Court Blocks $1 Land Deal For New CU Headquarters
IOWA CITY, Iowa – A state court ordered a halt yesterday to a controversial transaction that would allow the University of Iowa Community CU to buy 20 acres of land in nearby North Liberty for $1 to build a new headquarters as part of a planned 64-acre development.
The temporary injunction effectively delays the closing of the transaction, scheduled for tomorrow, until at least January 4 when the court has set a hearing on the legality of the deal.
“Our clients are very pleased with the ruling in that it stops the transaction and the project in the short-term to enable further evaluation of the project,” said Vernon Squires, a Cedar Rapids, attorney representing Concerned Taxpayers of North Liberty, a group of residents trying to block the project.
Under the unusual plan, the city of North Liberty, located on Interstate 380, about mid-way between Iowa City and Cedar Rapids, would purchase 64 acres of undeveloped land on the west side of the city from an out-of-town group for $11 million, then transfer 24 acres to the credit union for $1. The remaining 40 acres would be purchased by a city-sponsored group called 380 Development Group for additional development.
Under the deal, the city will finance the purchase of the property by issuing tax-exempt urban renewal bonds.
The credit union plans to build a $20 million, 100,000 square-foot administrative office at the site and transfer as many as 175 jobs from nearby Iowa City initially, with projections of as many as 400 jobs eventually. Credit union officials did not return phone calls seeking comment yesterday.
But the group of concerned citizens–most of them members of the $1 billion credit union–object to the beneficial terms of the transaction, as well as the plans to rezone the property from multi-family to commercial use, according to Karen Fesler, a spokesman for the group and a credit union member. “We oppose it because of the financing and the way the city went about it,” she told the Credit Union Journal yesterday. “We have no problem with what the credit union is doing, they’re getting a good deal.”
The group, she said, is troubled by the financial incentives the city has offered, particularly the $1 land sale, in its competition with other nearby cities for commercial development. “There’s too many incentives,” she said. “This is a give-away.”