Coralville doubles down on the Iowa River Landing

Not confident, apparently, with their chances of success in the lawsuit filed against them, Coralville has counter-sued the group of developers and business that had the audacity to question the legal merit of Coralville’s high dollar give-away to Oliver McMillan and Von Maur.  Oliver McMillan is  the California developer in charge of doing Coralville’s dirty work in getting the land and cash into Von Maur’s hand.  Von Maur is a department store that “rarely has any customers and carries old lady fashions. It reminds me of the department store in ‘Shopgirl'” according to my friend Adam.

Coralville countersues in Von Maur case by Emily Schettler in the Press-Citizen, Apr. 16, 2012

In court documents filed this morning, Coralville alleges intentional interference with contract and civil conspiracy by those who brought the original lawsuit: A group of eight developers, businesspeople, property owners and 18 area businesses.

In their countersuit, the city argued that the original group of plaintiffs “intentionally and improperly interfered with contract(s) by filing this lawsuit” to prevent the counterclaimants, Coralville and its master developer OliverMcMillan, from proceeding with contracts it had entered into related to work within the city’s Iowa River Landing district.

In the counterclaim, the city argues that the group’s conduct was “willful, wanton, and malicious and in conscious and reckless disregard of Counterclaimants’ rights.”

How dare they question our actions, screams the business friendly city?  Does this mean that all those people who harp about Iowa City being business unfriendly next to wonderful accommodating Coralville?

As a spectator in this, I say bring it on.

To digress slightly, I actually support the development of the Iowa River Landing, even if it did kill Dolls, Inc.  And I support government supported development (I believe in stimulus).  What I don’t support is forgoing years and years of tax receipts and unfairly shutting out private developers.  As I’ve pointed out before, Coralville has a lot in common with New Jersey.

At this point the ire of the community seems to be directed at Kelly Hayworth, the Coralville City Administrator, and Oliver McMillan, the San Diego developer.  And I believe they both deserve plenty of ire.  But when is the city council that sat idly by while Hayworth and McMillan hatched their plans going to be called to account for this?


Judge Marsha Bergan declines to dismiss Iowa River Landing suit

After rejecting a request for an immediate injunction to keep Coralville from moving forward with the Oliver McMillan/Von Maur land giveaway, District Court Judge Marsha Bergan dismissed Coralville’s request to have the Iowa River Landing lawsuit thrown out.

Judge denies Coralville’s request to dismiss lawsuit by Emily Schettler in the Iowa City Press Citizen, Mar. 30, 2012

District Court Judge Marsha Bergan has denied the city of Coralville’s request to dismiss a lawsuit against the city over its development practices in the Iowa River Landing.

Attorneys for the city had asked Bergan to dismiss a lawsuit brought by area developers and business owners who were seeking an injunction to prevent the city from completing a proposed land deal with Von Maur.

My short summation of the case:  Coralville is giving San Diego developer Oliver McMillan $1.5 million with which he will buy a prime parcel of land in the Iowa River Landing.  He is then required to turn around and sell that land to Von Maur for $10.  (This is, of course, just a small piece of the ~$14 million puzzle of tricks Coralville is using to incentivize Von Maur to abandon Iowa City.)  Iowa law states that cities cannot sell land below market value, but apparently laws don’t apply when you call a project urban renewal.

Ultimately I’m not sure what the plaintiffs in this case hope to get, and I’m doubtful that they will prevail in the end.  Hopefully, though, this case will open a bit wider the window that is exposing the shady chicanery of Kelly Hayworth and the City of Coralville.


Judge Marsha Bergan rules in favor of Coralville in Iowa River Landing hearing

On Monday Judge Marsha Bergan issued her ruling in response to a request for an injunction to stop Coralville from moving forward with their development plans involving Von Maur and the San Diego Developer Oliver McMillan.  The suit was brought by local businesspeople who argued that the city’s actions were in violation of state law and provided terms that were unfair to other developers.  Judge Bergen declined to issue the injunction, but the case itself will go forward with a motion by the city to dismiss to be heard sometime down the road.

Judge denies injunction request for Coralville Von Maur project by Gregg Hennigan with reporting by Dave Dewitte in the Cedar Rapids Gazette Mar. 26, 2012

The city agreed to give San Diego-based Oliver McMillan a $1.5 million economic development grant to buy the property on the condition the firm would then sell the land to Von Maur for $10.

That sale is expected to occur in the next week or so.

The plaintiffs argued the land deal violated state law preventing a city of disposing of property by gift. Bergan, however, agreed with the defendants that Iowa’s urban renewal law says a public body shall not be restricted by other statutory provisions and that the transaction was not a gift because it involved commitments beyond money that must be taken into consideration.

So I guess when you call something urban renewal, other laws don’t apply.  I’m not surprised by this ruling, and it seems to be the right legal response–still, what Coralville is doing at the Iowa River Landing vis a vis stealing Von Maur from Iowa City and using every trick in the book to do so is wrong.

 


The Iowa River Landing poaching project persists

Not happy to simply steal Von Maur from Iowa City, the San Diego based developer in charge of doing Coralville’s dirty work is approaching various downtown Iowa City businesses in an effort to lure them to the Iowa River Landing.

Iowa River Landing tests waters with I.C. businesses by Dave DeWitte from the (Cedar Rapids) Gazette, Mar. 20, 2012

Mark Weaver, owner of the outdoor apparel and equipment retail store Active Endeavors at 138 S. Clinton St. said the invitation was “obviously flattering, but we’re committed to the downtown.”

[…]

The owner of Chait Galleries, 218 E. Washington St., also was invited to consider opening in Iowa River Landing.

Owner Benjamin Chait said he’s impressed by Coralville’s positive approach to helping businesses, which he considers a stark and favorable contrast to Iowa City’s. Nevertheless, Iowa River Landing didn’t fit Chait’s vision for the contemporary art gallery.

[…]

Catherine Champion of Catherine’s Boutique, 7 S. Dubuque St., confirmed that she was contacted about Iowa River Landing. Champion said she loves being downtown, considers the prospects bright and isn’t considering a relocation to Iowa River Landing.

Thank you to these businesses for their commitment to downtown Iowa City.  Please reward them with your patronage.

In other Iowa River Landing news, Judge Marsha Bergan heard arguments today in a case brought by local IC/CV businesspeople seeking to block Coralville from using overtly under-the-table means to donate a large piece of land to Von Maur.

Coralville, group make their arguments in court by Emily Schettler from the Iowa City Press-Citizen, Mar. 20, 2012

A group of area business owners and developers has requested an injunction that would prevent the city from moving forward with plans to sell about 7.5 acres of property in the IRL to Von Maur to use to build an 80,000-square-foot department store.

The city offered Von Maur more than $14 million in financial incentives to locate in the IRL.

Attorneys for the plaintiff group argued Tuesday afternoon in Johnson County District Court that the proposed land sale violates several sections of Iowa Code and that the city’s use of tax dollars to subsidize development provides an unfair advantage with which private developers cannot compete.

[…]

The crux of the plaintiffs’ argument is focused on the city’s hiring of OliverMcMillan, a San Diego-based firm, as its master developer and Coralville’s use of the company as a go-between in its land sale to Von Maur.

Robert Hatala, an attorney for the plaintiffs, argued that the city was secretive about selecting a master developer for the IRL, making it difficult for other businesses to present their own bids for that role.

The plaintiffs also questioned the legality of the land sale to Von Maur. Coralville plans to provide OliverMcMillan with a $1.5 million economic development grant to purchase the land from the city. OliverMcMillan is then required to sell the land to Von Maur for $10. Iowa Code prohibits a city from gifting land away or selling it below fair market value.

I have used my editorial judgement to leave out the arguments made on behalf of Coralville.  I can boil them down to this: Hey, we’re going to make some money for us and help Coralville grow, why are you asking so many questions?