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North Liberty joins economic protocol

Tiffin a potential future participant
Iowa City Mayor Jim Throgmorton, Coralville Mayor John Lundell and North Liberty Mayor Terry Donahue sign the Economic Development Communication Plan Friday, Jan. 11, at the IC CoLab MERGE in Iowa City. The agreement seeks to prevent cities from incentivizing businesses to move to their community from a neighboring city in the Corridor. (photo courtesy of the Iowa City Area Development Group)

NORTH LIBERTY– North Liberty has joined Iowa City and Coralville in signing an economic development protocol vowing to play fair.

The mayors of Johnson County’s three largest cities came together to sign the agreement Friday, Jan. 11, at the IC CoLab MERGE, the headquarters of the Iowa City Area Development Group (ICAD).

The act seeks to prevent cities from incentivizing a business to move to a community from a neighboring city in the Corridor through urban renewal funds. It also puts in place steps of communication for a business to take should it decide to move from one city to another. Past controversies of such nature include Von Maur’s move from Iowa City’s Sycamore Mall to Coralville’s Iowa River Landing in 2012– a deal heavily subsidized by tax increment financing (TIF)– and Leepfrog Technologies’ expansion from Iowa City to Coralville’s University of Iowa Research Park three years later.

Building trust and goodwill

North Liberty City Administrator Ryan Heiar described the agreement as “building relationships with our neighboring communities; making sure we’re all on the same page in terms of our economic development; helping ICAD when they get put into a bit of a jam, when a business is trying to shop around; and also, hopefully preventing a business from leveraging one city over another for a higher incentive.”

Iowa law prohibits a city from incentivizing a business from a neighboring community to relocate; however, Heiar said, this does not cover all types of companies.

“The goal is to grow the pot… If we’re just moving the pieces around and using taxpayer money to do that, that’s not helping everyone in the end,” remarked Mark Nolte, president of the Iowa City Area Development Group (ICAD). “The past is in the past. We’re going to work together to grow the whole because that’s what’s in our best interest, because if we don’t have that trust between the communities when those other things come up that we need to work on like transportation… it makes it harder.”

Nolte said similar agreements are common in most Iowa metro areas when neighboring cities are large enough to compete with one another. The Des Moines metro area currently uses what’s called a “Fair Play” agreement, while Cedar Rapids/Marion/Hiawatha, the Quad Cities and Mason City/Clear Lake also have similar documents in place.

The ICAD president said in the past, some members of the developer and builder community played one community off one another through moving businesses around, adding, “The true incentive for any company should be strong public safety, good roads and good schools rather than a couple extra dollars on the front end.”

Nolte cited GEICO as an example of a proper move from Coralville to North Liberty. “A delegation from North Liberty didn’t go and meet with GEICO and say ‘we want you to move to North Liberty.’ It was just the best thing for their business,” he explained, citing its landlock in Coralville and significant number of employees coming from Cedar Rapids.

“It’s a breathing document; it will grow and evolve,” Nolte said. “But it’s a moment in time where we put the flag down and say from here forward this is how everyone is going to act.”

City council approval

The plan was approved by the Iowa City City Council on Nov. 21, while the city councils of both Coralville and North Liberty voted Dec. 11. North Liberty City council member Jim Sayre served as a lone voice of skepticism during its session, questioning the agreement’s importance and describing the leveraging of one city over another for the best business deal as good.

“No, it’s not good, because that’s your money and it’s my money and it’s everyone that lives in North Liberty’s money,” council member Chris Hoffman rebuked. “And if it’s being used to leverage against people that live in Coralville or Iowa City but there’s no more economic benefit to the entire community, jobs aren’t created.”

Sayre then noted that state law prevents such behavior to begin with.

“It can be forgotten that, while we each are our own municipality, businesses don’t care where the line is; they look out for what’s best for them, as well they should,” Heiar said. “We need to protect our region, protect our tax money to make sure we’re not being taken advantage of.”

“It’s unfortunate that we have to have a protocol and a three-page document that says ‘Let’s be nice,’” Sayre lamented.

“You’re right; it may not do anything more than that,” acknowledged Hoffman. “But if it keeps us all as a community doing the right thing because of our own community and our own neighbors, then that’s a big step.”

Mayor Terry Donahue admitted that a year and a half ago, he refused to sign such a document, but that provisions were since changed and that the agreement will spell the rules out from now onward for future city administrations. Sayre insisted new administrators won’t have to comply.

The council ultimately approved the economic communication plan with four affirmative and Sayre offering the sole opposition.

While Tiffin is not included in the current agreement, Nolte said the quickly growing city will likely be approached at some point in the future. Following city council approval, representatives of North Liberty encouraged Tiffin’s involved in the agreement, providing the document to Tiffin City Administrator Doug Boldt. Although the agreement was received by the Tiffin City Council last month, it has yet to be included in a work session agenda, as the city focuses on the 2019-2020 fiscal year budget.