CEDAR RAPIDS — Critics of a proposed Cargill rail yard in the Rompot neighborhood have been closely watching as the assessed value of the 28 acres of vacant city-owned land designated a pollinator zone had jumped to more than $1.1 million and then corrected to $68,800 in recent months — neither of which match Cargill’s offer of $83,200.
Beginning in mid-2018, Iowa assessors were required to assess non-taxable property such as this one, which previously had not been given a value since the land doesn’t generate taxes.
The initial rate assigned was $40,000 an acre or $1.1 million overall. But when questioned by a Gazette reporter, Julie Carson, Cedar Rapids city assessor, recognized it was a mistake and proceeded to re-evaluate.
It “should be valued differently as it is excess land to the other parcel, is more remote from Otis Avenue, and is closer to the river,” Carson wrote last week to a Rompot neighbor questioning the assessed value.
Since the land was affected by the 2008 flood, the office went with a more modest $2,500 per acre value generally assigned to properties in the flood plain (in this case, the 500-year flood plain) and unbuildable, she said. The value was corrected to $68,800.
The value of the land has been one of many points of contention in a bitter dispute over plans to build a rail yard in a blue-collar neighborhood south of downtown, as opponents lob charges that scales are tipped in favor of the industrial giant and workforce staple.
Cargill’s proposed $6.5 million, 200 car, 12-track rail yard has gained two votes of approval from the City Council, and needs a third expected Tuesday to finalize rezoning of the city land south of Steward Road SE so it can proceed.
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Kerry Sanders, who corresponded with Carson, was skeptical of the assessment “switcheroo” and requested a review by two independent appraisers chosen by his community.
In a 2018 request for proposals to buy and develop the land, the city provided an appraisal of $83,220. Cargill, which submitted the lone application, agreed to match.
Bill Micheel, Cedar Rapids assistant community development director, said if the rezoning passes, a third-party appraisal would be required — typically paid for by the buyer — as part of a development agreement tied to the land sale. The price would be the higher of either the city appraisal or the independent appraisal, he said.
In addition to paying for the land, Cargill also had agreed to reimburse up to $400,000 for railroad crossing improvements for a quiet zone, replace the lost pollinator zone and donate the land back to the city or to the Indian Creek Nature Center.
The land value has also taken enhanced importance — as Sanders noted in his letter — because some council members, including Scott Olson and Ashley Vanorny, proposed that if the project moves forward, proceeds from the sale be put in an account for the neighborhood to offset issues that may arise from the rail yard.
“I plan to advocate for the proceeds or increased taxes be set aside in a fund to solve other issues that may occur with the neighbors that are not addressed by the design,” Olson said, noting he does not believe the rail yard will cause the problems neighbors fear. “The pushback has been ‘will this set a precedent?’ and we don’t want to do that.”
Rob Hogg, a Democratic state senator and longtime Rompot resident, has called on the city, Cargill or both to establish a $5 million fund to financially protect the approximately 30 properties in the neighborhood either through buyouts or to offset property value loss. A Cargill study predicts property values would not be impacted.
Mayor Brad Hart and council member Dale Todd, who’s district includes the Rompot neighborhood, were leery.
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If they created a fund in this case, how would the city deal with unhappy neighbors in a future rezoning or land use change, Hart wondered.
“I don’t want to set a precedent that if people do not like a future land use amendment that the city would pay them,” Hart said.
Another policy related to the land under scrutiny is the process for putting it up for sale, which was designed to be competitive.
After Cargill expressed interest, in early 2018 the city initiated a process to seek other development proposals. But none came forth.
While a public hearing was held before the council and placed in the public notices section of The Gazette, neighbors have questioned why they weren’t notified the nearby land was for sale. They said they received no notices, nor were notices placed on the site, which occurs in other situations such as when land is up for rezoning.
Al Lucas, 63, has 30 acres adjacent to the city land and said he had no idea that tract was for sale, but wished he did.
“I receive no notification whatsoever that property was up for sale,” he said. “Had the community known the property would have been up for sale, there would have been other options. ... Absolutely, I feel we should have been told it was for sale.”
Micheel noted the city follows state law, which does not require notifying neighbors or placarding the site. Hart said he is confident in how the process was handled and didn’t see anything to suggest the city’s policy warrants review.
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