Council's Vernon reminds PCI of 'unprecedented' medical mall incentives

City Council members here rarely respond to citizens who comment during a council meeting's public-comment period. But on Tuesday evening, council member Monica Vernon used what the council calls “a personal privilege” to make a few points about the city's new, emerging Medical District and the proposal by a physicians' group, Physicians' Clinic of Iowa, to build a new medical building in the district.

Vernon commented after a handful of PCI employees made the case to the council for PCI's new building project, which comes with the hotly debated request of the City Council to close a portion of a main arterial street, Second Avenue SE, into the downtown. Closing the street is a small price to pay for PCI's investment, one PCI employee said.

Speaking directly to the PCI contingent in the audience, Vernon reminded the group that the City Council back on Jan. 27 approved a “memorandum of agreement” with PCI in which the council in concept approved economic incentives for the PCI's $36-million building in the range of at least $9 million to $11 million, including paying for a new $8-million parking ramp.

“It's important for all to know,” Vernon said, and she called the proposed City Council incentive package “unprecedented in its size.”

The City Council is slated to discuss PCI's request to close a portion of Second Avenue SE at the council's Aug. 24 meeting, and Vernon's comments were the first public reminder from a council member of the extent of the council's earlier commitment to the project independent of the issue of and costs associated with closing of a portion of Second Avenue SE.

Vernon said now it is important to see how much the cost “ante” has been raised by PCI's push to close the street.

A traffic study completed for PCI, St. Luke's Hospital and Mercy Medical Center has put short-term costs at $2.6 million for changes on Second Avenue SE and put longer-term costs at $4.5 million to eventually steer traffic from Second Avenue SE to a wider, two-way Third Avenue SE.

Vernon suggested that a blur had arisen between the creation of the Medical District and PCI's push now to close Second Avenue SE as a condition of its new investment in the district.

“No one is opposed to the Medical District,” Vernon said. The council, she repeated, also has expressed support “unprecedented in terms of an incentive” for the PCI project aside from the Second Avenue SE issue.

According to a proposed development agreement with PCI passed by the City Council in January, the city agrees:

To pay for a 450-space parking ramp, the cost of which PCI has put at $8-million.

To provide an additional “economic development grant” to cover PCI's additional cost of building in Cedar Rapids versus the lesser cost of PCI building on previously undeveloped land somewhere else.

To allow future PCI property taxes that PCI will face with its new building to be used to “offset” property assessments against PCI for improvements to streets in and around the PCI development.

The proposed agreement notes that PCI, in turn, will retain 400 jobs and add 100 more within five years. (At two open houses the week of Aug. 2, PCI said it would add 50 jobs.)

The Jan. 27, 2010, resolution by the City Council calls on the city manager to prepare a private redevelopment agreement between the city and PCI with the above terms incorporated into it.

The agreement is still a work in progress and has not been signed, Jennifer Pratt, a planner in the city's Community Development Department, reported last week.