Sweetheart $1 CU Land Deal Challenged In Court
IOWA CITY, Iowa – City officials were expected last night to approve a zoning change that would facilitate construction of a 100,000 headquarters development for University of Iowa Community CU, even as the project was headed to court yesterday afternoon.
A group of area residents, calling the project a “sweetheart” deal for the credit union, are seeking to block the project, entailing the city’s sale of 24 acres to the $1.1 billion credit union for $1. The group claims that a quasi-private entity created to develop the 64-acre project did not broker the land deal properly in agreeing to the $1 price. The project for the credit union, currently headquartered in nearby Iowa City, is planned to anchor a major commercial and residential development at the site.
On Oct. 26, the city agreed to a purchase agreement that would allow the 380 Development Group to purchase the land near Interstate-380, commonly referred to as The Villas, for the credit union project. During yesterday’s three-hour hearing, the city argued that its method for pursuing the project was standard for municipalities.
The state’s Urban Renewal Act requires that the city have a third-party development group facilitate a sale because it will be selling the land to the credit union for below-fair-market price. The residents’ group, Concerned Taxpayers of North Liberty, succeeded in getting the state court to temporarily block the deal just as the two sides were getting ready to pass the papers near year end.
Both parties in the case will file briefs within the next month and then the judge will decide whether to issue a permanent injunction.
City officials are intent on moving ahead with the development. The planning and zoning commission were expected last night to vote to recommend the City Council change the zoning of The Villas development from residential to part commercial and part office research park to accommodate the credit union project.