The city of Clear Lake is setting the stage for what it hopes is the most significant development along Interstate 35 between Owatonna, Minnesota, and Ames.
The steps to make that hope a reality were laid out by Clear Lake City Administrator Scott Flory Monday evening during the City Council meeting.
“We’re to the point where, I think, we have a good probability that we’ll see projects emerge here and I think one in particular will take place here soon,” he said.
Flory told the council a developer is interested in building a hotel, conference center and restaurant costing more than $16 million in the Courtway Park Development Subdivision, nearly 64 acres east of Interstate 35 and north of Highway 122, where Andrews Prestressed Concrete once stood, in Clear Lake.
The general scope of the development, which he described as “preliminary,” “tentative” and “subject to change,” is a 70-room mid- to upper-scale hotel, 9,000-square-foot conference center that’d accommodate professional conferences, not concerts, for at least 600 people, and an approximately 5,000-square-foot restaurant.
The scope was outlined in a preliminary draft letter of intent Flory, who said he anticipated disclosing the name of the developer in August, presented to the council on Monday.
He said the city is looking to offer the developer, who he described as having a measurable track record of successful projects across Iowa and other states, a forgivable loan for between $3.75 million and $4 million that’d be paid over a multi-year period by revenue from new property and sales tax generated by the development as well as other future developments in the subdivision, current and future tax increment financing and its consolidated urban renewal area.
“In terms of implications to the taxpayer, I cannot envision a scenario where there are any,” Flory said. “That’s not an outright guarantee ... I suppose something unforeseeable can happen, but that would certainly be an unusual event.”
Councilman Bennett Smith praised Flory for his “very clean, very straightforward” approach to funding the project without undue burden on the city’s taxpayers.
“I don’t want to say risk-free, but it seems pretty close to me in the approach you’ve taken here to protect the taxpayers of Clear Lake,” he said.
Flory said it’s a very conservative package compared to other cities’ economic development incentives, but it isn’t unusual.
The council will likely act on a formal letter of intent at its Aug. 5 meeting to enable Clear Lake and the developer to take the necessary steps to formally consider a development agreement.
In the coming months, the council will also amend its urban renewal plan to better position itself to offer development incentives in the subdivision.
“That’s why I say it’s not a spike the ball. We’re nowhere near the end zone, so we have a long ways to go,” Flory said. “This is the very first half step here.”
Flory’s report came after the City Council, with Dana Brant absent, unanimously approved the final plat for the Courtway Park Development Subdivision comprising 11 lots — six highway commercial and five light industrial — and two roadways and curb and gutter on nearly 64 acres east of Interstate 35 and north of Highway 122.
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The land is owned by TDFUEL LLC, according to Cerro Gordo County property records. TDFUEL is owned by Lorrie Hall, of Sheffield, according to documents filed with the Iowa Secretary of State.
The city’s Planning and Zoning Commission reviewed the final plat Thursday and recommended its approval. Its approval allows Mike Ritter, Clear Lake’s building official, to issue building permits in the development.
In June, a site plan for an Old Dominion Freight Line service center and parking lot were presented to the Planning and Zoning Commission and approved for council review.
The proposed fenced-in center, including 31 overhead doors, a small office, and parking lot, would be positioned in the northernmost lot of the Courtway Park Development. A future dock expansion and fuel station are also incorporated in the site plan.
Old Dominion is a regional and national less-than-truckload, or small freight, motor carrier with about 233 service centers across 48 states, 45,000 tractors and trailers and 21,000 full-time employees.
Ritter said city officials haven’t received final plans from Old Dominion but anticipate they will soon.
The purchase of the former Andrews Prestressed Concrete property and the city’s $1.8 million utility and street improvement project on North 32nd Street — adjacent to the Courtway Park Development Subdivision — this spring were catalysts for transforming the site from an eyesore into an economic development opportunity.
The street and utility project, awarded to McKiness Excavating Inc. in March, includes new pavement, sanitary sewer, water mains and storm sewer. It’s scheduled to be completed by Oct. 31.
Jason Petersburg, an engineer with Veentra & Kimm, told the council the project is ahead of schedule and progressing well. He said the project’s subcontractor Wicks Construction, of Decorah, will likely begin and complete concrete paving before the end of July, weather permitting.
“We need that for the rest of it to fall into place,” said Mayor Nelson Crabb.
He said the city’s been financially preparing for economic development like the one proposed for more than a decade.
“We are financially in good shape because we have been diligent all these years,” Crabb said. “As soon as this gets off the ground so to speak, then we will see some of the fruit come to us.
“We are well-prepared. We have been well-prepared. We will be well-prepared in the future.”