County considers financial assistance to develop former golf course

Union County Board of Supervisors Monday agreed to find legal assistance to review a proposal for county funds to be used to build a road in the former Pine Valley Golf Course west of Creston. The road would be an incentive for lots on the course to be purchased for new home construction. The road would eventually be given to Union County.

No formal action was taken.

In late 2021, Chad Rieck and others purchased the golf course property with the vision of converting it into a housing development. Rieck prefers the road to be built first leading to the places where houses can be built.

Rieck, along with Kyle Weaver who was in attendance, suggested using tax increment financing (TIF) to fund the road. TIF is when the property taxes generated in a designated area are used only for improvements and maintenance within the area. Two years ago, the property was considered in a county wide revitalization program where tax incentives are applied to new property construction. That program will not benefit a road.

“If we do that, we can’t tax abate the property,” Supervisor Rick Friday said about shifting the incentive programs.

“If we don’t do it, we won’t be doing anything. The cost of road is what we are still trying to figure out. Banks won’t loan $800,000,” Rieck said. “If we get money on the front side, which is better than nothing.”

The proposed road, a cul-de-sac, would be concrete, 24-feet wide with rock shoulders. “A typical road design. The road is about half mile,” said Austin Smith, an engineer from Garden and Associates. Rieck said the road would eventually be given to the county for it to maintain.

Rieck said there has been interest from buyers for the lots, but he doesn’t have price estimates. “We have an $800,000 hurdle,” he said, referring to the road wondering how that could impact lot costs.

Rieck said a plan would be he and Weaver cover the cost of the road construction. Sales of the lots would be applied to road construction costs. Rieck said there are legal questions with the plan to give the road to the county without any compensation.

“It’s not necessarily feasible, in some instances, to go out to take a property like this that is going to add lots of taxes and us to come up on the front side. That is where we are struggling,” Rieck said. “There is not a bank that is going to do it.”

Friday asked if the road was built using county funds, but no lots were sold, who would be responsible for the road expense. Weaver said he and the other owners would have to pay.

“We would be the ones making the payment,” Weaver said. “The bank would give us a letter of credit if there is a bond attached. If we gave it to the county to maintain, we have no collateral from where the money came from. They are not going to let us part with that until it’s paid off which would be when we collect enough TIF money.”

Weaver expects banks would require the golf course property owners’ personal assets as collateral.

“If we don’t sell enough lots to generate it, we are on the hook for the difference,” Weaver said. “If we put the $800,000 road in and retain it, that $800,000 is going to those 12 lots and less likely we have 12 lots and more houses or anything. We are building into the prices of lots. We are not just going to give it away.”

The approximate 36 acres is divided into 12 lots ranging in size from 2 to 4 acres. Union County Assessor Mindy Schaefer, who was in attendance, said it’s a “perfect world” if all 12 lots were sold at about the same time and home construction was also at the same time to maximize the flow of property tax revenue. She said higher assessed homes are also beneficial. Rieck said the lots would have septic systems and Southern Iowa Rural Water Association would provide water.

“How do we continue to grow and build new things if we don’t have TIF on front side to pay for infrastructure,” Rieck said.

In other supervisor news...

A bid from Herberger Construction of Indianola was approved for what is called the Green Valley Road bridge. The bid, which was one of two received, was at $807,214. A construction date has not been determined. Green Valley Lake Road bridge is north of 150th.

Union County Engineer Christian Boehemer said in August he expects the road to be closed for four to six months for the work. Traffic will be detoured. Engineer estimates for the work were $820,000 and the county’s TIF budget is expected to help pay. Those are the property tax revenues from wind turbines in the area.

Supervisors approved reappointing Paul Miller to the county’s Veterans Affairs board for a three-year term expiring in June 2027.