City has gotten involved with spending funds to bail out the HDC and purchasing the Graves’ property.   For what purpose did the City get involved with those projects?

The City got involved with the HDC (Huxley Development Corporation) to assist with Commercial/Industrial development within Huxley. The City has had a working relationship with the HDC for almost 20 years which has led to many jobs being created. The HDC has brought to the City a business park that has allowed for commercial and industrial development, including a medical campus.  At the time that the City assisted HDC, loans that they were applying for did not materialize as quickly as they had hoped.  Since the time that the City provided the assistance, the City has received payment for most of the funds.  Once HDC loans are finalized we will receive the balance, including all costs associated with providing the loan. 

Regarding the Graves property; the Graves family approached the City with a desire to sell the ground to the City.  This ground would provide the City possible future expansion of Centennial Park or present an opportunity for other types of development compatible with the surrounding area.  The price of the ground was well within the value of the ground.  The City did not pay more then what the appraised value of the ground.  Another option would be to sell the ground to a developer who is willing to develop the ground into something compatible with the area.  At that time, the City would negotiate reimbursement of our initial investment.  Many times a city will step forward to move something along in order to benefit the community in its entirety, and in such a manner to negate or minimize the risk exposure to the City.  Any development on this property must also be compatible with the City’s Comprehensive Plan.

19. It has been said that the City paid more then what the ground was worth.

Before proceeding with the purchase of the property we asked ourselves a few questions. Is the location feasible for commercial development?  Does it fit within the Comprehensive Plan? Besides the development of a grocery store, what other issues could we address?  When it became apparent that this ground positively answered our questions we had an appraisal performed by a reputable firm out of West Des Moines so that the City Council was in a position to negotiate a fair price.  The firm appraised the purchase value of the ground at $1.30/SF ($56,562/acre).  The City paid approximately $1.31/SF ($57,000/acre).  The ground is currently zoned commercial which is consistent with the Comprehensive Plan.

20. What has the City done in regards to project review and planning prior to the public hearings and thereafter in regards to this possible development.

The City Council and staff have looked at many possibilities in this process.  They have also looked at what issues may be created and what can be done to overcome them.  We have discussed drainage issues, we have discussed traffic and we have discussed how to make this development an attractive entryway point to the City. We have had discussions with interested developers and listened to their ideas.

A good architect, designer or even a potential home owner will develop many concepts and share ideas to see what will meet their goals and needs.  The concept plans presented by these potential developers are ideas and offer a picture of possibilities. As you have noticed, nothing has been mentioned regarding any decision being made nor has any preconceived plan been developed. 

We are looking at different proposals; how they will impact the adjoining residential areas as well as the community as a whole.   Many options have also been studied for a street extension from Highway 69 to N. 5th Ave.  No decision has been made but the interests of both the surrounding area and the overall community will be considered.