Cedar Rapids still striving to buy 'eyesore' downtown salvage yard

Not many cities with ambitious plans for a riverfront feature a scrap yard hidden by a thicket of trees and underbrush across the river from the downtown.

Cedar Rapids does.

Eight months ago, the City Council here asked City Manager Jeff Pomeranz to enter into negotiations with Thomas Knutson to purchase his salvage yard, Knutson Metals Co. at 525 and 533 H St. SW, which sits between the city's attractive, 15-year-old police station and the Cedar River.

At the time, City Council member Justin Shields called Knutson's business “an eyesore,” a characterization that Pomeranz embraced in April when he submitted an application to The Hall-Perrine Foundation seeking up to $700,000 to help pay for the purchase of Knutson's business.

“The property is a blight to the neighborhood and a drag on redevelopment,” Pomeranz states in the city's application for foundation funding. “Every day this property detracts from the value and quality of our city as residents drive to work, use our trails and look out their office windows.”

The Knutson property is immediately next to the city's new riverfront amphitheater, now under construction, and is in the way of a planned trail that connects the amphitheater to additional park space related to the amphitheater, called Festival Park, near Eighth Avenue SW.

This month, The Hall-Perrine Foundation - which has provided funding help for a variety of City Hall projects in recent years, including the riverfront amphitheater, the Convention Complex, the library and the city's purchase of the former Sinclair meatpacking plant - turned down the city's request to help fund the purchase of the Knutson property.

“The decision in no way implies any adverse judgment as to the worthiness of the project,” Jack Evans, foundation president, says in a letter to Pomeranz denying the city's request for funds.

The City Assessor's Office currently values Knutson's two-story building at 525 H St. SW at $98,891 and the vacant property next door at 533 H St. SW at $38,006. Knutson operates his salvage business in the building's basement and has leased out a portion of the upstairs to a haunted house during the Halloween season. Water reached high into the building - which was in “poor condition” at the time, according to the City Assessor's Office - during the flood of 2008.

Knutson spends little time at the property, though he has had his employees in recent weeks ship off most of the scrap metal that had been piled up around the outside of the building. Employees this week said the cleanup is an answer to the city's public comments that the property is an “eyesore.”

Mayor Ron Corbett on Tuesday said the city thought it was close to a purchase agreement with Knutson, but the mayor said negotiations continue over the purchase price. Attempts to reach Knutson have not been successful.

The $700,000 that the city had sought from The Hall-Perrine Foundation was only part of the cost it thought it might have to pay for the property, Pomeranz's letter to the foundation suggests.

Corbett said Knutson wants the city to include in the purchase price an amount of money to move the salvage yard to a new location or to compensate him if he has to go out of business as a result of the purchase.

Corbett said he prefers to negotiate a sale price, but he added that the city may have to use its power of eminent domain to acquire the salvage yard.

The city condemned the Knutson properties and six others in the mid-1990s as part of the police station construction project. Back then, the city and owners of some properties went to the local Compensation Commission to establish a fair sale price, and the city then pushed on to the Linn County District Court in some instances when it thought the commission sale price was too high. In the end, the city decided not to buy the two Knutson addresses, 525 and 533 H St. SW, because of price.

The city and Linn County own the other property between the riverfront amphitheater and Eighth Avenue SW along H Street SW except the Knutson addresses. On one of the government-owned properties is the Mott Building, which Corbett noted is expected to remain in place. The mayor said he has seen plans to convert it into a residential property.

Corbett said a historical analysis of the Knutson building, built around 1900, will take place as the city decides if it should be reused or demolished once the city acquires it.

“We need this property from a community standpoint,” the mayor said. “We have to be fair and give someone the fair-market value of their property. … So we're going back and forth on what is the value of the business and what kind of profit does he make.”

The trees that in season help hide the Knutson property from view along the river are not particularly attractive either, Daniel Gibbins, the city's parks superintendent, acknowledged on Tuesday.

After a city purchase, Gibbins said the city would prune or remove “deficient” trees to improve the riverfront appearance and open up the view. At the same time, the city would plant new trees to fill in voids with additional undesirable trees removed as the new trees grow, he said.