How will Cedar Rapids pay for building plans?

Mayor Ron Corbett was eating at the Spring House restaurant in northeast Cedar Rapids late Tuesday morning and taking on questions about where the local money is going to come from to fill in gaps in City Hall's ambitious flood-recovery building plans.

There's a $67-million Event Center. A $45-million public library. A $10-million Central Fire Station. A new Time Check Recreation Center. A new Animal Care and Control operation. A new bus depot. And add to that, the city's proposed purchase and renovation of the Crowne Plaza Five Seasons Hotel, which is joined at the hip with the Event Center project.

“I'm doing the same thing, trying to think about where the money is going to come from, too,” the mayor said.

A woman walking passed chimed in, “Well, we pay the mayor to think, don't we?”

Corbett chuckled.

On Tuesday, Corbett acknowledged that he is exploring the idea of asking the City Council to approve the use of some of the $80 million in local-option sales tax revenue coming into the city over 63 months for flood recovery to help pay, where necessary, to acquire land for the central fire station and a new west-side fire station, for the library, for a new recreation center, for a new animal shelter and for the Event Center.

But for the flood of 2008, the city would not be building any of the projects, and all are receiving federal disaster funds or other federal funds to pay for most of their costs, the mayor said.

The ballot language back in March 2009, which voters approved to put the 1 percent, local-option sales tax in place, calls for 90 percent of the local-option sales tax to be used for acquisition and rehabilitation of flood-damaged housing and for “matching funds for federal flood dollars to assist with flood recovery or flood protection.”

“All of these (building) projects meet the ballot language for matching federal funds,” Corbett said. “Now the ballot language didn't say ‘to match federal funds to purchase land for the library.' But I think the language is flexible enough that it allows elected officials to make the best choices on behalf of the community.”

In fact, the ballot language was written before the city realized that it would receive federal and state funds to cover the cost of buying out some 1,300 homes and to cover many of the costs of rehabilitating flood-damaged homes.

When Corbett took office in January, with eight months of sales-tax revenue in the bank, the city had spent virtually none of the money. That was still the case this summer.

Corbett and his council colleagues now have created new programs for flooded homeowners and renters to give them local-option sales tax money for personal possessions lost in the flood, programs that will use about one-fourth of the funds.

In total, the council currently has obligated about $65 million in sales-tax revenue for flood-recovery programs, though the council has had to back track on some of the obligations because the need is less than was thought.

“I think you have to take care of people's needs first,” Corbett said, and he said the council has done that with the personal-possessions program and continues to do that without other sales-tax commitments.

At the same time, he said the city now must turn its attention to its building program.

He pointed to the city's $45 million library project. It's now clear, he said, that the Federal Emergency Management Agency will contribute $3.5 million for the project's land purchase while the city will need more than $7.5 million to buy the library site and move and relocate current owner TrueNorth Companies.

The city is or shortly will be going through similar land purchases for the central fire station, a west-side fire station, a new west-side recreation center and an animal shelter.

The mayor also points to the Event Center project, which includes an upgrade of the U.S. Cellular Center and the construction of a new convention facility next door.

From the start, the $67 million project - which has garnered a $35 million U.S. Commerce Department grant and $15 million in state I-JOBS funds - has required a $17 million local match, money the city has expected to raise by selling bonds and using hotel-motel tax revenue to pay off the debt. The city again will ask the Iowa Legislature to allow cities to raise the tax from the current 7 percent to 9 percent to help with the local Event Center match.

Complicating matters, though, is the cost to purchase land. The project's budget calls for $3 million for land acquisition, an item that is likely to cost closer to $7 million, Corbett said. Part of the extra cost, $1.25 million of it, comes because the city is buying a private parking ramp on First Avenue NE next to the former Roosevelt Hotel, a ramp the city will demolish to make more room for the Event Center.

Gary Ficken, chairman of the City Council-appointed Local-Option Sales Tax Oversight Committee, on Tuesday said it's too soon for him to know if he can back the idea of using sales-tax revenue to help support the replacement of the city's flood-damaged buildings.

“Are the homeowner gaps that need to be filled, filled?” asked Ficken, the owner of Bimm Ridder Sportswear and one of the leaders in the campaign in 2009 to pass the local-option sales tax for flood recovery. “I still think that was the spirit of the vote, and the voters would like to make sure that remains priority one with the money.

“If those gaps are filled, then the question becomes, should we use LOST moneys instead of bonding? (It) could very well be a good plan.”

The city is facing additional local costs for the downtown hotel and for a new city bus station.

The City Council has decided to build the new city bus station on a block of land now owned by PepsiAmericas. In order to get the block, the city must buy all two-and-half blocks of PepsiAmericas property and then help relocate the warehousing operation. Last week, council member Don Karr said that might cost $8 million before it's said and done.

Corbett has said the city would use private insurance money paid to the city for a fire at the city-owned Sinclair plant to purchase the Crowne Plaza Five Seasons Hotel from its creditors if, in fact, the city does that. The hotel renovation might cost $17 million, the mayor has said, though it's not yet clear what the city's exact plans for city participation in the hotel will be.