First batch of Cedar Rapids buyouts approved

The City Council last night approved the first 28 buyouts of flood-damaged Cedar Rapids properties in a process that could result in as many as 1,200 to 1,300 such buyouts before all is said and done.

By week's end, another 13 owners should have signed buyout agreements for approval next week, Rita Rasmussen, the city's senior real estate officer, told the council last night.

Earlier Wednesday, Rasmussen said many of the first 28 were “tickled” to get their buyout offers from the city, and she said many felt getting the buyouts behind them would help them move ahead.

The first 28 owners and the next 13 are in a group of 117 heavily damaged properties at high risk to flood again, which the Federal Emergency Management Agency is helping to purchase to create a greenway along the river. FEMA will pay 90 percent of the purchase cost and the state will pay 10 percent. Ten of the 117, for now, have said they don't want buyouts.

Of the first 28 buyout properties, 24 are in the Time Check neighborhood in northwest Cedar Rapids, two are along Ellis Road NW west of Edgewood Road and two are in the Cedar Valley/Rompot neighborhood in southeast Cedar Rapids.

Eleven of the 28 owners may be eligible to receive an additional, maximum payment of $10,000 (plus $850 in moving expenses) if they purchase a home worth at least that much more than the value of the one they lost in the flood. The rest of the 28 are not eligible for the additional money because they were not owner-occupants of the property before the flood, Rasmussen said.

Eleven of the 28 also are eligible for an additional payment to cover the cost of insurance premiums for up to five years if they had flood insurance at the time of the flood.

The buyouts are based on the pre-flood value of a property minus insurance payouts or earlier FEMA payments. The final total paid to owners at the time of property closing often will be less than the buyout offer because of outstanding liens or judgments on the properties, Rasmussen said. The first closings, she said, will come in January.

Council member Justin Shields asked about the 10 owners among the 117 who to date have declined buyouts. What happens, he asked, if the city has blocks of greenway dotted with a house here and one there?

City Manager Jim Prosser said the city intends to survey just which properties might remain in place after the first wave of buyouts to see how big the problem is. Some opposed to buyouts might change their mind, he noted. Those agreeing to buyouts now can back out up to the time of closing.