Marion council seeks advice on financial plan for new library

MARION - The Marion City Council agreed Thursday night to seek financial and legal guidance on the financial proposal for a new public library before taking any further action.

Council members first saw the financial proposal at Tuesday's work session.

The $12.2 million library would be part of a $24 million mixed-use residential and retail building built by Ryan Cos.

Lydia Brown, development director for Minneapolis-based Ryan Cos., which has offices in Cedar Rapids, said the ideal location for the library would be where the Marion Square strip mall now sits along Seventh Avenue. The building would be constructed after the strip mall is torn down.

The financial plan calls for using:

l $5.04 million in local-option sales tax.

l $2 million a Marion Public Library Foundation fundraising campaign.

l An estimated $2.5 million the city could garner from selling the current library, the sale of its current library, 1095 Sixth Ave.

l $3 million in tax increment finance support, from the city to Ryan Cos., to build an underground parking facility for the new building.

l The ibrary foundation would apply for a bond of up to $10 million from the Iowa Finance Authority, to buy the library portion of the building from Ryan Cos.

The city would use the $5.04 million in local-option sales tax money to lease the library from the foundation, ultimately owning the library after about 10 years, City Manager Lon Pluckhahn said.

Because the city would lease the building from the library foundation, Pluckhahn said, it would be beneficial for the city to obtain legal advice on any lease agreement between the city and library foundation.

'The lease agreements the city and library foundation - we can do that (legally),” he said. 'But any lease over three years, there's a specific legal process. We have to make sure we don't stub our toes and do anything wrong when setting this up.”

Pluckhahn said he plans to seek financial and legal counsel from financial advising companies the city has worked with previously, such as Piper Jaffray.

The results of those discussions could be back to the council for discussion in March. The council woulod need to approve the use of local-option sales taxes for plans to advance.

Council member Joe Spinks thanked Ryan Cos. representatives at Thursday's meeting for finding the most 'viable plan” since the developer began working with the city in 2014.

But Mike Pedersen, owner of Tomaso's Pizza in the Marion Square strip mall, said he doesn't approve of how the residents can't vote on whether to have the new library because the project, as proposed, is a private agreement between the library foundation and Ryan Cos.

Pedersen said he also is concerned about the future of the family-owned businesses in the strip mall.

'There will be businesses that go out of business. You recognize people popping out of a van at 10 a.m. in the morning and staying there until 10 p.m. at night” to work at a family store or restaurant,” he said. 'They've got that same $200,000 range invested in that leased property.”

Pedersen said he is concerned that even if the city provides financial incentives for business owners to move and reopen, the help won't be enough to cover moving costs.

l Comments: (319) 368-8516; makayla.tendall@thegazette.com