NDC acquires lone property blocking possible development

The city found another way to acquire a property along First Avenue East that officials suggest is getting in the way of any potential development.

Rather than buying the property for $42,000 — which the city council voted in favor of until the mayor vetoed the action shortly thereafter — staff recommended council members approve an economic development grant agreement with Newton Development Corporation to acquire the parcel at 1311 First Ave. E.

Newton City Council voted 6-0 to allow NDC to acquire the property. The agreement states the city will provide a reimbursement grant at closing to NDC in an amount not to exceed $22,500, with a one-to-one match requirement. As part of the agreement, NDC will also apply for a D&D grant to demolish the home.

Considered a dilapidated home, the structure is almost entirely surrounded by unused land. NDC will also develop conceptual drawings and handle the work to secure a quality development at this site. NDC will maintain the property until it is purchased and developed.

Frank Liebl, executive director of NDC, said the land in this area is difficult to develop because it is owned by two different people. One owns nearly five acres of land while the other owns the parcel where a lone house resides. The city and other landowner tried to buy it in the past.

“But thanks to the efforts of (city building official) Mel Duncan, he’s got the owner to agree to sell the property,” Liebl said. “And I, for one, am tired of driving up and down First Avenue East on one of the most highly visible areas, the highest traffic pattern area in the community, and seeing this property vacant.”

From 12th Street to 17th Street, it should be “prime retail area” along First Avenue, which serves as the main throughway in Newton. Liebl said it is a great opportunity to acquire the house and move forward. However, when asked by council members, Liebl clarified there are not yet any potential developers.

And it has been impossible to find any good offer for the land, he added. Council member Vicki Wade worried the city would still inevitably be paying for the acquisition and demolition of the property, noting the funds are coming from NDC, which is in part given money from the City of Newton.

Other properties in the area remain vacant and unsold, too. But Liebl seems convinced the acquisition of this middle piece could spur other development.

“Can’t guarantee it, but it gives an opportunity,” Liebl said.

Council member Evelyn George said the city has learned from other projects in the past that it really needs to have control of a property to be able to seriously attract developers. If there are too many hurdles, George said, then they will look elsewhere at other communities. Wade asked for examples.

“We had all the land around the (Iowa) Speedway for the (Project) Fastpitch project,” George said. “We were getting nowhere with any of that until we knew who had that property so that we could talk about (acquiring it). Same thing happened, really, with Legacy Plaza.”

Liebl said another example would be the Iowa Speedway Drive. When the racetrack was being built, the city asked NDC to purchase property by the airport. NDC did just that and donated the necessary property back to the city. Council member Randy Ervin asked the mayor for his thoughts on the matter.

Newton Mayor Mike Hansen had vetoed the previous action on the property because he believed the council paid too much with no developer interested in the property at the time. Hansen explained he was approached by NDC about pursuing the land in a different manner.

“In order to move that project forward in its entirety is to gain ownership of that property,” Hansen said. “NDC worked with the other property owner in the area and just couldn’t get together. We got close but just couldn’t get together on acquiring the entire thing. Then they approached me with a proposal.”

The city also seems to find cheaper demolitions with a private entity and use grant funding through the D&D program. After discussing the matter further with Liebl and board members of NDC, Hansen thought this was a great way for the council to reduce the costs towards the city and continue to move forward.

“Because as you all know as we move forward with this development, and in any part of the city, we are always asked to reinvest in our community, and we’ve never had a problem doing that,” Hansen said. “Obviously we take a lot at the merits of what we’re being asked to do, whatever the project is about.”

Then the city analyzes the situation further before making a recommendation to council. Hansen believes this method is a reasonable approach to acquiring the property. The city doesn’t own it or maintain it, but yet it gets the same task accomplished by making the property developable.

Part of the property that is in what Hansen called the “development area” is in a floodplain, which also has a detrimental factor on what the property is worth. The

“And I agree with (Liebl) wholeheartedly. As it is right now, it’s not,” Hansen said of the land’s status among potential developers in the past. “But I don’t regret vetoing it because I believe it will move it to this next consideration for all of you.”

Contact Christopher Braunschweig at 641-792-3121 ext 6560 or cbraunschweig@newtondailynews.com