The Gazette covers City Hall, now a flood-damaged icon on May's Island in the Cedar River

A new policy on City Hall hand-outs: Is it ‘rigmarole’ or proof of a new day on the Third Floor?

In Brian Fagan, City Hall, Justin Shields, Pat Shey on April 2, 2008 at 2:45 am

The City Council ate lunch at City Hall on Tuesday to go over the details of a new economic development policy that the council and city staff members have been shaping for some months.

City Hall really hasn’t messed with formalizing any new economic development language since a couple of council resolutions back in 1996, Richard Luther, the city’s development operations manager, reported to the council at this week’s luncheon meeting.

The new policy is intended to put developers and builders on notice that City Hall isn’t just going to hand out local development incentives without having some questions answered. City Hall wants to see if the developer or builder is going to do a few basic things related to high-quality jobs, building the city’s tax base and building responsibly.

In other words, there are hoops to jump through.

Local development incentives are not entitlements.

The city has several special districts, called tax-increment financing (TIF) districts, where incentives can be targeted. But just because a developer is proposing a new project in an established TIF district does not mean that they automatically get incentives, City Manager Jim Prosser said.

All of this prompted council member Pat Shey to shuffle through the pages of the proposed new policy and wonder aloud if companies looking to locate in Cedar Rapids might find a lengthy economic development policy a swampland they don’t want to wade into.

What happens, Shey wondered, if Microsoft showed up and wanted to build something in Cedar Rapids and the first thing they encountered was some thick, now policy.

Would they think, “We don’t want to jump through this rigmarole?” wondered Shey.

It was vital that the council see the policy as a “tool,” not a final word, he said.

One important thing a policy does, council member Brian Fagan suggested, was to establish a process for city staff members and the council to better measure the value of a particular development.

Fagan recalled stories he apparently has heard of the old days at City Hall prior to 2006. Back then the city had a commission form of government with five full-time commissioner/council members, all of whom had offices on City Hall’s third floor. And as Fagan tells it, one option for moving something ahead was to shop it on the third floor, in search of three council votes.

“It’s no longer possible to walk the third floor to try to pick off three council members to get a project approved,” Fagan said.

That is the point, he said, of a detailed economic development policy.

Fagan allowed that developers still would be apt to work individual council members – now there are nine, and they are part-timers and most don’t linger around City Hall.

But he said developers should go to the city manager — his third-floor office is the one the parks commissioner used to inhabit — with questions, not to council members. Coming to council members, Fagan said, was bypassing the very economic development policy the council is trying to put in place.

Likewise, council member Shey thought projects and questions about them should be referred to the city manager.

Several council members, including Justin Shields, acknowledged hearing from some in the development community who have complained about what they say is a slow moving City Hall regulatory process.

At one point, Shields wondered if Prosser had ever worked in a place in which city staff retaliated against particular developers or projects, and Prosser said he would fire any such staffer as he expected the council would fire him if they learned he had ever done such a thing.

Fagan said the quickest way to quash “innuendo” and “whispering” is to direct matters to the city manager and his staff.

Prosser noted that the city is looking at streamlining how it handles development plats with the help of Alliant Energy efficiency expert John Helbling. But he applauded the city’s “turnaround time” on most development projects, calling it “enviable.” Often people try to compare Cedar Rapids with smaller cities, which he said aren’t as complicated and may not have the same standards as a bigger city like Cedar Rapids.

The luncheon session Tuesday began with the city’s Luther offering some statistics about the city’s economic development incentives over the last 12 years:

New investment by the private sector in Cedar Rapids: $884 million, though $557 million of it, he noted, comes from one project, ADM’s recent expansion.

Retained and created jobs: More than 7,900 with an annual payroll of $241 million.

Total local incentives: $49 million.

In a question from council member Shey, Luther said the city had had one economic development project fail in that time – Cedarapids Inc. had expected a new contract, didn’t get it and so did not get the incentive, Luther said.

In another case, a company didn’t meet its total job creation target, but exceeded the hourly wage required of it. And in a third instance, a company did not meet job targets, and had its incentive reduced.

Luther said the city’s proposed economic development policy will measure this:

Does a proposed project provide a long-term benefit to the city’s tax base?

Does it retain and create high-quality jobs?

Does the project add some diversity to the local economic mix, so if troubles hit one sector of the economy they won’t cripple the city?

Is there a long-term community benefit?

Is it responsible, sustainable development?

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