Construction concerns council

The chance to get construction on the Agnew building started is drawing to a close, but Creston City Council still has concerns.

Located at 110 and 112 N. Maple St., a number of groups have come together in an attempt to refurbish the space into affordable apartments in the uptown area. Originally bought in 2019, the project has shifted around thanks to COVID and other financial difficulties.

“That project was quickly scuttled by COVID cost increases and supply chain issues. We redid the project,” Uptown Revitalization - Growth for Everyone (URGE) member Gabe Carroll said. “We decided that instead of a for-profit endeavor, it would make more sense to do it as a nonprofit partnership and try to get some additional funds that way so we could get the project completed, save the building and put it back on the tax rolls of the city.”

Before the council discussed the topic of the Agnew building, a number of residents shared their thoughts during the public forum Aug. 20.

Creston real estate agent Retta Ripperger said she was against the city helping private citizens with their businesses.

“I do not feel it is the city’s job to fund private people who will ultimately reap income from those buildings, unless there is some kind of a clause in there that would force them to repay all the money that was given to them in the long run,” Ripperger said. “Jesse Harris fixed up an old building. He put all his own money in, he didn’t come around asking for help.”

However, resident and property owner Jean Weisshaar was in favor of anything that would move the project forward.

“I would just like to say as an owner and citizen of this community, I would like to see some action on that building. I would like to see it refurbished, I would like to see people in that building, I would like to see activity,” Weisshaar said. “I think whatever we need to do to get that rolling, we should really consider it. If things don’t happen here, I think it’s going to be detrimental to everyone in this town.”

Carroll also spoke during the public forum, letting people know any profit from the first 15 years of the building would go toward the non-profit group and the developer wouldn’t receive any revenue until after that time.

Later in the meeting, URGE requested a $250,000 upfront Tax Increment Financing (TIF) loan, along with a $100,000 10-year tax abatement, to get started on the project. TIF is a revenue tool that uses taxes on future real estate gains to pay for the development of said real estate.

“We are asking for this upfront loan to satisfy the requirements from Pinnacle Bank, which is the partner bank we’ve been using,” Carroll said. “They have agreed to $550,000 if we can get this $250,000 of equity into the project. We have all the other funds raised. We’re ready to start the project.”

Some councilmembers took issue with the reference to $250,000, when in reality the group was asking for $350,000. Others were worried that Pinnacle Bank dropped their original loan amount of $800,000 to $550,000.

“The city in essence is taking the place of the bank and that concerns me. I don’t think we should be in that business,” councilmember Richard Madison said.

Carroll said he understood the risk of giving that much money upfront and would be happy to go with a disbursement schedule, as suggested by councilmember Josh Thompson.

“The proposal was we maybe do a disbursement schedule where, when a certain amount of work is completed, then we can release some of those funds,” Carroll said. “When the next milestone is completed, we can release additional funds, and then when we hit the final milestone, we get the final amount of funds and we can apply for that grant reimbursement.”

Carroll suggested the disbursement schedule begin after demolition of the inside of the building is complete, as that is the riskiest part of the project.

“Demolition is going to uncover everything that is inside there. We’re using the walls that are currently in there and just reorganizing the apartments, so we don’t expect to find anything, but if we do find anything unexpected, it’s going to be during the demolition phase,” Carroll said.

Partway through the discussion, Creston’s accounting manager Mandy Parsons shared multiple concerns she had with the project so far.

“Up until yesterday when I was included in an email, I thought the financial request from the city was an additional $250,000 but discovered it was actually $350,000,” Parsons said. “Has the council been provided with an updated budget and sources of funding for this project? Is there a firm written offer from Pinnacle Bank? Do we have written confirmation from Premier Contracting that they can complete the construction on time? Can they be held accountable if the grant deadlines are missed?”

Many more concerns Parsons shared had to do with the possible TIF.

“I have never doubted the community’s support for this project, and I support the project as well. However, it is my job to be mindful of taxpayer dollars,” Parsons said. “Except for the $225,000 LMI fund that was previously agreed to, I do not support any additional incentives provided upfront and I certainly do not want to see any TIF incentives that extend 20 years.”

LMI funds refer to money provided specifically for projects providing housing for low- and moderate-income people.

Councilmember Jocelyn Blazek said she wasn’t comfortable taking any action on the project until these concerns were cleared up. Additionally, the council would have to update their Urban Renewal Plan if they were to agree to the $350,000, which wouldn’t be quick. The original plan listed $300,000, which gave the council extra padding in case the earlier $225,000 agreed to changed. To update this, the council would have to hold a public hearing and go through approval process again.

Before ending the discussion, Carroll asked for a read on where the councilmembers were to see if there was a point in bringing back more information. Councilmembers Madison, Jen Worisek and Steve Wintermute said they were against the loan. Councilmembers Blazek, Thompson, Kiki Scarberry and Martin Graham said more information could sway them to a positive vote. Carroll plans to come to a future meeting to continue discussions regarding the future of the Agnew building.