What should Cedar Rapids do with all its land?

CEDAR RAPIDS — How much is too much?

The city of Cedar Rapids remains one of, if not the largest, property owner around with a mix of land destined for a flood protection system, redevelopment, core municipal uses such as parks, fire stations and city offices or less central uses such as a hotel, arena, theaters and golf courses.

The city has also become one of the biggest wheelers and dealers of real estate in recent years.

'How much land do we still have that is development worthy?' questioned Pat Shey, a city council member during a discussion about dispositioning or getting rid of city-owned properties at a development-committee meeting earlier this month.

Since the beginning of 2008 — and largely due to the 2008 flood — Cedar Rapids has 2.5 times more properties today than eight years ago, up from 561 in January 2008 to 1,305 this January, according to data provided by the Cedar Rapids Assessor's Office and analyzed by The Gazette. In that time, the city has also disposed of hundreds of vacant properties to the private sector, in many cases improving their value.

Total properties owned by City of Cedar Rapids

Chart by John McGlothlen / The Gazette

The city acquired 1,365 properties after the flood with federal dollars. Others have come from brownfield restoration efforts; slivers of land here and there as part of routine right of way acquisitions for road work; or in one case, a large hotel — the DoubleTree by Hilton — to serve as an economic catalyst for downtown.

Not everyone thinks this is a good idea.

'The city has more property than we really need to be keeping,' said Chuck Wieneke, a former city council member who remains active at meetings. 'You have to maintain something that's just sitting there. The money being spent we could better spend somewhere else if the property went to private use.'

City Development Director Jennifer Pratt said the city recognized even before the flood it had more properties than it should and began working to dispose strips of land — often to the adjacent landowner. However, Pratt said, for all the property the city has acquired, it likely also has been the largest seller of property in the past few years.

Since 2013, when city property numbers peaked at 1,696, the city has divested itself of 514 properties, according to The Gazette's review of City Assessor data.

Another report from City Assessor's office data looking specifically at properties sold by the city, shows 548 properties have been sold since 2008. Of those, 78 properties were sold for $27 million, while the other 470 properties are shown as having a sale price of zero.

In recent years, destroyed or vacant properties have become homes, downtown condos, office buildings or retail space, such as the CRST Center, the Smulekoff's Building, Geonetric, the Depot condos and NewBo City Market.

Among 12 city properties turned over for commercial redevelopment since 2012, it's sparked an investment of $97 million and 254 new jobs, according a city report. Once $21.3 million in tax breaks expire, those properties are expected to add $50 million to $75 million in new tax base, Pratt said.

On the horizon are other proposals for city land, such as the $103 million, 28-story One Park Place, the $7.5 million redevelopment of the old Knutson Building along the Cedar River, and a proposal for a $9 million affordable-homeless apartment complex, called Crestwood Ridge, on Edgewood Drive.

The city did not have a total price tag of how much the properties were sold for, although the majority would have been refunded to the federal flood buyout program.

'Market-driven' decisions

While commercial redevelopment gets a good deal of attention, the city has been most involved in housing.

Roots, a still-active program to reintroduce housing stock lost during the flood, had completed 229 homes through January 2016. Those property values had dropped from a combined $16 million before the flood to $2.5 million in 2012 — before climbing to a $30 million assessment this year, according to a city report.

Just this month, the city was considering disposing of several more properties, prompting Council member Shey's inquiry:

• The National Czech and Slovak Museum and Library requested a disposition process to lease vacant lots at 15th Avenue SW and B Street SW for possible future expansion.

• The city is considering divesting nine parcels of city-owned parking in Czech Village, which would remain free parking but avoid public upkeep costs.

• The city is recommending starting a request-for-proposal process with a preference for market-rate housing after a developer inquired about 535 First Ave. SW, a vacant site of a former gas station.

• Horizons, A Family Service Alliance is seeking city land at 904 and 908 Fifth Street SE to store Neighborhood Transportation Service vehicles, prompting city staff to recommend initiating the typical competitive bidding process for city land.

• At the city council meeting this past Tuesday, the city discussed selling a parcel of land at 7700 18th St. SW — now under the jurisdiction of The Eastern Iowa Airport commission — to Nordstrom for $1.2 million.

Rather than unleash all property at once, the city has let dispositions be 'market driven,' which has helped avoid oversaturating supply and strain on supporting industries, such as construction, engineers and design architects, Pratt said.

For redevelopment within the 100-year flood plain, the plan must meet conditions, including being elevated, floodproofed and have flood insurance, she said.

A handful of city-owned redevelopment sites remain in the Kingston Village area — including the land once envisioned for Cedar Crossing Casino — and a couple dozen or more flooded-out residential and commercial properties along Ellis Boulevard NW, Pratt said. A neighborhood action plan underway for the Northwest Neighborhood could help envision a new life for Ellis, she said.

Council member Ann Poe suggested the city should combine smaller lots to help draw developer interest.

The disposition process typically is prompted by a developer inquiry, which kicks off a competitive request for proposal bidding process, Pratt said.

Despite the large number of properties, Pratt said the city has few available sites left. After housing, the city began focusing on the business and historic districts, but most of what was suitable for redevelopment has been claimed, she said.

The parcel where One Park Place is proposed along First Street SE is the last available downtown, she said.

'There's relatively few that are buildable lots,' Pratt told Shey during that development-committee meeting earlier this month. 'There's relatively few that are outside the flood plain and developable.'

The majority of the vacant land the city still owns — 1,008 properties covering 2,781 acres — is close to the river and is being held for use in a future flood protection system or greenways, Pratt said.

It's possible some of the land, such as some of the old Sinclair meatpacking plant site, could become available after the flood protection system is in place, she said.

Shaping development

Jess Zimbabwe, director of Urban Development at the Washington, D.C.-based National League of Cities, said cities vary widely in how much land they own. But when cities face an especially large portfolio of properties, a request-for-proposal is a common disposition strategy to rehabilitate properties into something more, sometimes with specific goals such as affordable housing.

'The process is generally considered preferable because it allows the selected development team some flexibility in responding to market or community needs, especially if the site is developed over time,' she said.

There are some similarities with Cedar Rapids's role to land banking programs cities such as Cleveland and Detroit have established to market vacant properties to developers, not-for-profits or others to put them back to a productive use.

'Many cities engage in landbanking, controlling land to better shape development,' said Chuck Connerly, director of the University of Iowa School of Urban and Regional Planning.

He noted his group will begin a landbanking study for the East Central Intergovernmental Association in late August.

Pratt said while some similarities exist in that the city's goal in returning land to the private sector is to strengthen the community, the initial reason for taking possession of much of the property is different from typical landbanking.

'We undertook 1,400 acquisitions to let people move on from the flood so they weren't financially ruined,' she explained.

But, she added, 'if the city owns it, we are able to put on certain requirements or preferences we are not able to do for private land.'

Findings

Other findings in the review of City Assessor data show:

• Since 2008, Cedar Rapids has bought 785 properties for $68 million.

• The city still owned 858 properties, as of January 2016, that IT acquired since 2008, and those had a combined January 2008 value of $812 million.

• Acres owned by the city have increased from 6,683 in 2008 to 7,008 in 2016.

• The city has 47 parking lots and structures covering 29 acres.

• City parks number 73 and cover 1,226 acres.

• Cedar Rapids has four city-owned golf courses, two theaters, one amphitheater and four museums.