Council must decide on deal with Pepsi for depot

CEDAR RAPIDS - Much of City Hall's focus of late has been on the hunt for local funds required to help build the $75.6 million Convention Complex, to buy and renovate the Crowne Plaza Five Seasons Hotel and to build a flood-protection system.

The Convention Complex needs $26.6 million in local funds; the hotel, maybe $20 million; the flood-protection system, $35 million for starters.

Now the City Council will confront another $10 million funding need tied to the site it earlier chose for the new Intermodal Transit Facility bus depot. At its meeting Tuesday evening, the council will discuss and possibly vote to spend the money.

The funds would buy 2.4 blocks of downtown property from Pepsi Beverage Co. and help build Pepsi's warehousing and maintenance operation a new facility south of Wright Brothers Boulevard SW.

According to a memorandum from city planner Sushil Nepal, the funding for the new Pepsi facility - $6.3 million of the $10 million commitment - would come from the growth in property-tax revenue in the tax increment financing district where the facility will be located. Some of that increase will come as a result of the tax Pepsi will pay on its new facility.

The arrangement is similar to the city's incentive for a medical mall to be built by Physicians' Clinic of Iowa on Second Avenue SE. In that case, the city will incur $13.24 million in debt for a parking ramp and street improvements; the debt will be paid off over time by new property taxes coming from the facility.

As for the rest of the proposed Pepsi deal, the city would pay the company another $3.7 million for its 2.4 blocks of downtown property. Of that amount, $3.07 million will come from city's sale of bonds to be paid back over time by property taxes and $631,400 from a grant from the Federal Transit Administration grant, according to the city memorandum.

The new transit facility will take up only one block - between Fifth and Sixth avenues and Fifth and Sixth streets SE - of Pepsi's 2.4 blocks of downtown property. Pepsi, though, has told the city it can't function as necessary on 1.4 blocks, so the city would have to buy all of the Pepsi property or locate the bus depot elsewhere.

The Pepsi operation will move to the west end of Capital Drive SW off Atlantic Drive SW south of Wright Brothers Boulevard SW. The city memorandum says Pepsi will retain 90 jobs in the move and will have its new facility in place by the summer of 2012.