HomeMy WebLinkAboutMinutes-01/24/1996January 24, 1996
The Council and Airport Commission of the City of Waterloo, Iowa, met in Special Session at
Petersen Town Hall at the Waterloo Recreation & Arts Center, 225 Commercial Street, Waterloo,
Iowa, at 5:00 p.m. on Wednesday, January 24, 1996. Mayor John R. Rooff in the Chair. Roll
Call: Getty, Jordan, Krizek, Murphy, Anders, Collier, Mollenhoff.
106129 - Jordan/Murphy
that the Agenda, as proposed, for the Special Session on Wednesday, January 24, 1996
at 5:00 p.m., be accepted and approved. Ayes: Seven. Motion carried.
106130 - Getty/Krizek
that copies of the Calls for the Special Session of January 24, 1996 at 5:00 p.m.,
be received and placed on file. Ayes: Seven. Motion carried.
106131 - Krizek/Murphy
that proof of publication of notice of public hearing on the proposed Marketing and
Consulting Agreement and option to sell or lease real estate to KREG Operating Co.,
as published in the Waterloo Courier on January 18, 1996, be received and placed on
file. Ayes: Seven. Motion carried.
Robert Petersen, Chairperson of the Waterloo Airport Commission, now in the Chair. Roll
Call: Duncan, Hogan, Swinehart, Heaton, Petersen.
106132 - Heaton/Hogan '..
that the Agenda, as proposed, for the Special Session on Wednesday, January 24, 1996
at 5:00 p.m., be accepted and approved. Ayes: Five. Motion carried.
106133 - Heaton/Hogan '..
that proof of publication of notice of public hearing on the proposed Marketing and
Consulting Agreement and option to sell or lease real estate to KREG Operating Co.,
as published in the Waterloo Courier on January 19, 1996, be received and placed on
file. Ayes: Five. Motion carried.
106134 - HOLD HEARING --This being the time and place of public hearing, the Mayor called for
oral and written objections.
Mayor Rooff introduced Walter Montford, Koll representative who would be making a
presentation on the Koll companies and the proposed agreement. Mayor Rooff stated
that the purpose of this meeting is to receive public input and to address the two
concerns that have been raised regarding the up front fee and the clear performance
criteria.
Mr. Montford provided a slide and overhead presentation which introduced Koll
Companies, previous development areas and the overall plan for the Waterloo Airport
Development. Montford stated that Koll's interest in the Waterloo area was
initiated by George Rubella, an employee of Hughes aircraft. Rubella recognized the
attributes of the airport area and related his interest to Koll. Koll has been
primarily involved in speculative projects with multi -tenant incubator buildings and
they are usually financed with a tenant lease being signed.
Airport Commissioner Bob Heaton asked Montford if Koll has any risk in this
development. Montford answered that a failure could affect Koll's reputation in the
corporate community. He also reported that this contract is not structured
differently than contracts with other communities. This project is seen as a market
creation project for Koll which incorporates a good site but KREG must put together
the complete package to garner corporate interest.
Councilperson Anders stated that the last slide shows Hughes Aircraft as a partner
in the project. He asked what role Hughes would be playing in the development.
Montford stated that Hughes is assisting with the plans for the airport development
and more specifically the infrastructure requirements for any development.
Councilperson Jordan questioned the basis for the twenty-five thousand dollar
monthly fee. Montford stated that the fee was a negotiated fee and is related to
costs for the development team and is a fee for service on brokerage benefits.
Jordan asked if local contractors would be used. Montford answered that Koll
prefers to use local architects and contracts when possible because of their
familiarity with local regulations and licensing.
Councilperson Collier asked if Koll has any tenants that are looking for development
in the Waterloo area. Montford answered that specific names aren't available but
yes there are companies looking for the attributes of the Waterloo site.
Mayor Rooff pointed out that most of the slides depicting Koll properties are
developed in large complexes in major metropolitan areas. He asked why Waterloo
would have an advantage over those types of sites. Montford responded that because
of the central midwest location, availability of labor force and attributes such as
transportation systems and quality of life many companies are looking to move from
the metropolitan sites. The market place is shifting priorities to quality of life
and work ethic and trying to move away from high crime areas.
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January 24, 1996
Page 3
Jim Higgins, 205 Prospect Blvd, asked if Koll has been involved in any other rural
type projects and asked for an estimated timetable on the completion of the project
which would result in the ceasing of the $25,000 marketing fee. Higgins stated that
he is shocked at the profit reports on Koll and informed the council that it is .
against his business practice to hire an employee who asks what the draw is instead
of what the commission is. Montford responded that there are three sites for a Del
Monte development that are essentially rural located in Wisconsin, Oregon and North
Dakota. Roll estimates the marketing timetable to be a two year commitment but
looks to an affiliation with the project of ten to twenty years.
Jim Slife, Cedar Falls, grew up in the metro area and moved away but returned to the
area after twenty years. During that period jet service left the airport and no
substantial improvements have been made. Everyone agrees that the airport needs to
be developed and Koll is an entity that can deliver. Slife believes Koll has the
attitude that they will succeed. Slife recommended that the cancellation notice be
reduced to thirty days.
Rich Penn, 318 Wellington, supports any efforts for economic development and
anything that would move the airport into the twenty-first century. He is not
concerned about the financial reports on Koll but after reading the contract, as a
private citizen he would not sign it. The city is required to pay all costs, give
Koll the option to buy land for a price not set as market value and pay $300,000 for
marketing. Penn questioned how the city would recoup all these funds. Koll
referenced one of their recent developments as a black hole for development in
California due to the time lag to meet federal and state requirements or to get
approvals. Penn asked the Koll representative if Koll would invest their own funds
in this project without knowing what revenues are expected based on the capital
investment. Penn stated that the city has optioned out of the profits based on the
contract language because we can't manage the profits when Koll is the property
manager and is allowed to charge fees for that service. He cautioned against
approval of the contract before any return is identified. Penn asked the Koll
representative to respond to the question of when a return could be expected and at
what level it will be returned. Montford stated that the cost of infrastructure
improvements will be driven by tenant projects and their associated needs. The
lease option doesn't have value unless the city will approve the project and provide
the infrastructure to support development.
City Planner Don Temeyer presented the five year estimated budget for capital
improvements and the level of development needed to support the expenses incurred.
In just Phase I of the project there needs to be a taxable value on new construction
of 7.6 million dollars to show a return on the investment from tax dollars.
Van Miller, 1875 Westchester Rd, stated that he established his first business in
1986 and took a gamble on his home and livelihood with that first venture. His
experience is that you need to take a gamble and evaluate the risk to gain reward.
Miller expressed that everyone wants to see development at the airport but the real
question is how it can be achieved.
Brian Houck, 1611 Dakota, having heard the pros and cons, approved of the mayor and
council's decision to appoint a commission to review the project and make
recommendations. After all the work done by the commission and staff an opportunity
has been provided to the area. He stated that the $25,000 fee as a percent of the
city's overall budget is minimal. We can't afford not to take advantage of this
opportunity.
Herb Lynch, Cedar Falls, reported that his son is building on property near the
airport on Wagner Road. He stated that both Des Moines and Cedar Rapids have
airport industrial development sites that aren't doing well right now. Lynch
suggested that the city should save the money for this development until it can be
afforded.
Fred Miehe, 521 Derbyshire, expressed the opinion that if times were good no one
would care about this expense. However, as budgets are tight everyone is concerned
whether this expense should be made. He stated that Waterloo is a resilient
community. The Crossroads development was due in part to Schoenfelder's contacts
which attracted new business to the area over a period of years. Everyone in the
community is willing to contribute funding to the new ice arena and the school
football and track facility. This town supports the ideas of making improvements
for our kids. The airport development would also assist in providing a draw to keep
the youth here to grow and work for our community.
Tunis Den Hartog, 1897 Pinehurst, refuted the speaker which mentioned that the
$25,000 fee was not important in the city's overall budget. As a member of the
budget review committee an expense of that magnitude is looked at very seriously to
evaluate the cost benefit analysis of its existence. Den Hartog asked that serious
thought be given to requiring a thirty day cancellation on the contract.
Gerry Shatzer, 1829 W. 7th, has been involved in a similar type of contract which
was signed but did not live up to expectations. News reports indicate Micron has
run into problems and so that development may not be a loss to the community.
Shatzer expressed the opinion that our quality of life is questionable with the
increased transient and illegal alien population that is attracted from other
economic development efforts. He suggested that this contract should have a wage
requirement attached to it so that higher paying jobs would be a requirement of the
developers projects.
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Azenuer
January 24, 1996
Page 5
service. The second term platform was to address safety, rebuild neighborhoods and
decrease taxes. He feels they are digressing from their goals with this issue.
Molinaro doesn't support the giving away of WIDA money by persons who didn't
contribute to the fund. This proposal is lacking because it isn't performance based
and calls for up front money of millions of dollars. Molinaro believes the project
will cost us many, many dollars and the bonded indebtedness will increase. He
supported the school board's actions in taking cuts and agrees with the need to
consolidate services. Molinaro would rather invest funds in our children's future
by funding the Hunger Technical School project than in this. He stated that we
can't attract new residents to our community until our city is cleaned up.
Larry Bedard, 1938 Franklin St, agrees with Bob Molinaro. He supports any economic
development progress that can be made but as a business man he wouldn't use his own
money to invest in this project. Bedard stated that he feels betrayed that the city
wouldn't take a risk in allowing him to rezone and develop property on the east side
but would give money to a California company on such a risky venture.
Freda Weems, Waterloo, stated that she thought when she came to this meeting she
would feel more informed about the decision that was to be made but she will leave
here feeling disheartened that the expertise can't be found in our city or state.
Weems asked what companies are interested in the criteria that was displayed.
Montford reported that many large companies are interested in the criteria that was
developed by KREG in evaluating sites. Weems asked why the city should believe in
KREG. She doesn't feel the city should be taking such a leap of faith with this
company. '..
Pierre Denault, 205 Lovejoy, moved here after spending most of his life in Canada.
When his family moved here they were looking for the same criteria that Koll has
spelled out. He and his wife stated that they were impressed by many people that
seemed to have a vision for Waterloo such as Rene Dupont and Donna Nelson. He
stated that many problems in the past were caused by a lack of vision and if we want
to grow as a city we must be dynamic. Denault stated that it isn't a negative to
ask for outside expertise. He recognizes the drawbacks of the contract but feels
we must move forward.
Steve Jackson, 907 Sunrise Blvd, reported that he didn't grow up in Waterloo but has
lived here many years and is a strong Waterloo supporter. As a contractor who has
worked throughout the midwest and has seen economic development success he feels the
city should approve this contract. He was a partner with Ryan Development in trying
to establish new business by the airport but several prospects fell through because
of a lack of action by the players involved. Cedar Valley Corporation pledges
$50,000 to help get the project underway.
Vernon Weems, Waterloo, believes that the main supporters have been companies that
stand to gain if development occurs. He is insulted by the presentation given by
Koll because of the lack of high tech aids. He was unimpressed by the slide show
which used a twenty-five year old airport development as an example. Weems
expressed the concern about competing with federal programs being undertaken to
capitalize on the armed forces bases that are being closed throughout the country.
He feels that KREG should be able to give some information regarding possible
clients right now as evidence the developer knows what he is doing.
Wayne Nathem, 548 Cloverdale, stated that valid questions have been raised and
supports the need to look for other competition. He feels that any development
should be limited to airport related activities. Questions have been raised whether
we can afford this project. Nathem recommended that investigation into the success
of free trade zones be undertaken.
Kathy Oberle requested a poll of the council and commission on whether each member
was two hundred percent sure of the outcome of the contract. Members declined to
answer and responded that their vote would be evidence of support.
Bob Molinaro asked that as part of this process the council continue to look at
consolidation of services. He doesn't feel comfortable giving funds to a company
we don't know well. When Koll was asked why they won't invest their own funds they
indicated "because sometimes these things fail". Molinaro contends that the real
problem is that free trade zones are risky. Molinaro has asked many experts their
opinion of the plan and they have indicated that a free trade zone won't work in
Waterloo. He has submitted a report from Flying Tiger and asked that they look at
the contract and the plan. The recommendation received was that the developer be
required to take the risks and the city remain in the position of friendly landlord.
He doesn't want to gamble hard earned money on this type of venture. Molinaro
pointed out additional areas of concern with the contract. There is a three million
dollar liability limit for KREG and all hazardous materials liability is the
responsibility of the city. He reported that records indicate the calls are four
to one against approving the contract. Other metro leaders are not supporting this
project. Molinaro raised concerns about attracting residents to Waterloo even if
there is development because of the high taxes which will result from the
development. He stated that being opposed on this issue isn't a negative reflection
on the council but a civic responsibility.
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January 24, 1996
106138 - Getty/Jordan
Page 7
that "an Ordinance amending the 1993 Code of Ordinances of the City of Waterloo,
Iowa, by adding Division 3, Airport Area Development Authority, to Chapter 2,
Administration (creating an administrative agency of the city, pursuant to State
Code of Iowa, Chapter 392, for the creation of the board established to organize,
supervise and manage a trade and commerce center adjacent to the Waterloo Municipal
Airport)", be removed from the table.
With the approval of the mover
Heaton/Swinehart
and seconder, the above motion was withdrawn.
that the above amended contract be approved, subject to conditions of the council.
Ayes: Four. Nays: Duncan. Motion carried.
106139 - Getty/Jordan
that "an Ordinance amending the 1993 Code of Ordinances of the City of Waterloo,
Iowa, by adding Division 3, Airport Area Development Authority, to Chapter 2,
Administration (creating an administrative agency of the city, pursuant to State
Code of Iowa, Chapter 392, for the creation of the board established to organize,
supervise and manage a trade and commerce center adjacent to the Waterloo Municipal
Airport)", be removed from the table. Ayes: Seven. Motion carried.
106140 - Getty/Jordan
that "an Ordinance amending the 1993 Code of Ordinances of the City of Waterloo,
Iowa, by adding Division 3, Airport Area Development Authority, to Chapter 2,
Administration (creating an administrative agency of the city, pursuant to State
Code of Iowa, Chapter 392, for the creation of the board established to organize,
supervise and manage a trade and commerce center adjacent to the Waterloo Municipal
Airport)", be received, placed on file, considered and passed for the second time.
Ayes: Seven. Motion carried.
106141 - Anders/Jordan
that rules requiring ordinances
meetings be suspended. Ayes:
106142 - Anders/Jordan
to be considered and voted for passage at two prior
Seven. Motion carried.
that "an Ordinance amending the 1993 Code of Ordinances of the City of Waterloo,
Iowa, by adding Division 3, Airport Area Development Authority, to Chapter 2,
Administration (creating an administrative agency of the city, pursuant to State
Code of Iowa, Chapter 392, for the creation of the board established to organize,
supervise and manage a trade and commerce center adjacent to the Waterloo Municipal
Airport)", be considered and passed for the third time and adopted. Ayes: Six.
Nays: Collier.
Ordinance adopted and upon approval by Mayor assigned No. 4150.
106143 - Hogan/Heaton
that the meeting be adjourned at 10:15 p.m. Ayes: Five. Motion carried.
106144 - Getty/Jordan
that the Council adjourn at 10::.15 p.m. Ayes: Seven. Motion carried.
Susan Fangman
City Clerk