Legislative Ltr, Eminent Domain
July 5, 2006
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<<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