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Legislative Ltr, Eminent Domain July 5, 2006 VIA Email and 151 Class Mail << Email >> <<CompleteOFFIC IALName _Address>> Re: HF 2351 - Eminent Domain Dear <<Title>> <<Las!>>, I am writing to encourage you to oppose efforts to override Governor Vilsak's veto of House File 2351, the eminent domain bill. This bill proposes a significant number of restrictive requirements that would severely diminishes a city's ability to 1) redevelop older areas of town such as downtowns or 2) expand for large-scale economic development opportunities that provide benefit to the entire community. In order to recognize the impact that current changes included in HF 2351 would have on a community such as Dubuque, it is important to give you a historical perspective on how desperate our situation was and how we have been able to address our economic plight of the 1980's. In 1983 the City of Dubuque was suffering from a number of community issues including: . A blighted downtown area with many vacant storefronts including a first floor vacancy rate of over 30% in 1985; . A bleak riverfront with dilapidated buildings, abandoned storage tanks and polluted ground; . All but non-existent annexation; . Vacant and abandoned homes; . The average value of a home fell 9% from FY1985 to FY1986 and did not rise again until 1993; . The City property tax rate reached $14.58 per thousand in 1987; . An average unemployment rate of 8.9% throughout the 1980's and reaching as high as 23% in 1982; . A mere 37,600 people were employed in Dubuque in 1983 (56,300 in May of 2006); and . Dubuque lost 7.8% of its population between 1980 and 1990 Dubuque's economy had become so problematic that our local Chamber of Commerce printed the following quote in their business publication The DubuQue Connection in 1983: "Dubuque's plight is becoming desperate. It suffered more severely during the recent recession, and has for the past three years had the highest unemployment rate of Iowa's SMSA's (largest cities). That unfortunate fact is no surprise to Dubuquers. It has been losing both industry and retail businesses consistently for the past decade." "Dubuque is losing its people. Recent estimates show 1 0% of the housing stock vacant or available for sale." However, Dubuque has had a dramatic economic turnaround, due in large part to critical economic development tools such as the use of urban renewal and eminent domain. The Dubuque story is one of a grassroots effort where local leaders made bold policy decisions and developed partnerships that have helped our community and the State of Iowa grow. The first initiative by Dubuque leaders involved in the expansion of our industrial parks. In the 1980's annexation for the development of industrial parks (or other development for that matter) was basically non-existent. This was reflected in our poor employment figures of only 37,600 people employed in Dubuque and an average unemployment rate of 8.9%. Through the annexation and acquisition of property and a partnership with Dubuque Initiatives, the city of Dubuque now has four industrial parks including: Kerper Industrial Park, Dubuque Industrial Center and most recently Dubuque Industrial Center West and Technology park. Combined these four industrial parks represent over 1,122 acres of development for local employers to expand and for the recruitment of new employers to Dubuque. To date there are over 28 major employers located in these parks, employing over 3,000 employees. In June 2006, the city entered into six new development agreements that will result in over $31 million of new construction and the creation of 85 new jobs. The second initiative involved the redevelopment of our Riverfront Area and downtown district and has become a national model for how communities can reinvent themselves and diversify their economic base. That initiative is, of course, the America's River project located at the Port of Dubuque. The Port of Dubuque area, formerly known as the Ice Harbor, was an old industrial area that at one time had a cold-storage operation, storage of logs and an oil operation all surrounded by a concrete floodwall. Coupled with environmental issues and property owners who showed no interest in making improvements to their property and no interest in negotiating with the City of Dubuque or private developers to sell their property to create a revitalized area - this area was destined to remain a blight on our community and the State of Iowa. However, through the use of such tools as Urban Renewal districts, designation of slum and blight areas and the potential to use eminent domain to bring all interested parties to the table and negotiate the city was able to bring about change. Today this thriving area is home to the America's River project and is responsible for our increased tourism and community pride. In 2003 Dubuque County led the state in increased travel expenditures by visitors with an increase in spending of 6.3% over 2002. The total spending in Dubuque County was $186 million; almost a dollar for dollar return on the America's River project investment. In 2005 that figure has now risen to over $201 million. The city has signed a development agreement with McGraw-Hili to construct a 135,000 square foot at a cost of over $18 million. When completed this facility is anticipated to house over 700 employees, up from their current 400 employees. The city has also seen a tremendous revitalization in downtown. Since 2000 over $34 million has been invested in public improvements, $75 million in building rehabilitations, nearly $119 million in new construction and 1,849 new jobs created in downtown and the Port of Dubuque. This is in large part due to the $188 million America's River Project and while the City of Dubuque used eminent domain on only one of the parcels acquired for this project to construct the America's River project, this is a project that would never have happened without the potential to acquire property through eminent domain as provided for in our current laws. Had the latest version of HF 2351 been in place during the past twenty years, the city of Dubuque would have continued on the downward spiral of economic disaster not our current state of significant economic growth. HF 2351 incorporates language that would be onerous for cities trying to develop urban renewal slum and blighted areas such as the Port of Dubuque or downtown. The laroest and the most overridinq concern in this bill is the lanquaqe reoardinq the burden of proof. As proposed. the Citv of Dubuque would be required to provide "clear and convincino evidence" reoardinq our burden of proof. This would hold cities to a much hiqher standard than what is required in a court of law where there must be a "preponderance of evidence." Any change in the current language is inviting litigation that will take years to resolve and probably kill any project. In addition, there are specific concerns that I would like to raise under each of the following sections: Sections 2 and 3 - Include language that requires that 75% of the parcels to be included in an urban renewal area must meet the definition of slum or blight. This new requirement would make it very difficult for cities to acquire non-slum and blighted properties along with slum and blighted properties in order to assemble the large tracts needed for construction of large projects. Rarely, when a community adopts an urban renewal district based upon the definition of slum and blight, do all of the parcels of property in the district meet the definition of slum and blight. Section 9 - Requires that the applicant acquiring the parcel would post the application for condemnation in a conspicuous place on the property to be condemned. This issue was previously addressed during the 2000 legislative session in response to concerns raised and the current system of mailing and publishing or alternative service adequately meets the needs of property owners and acquiring agencies in a fair and balanced manner. Section 13 - Requires that the compensation commission must deliberate in open session. This issue was also addressed through changes during the 2000 legislative session. The current provision requires that evidence and testimony be taken in open session but that deliberations may occur in closed session. The Compensation Commission is a commission made up of citizens with backgrounds that contribute to their ability to provide fair and balanced analysis about compensation that should be awarded. This commission, as part of their deliberation, must evaluate the competency and credibility of the property owner and officials of the acquiring agency and any expert appraisal witnesses. To subject the commission to undertake this discussion in a public forum would severely deter qualified persons from serving on the commission in order to avoid uncomfortable situations with the impacted parties. Section 15 - Modifies the language regarding just compensation and an additional payment for loss of existing business or farm operation. This language goes significantly beyond the existing relocation benefit requirements under Chapter 316 of the Code of Iowa and the Uniform Relocation Assistant and Real Property Acquisition Policies Act. These two provisions provide more than adequate compensation to persons whose properties are taken and who must move the business, farm operation or place of residence. Section 19 - States that if a parcel of property acquired through eminent domain is not used, this language would give the prior owner of the parcel has the right to purchase the property back at a price equal to the current appraised value of the real property or the fair market value of the property at the time it was acquired through eminent domain. The provision does not take into account appreciation in value of the property which may have occurred from the time it was acquired and the time it is offered for sale nor does it fairly compensate the public for its investment. Section 20 - Would allow the prior owner to reacquire the property if the acquiring agency has not, within five years of its acquisition, used the property for the purpose stated in the application and has not offered to sell the property back to the prior owner. This language is particularly onerous for large-scale projects that may take longer than five years to plan, design, finance, acquire property and construct the improvement. There are a number of large scale projects such as the construction of a new bridge, arterials; landfills etc. that take longer than five years. Initial planning for the America's River Project first began in 1995. This language would inhibit cities abilities to acquire and hold onto property until such time as needed for the construction of large scale projects. Based upon the above information, I encourage you to oppose efforts to override Governor Vilsaks's veto of HF 2351 and support efforts to retain a city's ability to use eminent domain for redevelopment of downtowns as well as for large scale economic development projects that benefit the community. Thank you for your continued efforts on behalf of cities. Sincerely, Michael C. Van Milligen City Manager MCVM:cs Cc: Major Roy D. Buol Dubuque City Council Susan Judkins, Director of Governmental Affairs, Iowa League of Cities Rick Dickinson, Greater Dubuque Development Corporation Steward Sandstrom, Dubuque Area Chamber of Commerce Dan LoBianco, Dubuque Main Street Ltd. Barry Lindahl, Corporation Counsel Cindy Steinhauser, Assistant City Manager Dave Heiar, Economic Development Director The Honorable Mike Connolly Senate Chamber Iowa Capitol Building Des Moines, IA 50319 The Honorable Tom Hancock Senate Chamber Iowa Capitol Building Des Moines, IA 50319 The Honorable Roger Stewart Senate Chamber Iowa Capitol Building Des Moines, IA 50319 The Honorable Pam Jochum House Chamber Iowa Capitol Building Des Moines, IA 50319 The Honorable Pat Murphy House Chamber Iowa Capitol Building Des Moines, IA 50319 The Honorable Thomas Schueller House Chamber Iowa Capitol Building Des Moines, IA 50319 The Honorable Steve Lukan House Chamber Iowa Capitol Building Des Moines, IA 50319 The Honorable Ray Zirkelbach House Chamber Iowa Capitol Building Des Moines, IA 50319