Council negotiates potential commercial property projects

     Two different commercial property development projects came before the Monticello City Council during their April 5 meeting.

     The first one that has been ongoing, perhaps for years, concerns the former Compadres building located at 103 W. First St.

     The council received two RFPs (requests for proposals) on the future of the building and property. One from Matt Kumley, owner of an adjacent business, Glass Tap. The other from Creative Concepts Development LLC, which is a group of local investors who came together as a partnership.

     Kumley wishes to acquire the property at zero cost, reconstruct two apartments upstairs and expand his bar/restaurant business on the main level. His proposal also requests a tax break from the city on any new construction.

     Creative Concepts would pay $1,000 for the building, use the existing Derelict Building Grant and the city’s cash match to clean up the asbestos, repair the roof system, demolish the east-west portion of the building, and rebuild the north-south portion with upper level housing.

     Economic Development Director Derek Lumsden urged the council to make a decision now due to the deadline associated with the catalyst grant application.

     In addition, Lumsden said the roof of the W. First Street-facing portion of the building is in severe condition. He’s been in touch with a contractor out of Vinton who is willing to fix the roof in a timely manner to meet the derelict grant deadline of June 30.

     Council member Dave Goedken said the city has invested enough taxpayer dollars and time on the project.

     “What can we do to protect ourselves and make sure something gets done and moves forward?” he asked.

     Lumsden said the state, which facilities the grants, will make sure the work gets done. Otherwise, the city or contractor would have to repay the grant.

     “We have to move forward with this,” added Council member Chris Lux. “We’ve had this building long enough.”

     The council approved the Creative Concepts RFP, noting that Kumley plans to work and partner with the LLC to make sure both sides are happy with the outcome. Council member Tom Yeoman abstained due to his involvement with the LLC.

     “This is a nightmare of a project,” noted Kumley, who’s had engineers walk through what remains of the building. “The engineers were very nervous about the way the building is supported. I’m more than happy to jump in with the other developer to have the project done for the benefit of the city.”

     “If we don’t do this now, we’ll have to tear down the building and have another open space in our downtown,” Lux added.

     The other development project is associated with the Northridge area behind the bowling alley.

     McMATT Properties, represented by Mike McDonough, requested tax incentives from the city for improvements at 725 John Dr. McDonough and developers Jeff and Jerry Hinrichs propose building a 30-foot-by-452-foot 47-unit storage warehouse to help boost the development of the residential homes in that area. Their proposal noted that while the project wouldn’t create jobs in the community, it would “help sell lots or new homes on lots,” adding to the city’s property taxes. McDonough noted that the city’s housing market is pretty minimal at the moment.

     “There is a shortage of housing in Monticello,” he said.

     Depending on whether they use gravel or concrete in front of the storage units, the total project costs are between $320,000 and $378,000.

     McMATT also requested a $20,000 TIF grant from the city that would go toward the project, as well as extending the real estate tax exemption (credit) from five to 10 years at 90 percent for the first two years, 80 for years three and four, 70 for years five and six, 60 for years seven and eight, and 50 percent for years nine and 10, for a total rebate of $114,500.

     There was a considerable amount of discussion on the proposal, which is not currently in the city’s TIF district. Mayor Brian Wolken reminded the council that the city would have to amend the TIF district in order to spend TIF money a project outside of the TIF area. Yeoman also felt the council needed to be fair and countered with a standard tax abatement from 10 to 90 percent over 10 years, with the final two years both at 10 percent. Using the standard abatement, it would total around $61,000. Yeoman was also against the $20,000.

     “A storage unit does not offer a fast payback,” McDonough said.

     “There’s a demand,” Jeff Hinrichs said for storage units in the community. “There’s definitely a need.”

     “If it’ll help move houses and put them on the tax roll, we should move forward with this,” Goedken said of being in favor of McMATT’s proposal. “That property has been there for 20 years and nothing has been done. If this will help build new homes in that area, I think it’s a great thing.”

     “That lot is ideally suited for storage units,” Wolken noted.

     The council approved the standard tax abatement over 10 payments without the $20,000 incentive.

     McDonough said McMATT would have to discuss its next moves, now knowing the council’s decision.

     “If you don’t do it,” Yeoman said of the storage unit project, “I can come up with someone who can. There might be someone else interested in this project, too.”

     Jeff said he wasn’t sure anyone could do the project cheaper due to the rising cost of building materials.