Spencer Daily Reporter: Local News: Spec building purchase on council agenda (05/16/09)

Calling it "a testament to the willingness of the community working together," Spencer City Manager Bob Fagen is going to recommend a financing plan for a $1.05 million, 40,000-square-foot spec building in the Green Industrial Center.

The recommendation will be considered by Spencer City Council members at their 6:30 p.m. meeting Monday at Spencer City Hall.

The cost of the building is $855,000, Fagen said, in his preview memo to the council. The operating cost and interest through 2012 is $118,609, land acquisition adds $51,520 to the financing plan, and a $24,271 contingency is built in.

"Iowa Lakes Electric Cooperative and Corn Belt are being looked at through grants and loans, to fund $614,400 of the project," Fagen said, in his memo. "If after, three years, the building is not sold, then SMU (Spencer Municipal Utilities) has graciously agreed to assume the financing of the portion being funded by ILEC and Corn Belt."

The city would fund $435,000 of the project, which includes the cost of land, operating and contingency costs as well as $300,000 of the building costs. The funding for the city's portion of the financing is coming from SMU.

Developers hope the spec building will jump start investment at the newly-developed and environmentally-friendly industrial park. The city is already working on road and infrastructure extensions to East Milwaukee Street. The extension will allow access to seven new lots totaling more than 40 acres near the Cardinal Baseball Complex in east Spencer.

In other discussion, council members will consider a $2.9 million amendment to the current city budget, which ends on June 30.

The changes are due in part to seed money for economic development opportunities, land purchases, a program to improve the look of storefronts and the Safe Routes to School program.

The amendment also is needed for group medical insurance, and a study to separate Spencer's storm water and sewer lines.

"It is also important to note that there is no increase in tax levies as it relates to the amendment," Fagen said as he recommended approval.

Some citizens also have concerns about the street assessment amounts for West Sixth Street, Ninth Avenue East and Deerfield Park Third Addition. The council will resume the public hearing process for those areas at Monday night's meeting.