City terminates development agreement

Issues have risen between the city of Creston and Hot Air Brewing Company, with the later defaulting on a development agreement.

The city has terminated their development agreement with Hot Air Brewing Co., LLC and Above the Pub LLC, both owned by Katie Davidson, following a failure to pay property taxes.

The agreement, which was part of a funding requirement to receive a $100,000 Catalyst grant in 2020, was supposed to provide an 80% property tax rebate to Hot Air Brewing. The Community Catalyst Building Remediation Program assists communities with the redevelopment or rehabilitation of buildings to stimulate economic growth or reinvestment in the community. With a max of $50,000, the rebate was scheduled to begin this year. However, as the city began the appropriate paperwork, a problem was discovered.

“When that time came around, it was discovered that Hot Air had not paid the taxes on the building, so obviously we’re not going to rebate the taxes,” Creston Accounting Manager Mandy Parsons said. “That also puts them in default of the current development agreement.”

When this was discovered, a notice of default was sent to the appropriate parties, giving them 15 days to get up to date with tax payments. The default notice was sent July 31. However, Parsons said no reply or money was ever received.

“Really, there’s two options. You could just continue with it. We have no obligation to make any payments as long as the company is in default, or we could just terminate it,” Parsons said.

If the council left the agreement, no payments would be made to Hot Air Brewing in the future unless the taxes from previous years had first been paid. Even if paid, the brewery would not receive any rebate this year. The agreement is also non-transferable, so if the business sold, no money would be owed to future owners. This was specifically on the mind for numerous council members, as the brewery is currently for sale.

Rather than let the agreement hold, councilmember Rich Madison motioned to terminate the development agreement with Davidson, the council unanimously agreeing.

The city of Creston has other development agreements ongoing, such as JR Rentals, which also received a Catalyst grant.

In other council news…

The council has agreed to take back the empty lot at 120 North Maple St. in accordance with the development agreement signed with Maple Street Apartments, LLC. Though multiple citizens have displayed interest in purchasing the land from the city, no specific plans have been made yet.

During public forum, Cheyenne Roche accused the mayor of violating numerous people’s First Amendment rights following a series of actions on social media. Citing Lindke v. Freed, she gave the blocking of two citizens and a community rule on his Facebook page banning dissent and swearing as evidence to this violation.

Creston Chamber of Commerce Director Ellen Gerharz shared the parade route for the Southwest Iowa Hot Air Balloon Days, saying despite Maple Street construction, the route will cross Maple via Mills Street. A full list of event plans can be found in the CNA insert from Sept. 18 or online at www.crestoniowachamber.com.