Cedar Falls reviews deal with economic development group

Jul 27, 2010 — Waterloo-Cedar Falls Courier

Tina Hinz

Jul. 27, 2010 (McClatchy-Tribune Regional News delivered by Newstex) -- CEDAR FALLS -- The City Council has recommended approval of a revised funding agreement with the Greater Cedar Valley Alliance.

The council's Administration Committee, which includes all council members, met prior to the regular council meeting Monday to review the city's incentive payments to the economic development agency.

Councilman Frank Darrah abstained from the discussion, and Councilman Kamyar Enshayan was absent.

For years, the city has given the GCVA a $25,000 annual contribution, with the possibility of another $25,000 as a bonus for securing businesses in Cedar Falls. The proposed fiscal 2011 contract has the same payments scheduled but spells out in greater detail how the incentive may be earned.

According to Ron Gaines, the city's developmental services director, the new contract has some "significant changes."

Under the new agreement, the GCVA would earn:

-- $1,000 instead of $2,500 per acre of new development in the industrial park for every 10,000 square feet of building structure.

-- $1,000 instead of $2,500 per $250,000 of new taxable valuation added to the industrial park.

-- $250 per new full-time job at a minimum hourly wage of $18.08. The current contract is relatively the same, offering $2,500 per five new full-time equivalent positions at a minimum wage of $15.63 per hour.

-- possible quarterly payments of up to $5,000 based on a performance evaluation, with a total maximum not to exceed $20,000.

The last item is to possibly compensate the CVGA for significant staff time and effort invested in leads to attract businesses, Gaines said.

"They could end up tracking down five, 10, 20 leads, getting us maybe into the final one or two in the selection pool," he said. "It ultimately comes down to the business. With Target, we got into the last one or two cities to be selected, and what happens at the very end is kind of up to the company."

The city of Waterloo, which previously had paid the GCVA a flat $85,000 annual fee, recently changed its policy that guarantees only $28,500 with the ability to collect a maximum of $85,000 based on a set of performance criteria.

Waterloo, a major partner in Black Hawk County, moved $58,000 over to the incentive side, a 65 percent drop, noted Councilman Tom Hagarty.

He suggested Cedar Falls similarly shave $5,000 off the base contribution and add that amount to the incentive side. That would make the flat fee $20,000 and maximum incentive payments $30,000.

But Councilman Dave Wieland feels the CVGA will receive the maximum amount either way.

"If the Cedar Valley Alliance turns on their rockets like they have in the past, you're going to get up to $50,000 with no problem, so I don't have any problem front-ending it to give them the money to work with."

"I like the way we've been doing it," agreed Councilman John Runchey. "I think we get a pretty good bang for our buck. I really do."

The council likely will vote on the proposed contract at its next regular meeting Aug. 9.

Newstex ID: KRTB-0150-47374317