Federal-funding help for new downtown convention center appears to be on front burner of U.S. Department of Commerce

City Hall remains eager to learn if the U.S. Department of Commerce's Economic Development Administration will award the city $39 million to build a new convention center next to the U.S. Cellular Center.

A letter to City Hall from the EDA's Denver, Colo., office seems to indicate that the EDA is giving the city's request serious consideration.

The letter, from Thomas Vine, legal counsel for the EDA's regional office, asks specific question about the city's plans to provide a local match if federal dollars for the convention center are awarded.

Patrick DePalma, chairman of the city's Five Seasons Facilities Commission, said on Monday that the city may need to raise $13 million to along with the $39 million in federal funds, and the local funds likely would come from the sale of general obligation bonds.

DePalma said the letter from EDA sounded a little like a “chicken-and-egg” issue: that EDA can't commit funds until it knows about the local match, and the local match likely can't be guaranteed until EDA signals it is willing to commit the funds.

The EDA's Vine specifically addresses a change in Iowa law – which the city of Cedar Rapids had sought – that permits cities in disaster areas to sell general obligation bonds for public facilities without first going to voters for permission. The new law, though, allows citizens to gather signatures to request a “reverse referendum,” and Vine is wondering what happens if EDA commits money, citizens request a referendum and the local match is defeated at the polls.

City Manager Jim Prosser on Monday said he was working to answer the Vine letter, which was addressed to Prosser.

The change in state law that allows disaster cities in Iowa to forego automatic referendums on public building projects was intended to make cities more nimble as they work to rebuild.

Even with the new law, some on the City Council have said they likely would ask voters via a referendum before they committed any local money on major building projects that would have required a referendum before this year's law change.

But as DePalma said, it's hard to ask local voters to approve money for a project when the federal government is waiting for local voters before it makes a commitment.

DePalma said city officials have been and remain optimistic that the EDA funding will come through for the proposed convention center.

DePalma said the City Council in recent weeks and months has placed the building of a new convention center and an upgrade next door at the existing U.S. Cellular Center at the top of its list in seeking funds from the state I-JOBS Board and the federal EDA. The U.S. Cellular Center already has secured $15 million in I-JOBS funds.

“We're still optimistic,” DePalma said of the EDA grant. “The project makes a lot of sense for the city, and I think it would be a mistake if we don't do it.”

Doug Neumann, who heads up the flood-recovery entity, the Economic Planning & Redevelopment Corp., as well as the Downtown District, said on Monday that the EDA could choose to fund the new convention center in pieces. A first piece might fund design, engineering, property acquisition and tenant relocation, he said.