Council agrees to $17 million in local debt on new Event Center to clear way for big federal grant; makes no mention of its silence on referendum

CEDAR RAPIDS – The City Council, on an 8-0 vote, said this week that it will take on $17 million in city debt if the U.S. Department of Commerce gives it the other $35 million to build an Event Center convention facility next to the U.S. Cellular Center.

The vote in favor of taking on local debt for the project has been portrayed by the council as a last, key assurance that the Department of Commerce has demanded of the city before the federal agency makes its award for the Event Center.

The city's plan for the center is to close off Third Street NE at First Avenue and to build the Event Center between First Avenue East and A Avenue East next to Interstate 380 and the U.S. Cellular arena.

The city already has received $15 million in state I-JOBS funds for use to upgrade the arena.

By state law, residents had the ability to collect 2,353 signatures --10 percent of those who voted in the last regular city election - to force a referendum on the city's plan to sell $17 million in bond debt for the Event Center project. However, the council made no mention of the referendum option at a March 16 meeting when it first talked about the bond sale or at its meeting Tuesday evening. The deadline to acquire signatures was Tuesday evening.

Kathy Potts, who ran unsuccessfully for the City Council last fall, had started a petition drive late last week once she learned about the referendum option. But she gave the effort up. At Tuesday evening's council meeting, though, she reminded Mayor Ron Corbett that he had campaigned last fall promising to let citizens vote before the city took on debt for big city building projects.

Corbett has said his campaign comment was more directed at a new state law, pushed by the last Cedar Rapids City Council, which he said would have made it easy for the city to build a $38-million city hall without voter input.

Corbett didn't comment Tuesday evening about referendums.

Council member Chuck Wieneke said he hoped the city can use revenue from the city's hotel-motel tax to pay off the bond debt for the Event Center. Corbett has said the same thing, though the city was unsuccessful at this year's now-completed state legislative session to get the tax raised from 7 to 9 percent to help with any Event Center debt payments.