Upper Explorerland to relocate headquarters out of Postville

submitted by Postville Herald

The Upper Explorerland Regional Planning Commission (UERPC) Board of Directors met in open session with 18 of its 24 members present Thursday night, September 23 at the organization's Postville headquarters.
In what would have surely been an otherwise unremarkable meeting filled with routine business, this particular meeting of the UERPC Board had before it a major decision: to relocate its headquarters to 325 Washington Street in Decorah - the former location of Bruening Rock Prodcuts, Inc. – or to 228 West Greene Street, Postville – the former headquarters of Allamakee-Clayton Rural Electric Cooperative (ACREC).
In attendance from Allamakee County was County Supervisor Kathy Campbell, Ray Whalen representing New Albin and Mayor Leigh Rekow of Postville. Larry Gibbs and Randy Keehner of the Clayton County Supervisors were representing the City of Garnavillo and Clayton County, respectively, along with Representative Roger Thomas for the City of Elkader and Darla Kelchen for the City of Strawberry Point in attendance for Clayton County.
For Fayette County, Leon Griebenow from the City of Elgin, Paul Ryan from the City of Oelwein, Representative Andrew Wenthe from Fayette County, Karla Organist from the City of Fayette, and Supervisor Michael Kennedy, UERPC Board Vice-Chair, were in attendance. Also representing the City of Oelwein in the stead of his normal proxy, Duane Brandt, was Oelwein Mayor Larry Murphy.
Howard County Treasurer Warren Steffen, representing the City of Cresco, and the UERPC Chair, Howard County Supervisor Janet McGovern were in attendance. For Winneshiek County, Supervisors Dean Darling and Les Askelson, along with Randy Uhl of Winneshiek County Development, were in attendance.
Absent from the meeting was representation from the City of Waukon by Kay Zimmerman, the City of Edgewood by Elise Bergan, Mayor Mark Bohle of Cresco, Decorah City Administrator Gerald Fruend, Charles Frana for the City of Calmar, and Barbara Ettleson for the City of Decorah.
Also in attendance was recently-hired UERPC Executive Director Aaron Burkes; Paul Foxwell, Executive Vice President and General Manager of the Allamake-Clayton Rural Electric Cooperative (ACREC); Councilmen Larry Moore and Jason Meyer of the City of Postville; as well as Allamakee County Supervisor Cloy Kuhse and various UERPC Department Heads.
For over a year-and-a-half, a group of UERPC Board Members and Department Heads known as the “Tiger Team” evaluated options in the region, seeking out the best possible recommendation for expanding their current offices.
Many buildings in the region were considered, and a September 9 meeting of the “Tiger Team” yielded a recommendation to move forward on the Bruening property in Decorah. Alternatively, after the last dismissal of the former ACREC building by the “Tiger Team” and prior to their September 9 meeting, members of Postville’s city government worked with ACREC to help revive the option and make an attractive proposal to the UERPC Board.
Director Burkes presented to the Board the proposal from ACREC, which included the former Postville headquarters building at 228 West Greene Street, as well as an adjacent vacant lot at 131 North Ogden Street, formerly used by ACREC as additional employee parking.
Out of “Concern for Community,” Foxwell was able to present an exclusive offer to the UERPC Board of $140,000, to include financing for 10 years at 3.6% as well as an additional $50,000 in financing as supplemental funding for ADA compliance, asbestos abatement, and replacement of the building’s heating plant.
Burkes estimated in his summary it would cost approximately $220,000 ($25 per square foot) to make the ACREC property move-in ready. That figure was later contested by Postville Mayor Rekow, who had secured bids not in excess of $30,000 for an exterior ramp for ADA compliance and the replacement of the heating system.
Also presented by Director Burkes was a proposal for the Decorah property at 325 Washington Street, held by Decorah Properties, Inc. (Keith Bruening, President). The Decorah proposal included a purchase price of $525,000, and seller financing at 5.5% on a 25-year amortization with a balloon payment after 15 years.
On this property, Burkes estimated approximately $60,000, or $6.67 per square foot, to make the property move-in ready. “I know a lot of people on the board are going to have to be able to justify to the people they’re representing what they’ve decided,” stated Allamakee County Supervisor Cloy Kuhse. “I come up with a figure for the 10 years, and [the ACREC building] should be paid off. The blank, to me, that we really need to have an answer for is when I look at the Bruening proposal, we’ve got $3,100 per month for 15 years... I come up with $558,000. What’s the amount of the balloon payment?”
To which Director Burkes replied, “I have not calculated that.” But he further noted it could be calculated easily. To make the Decorah option feasible, a substantial portion of the expenses - nearly 73% - are dependent upon an income offset from a partnership with Iowa Workforce Development. Whereas no options were presented to offset the expenses in Postville, Director Burkes later noted, “You’ve got the opportunity for partnerships, for leasing opportunities in Decorah that you don’t have here [in Postville], and realistically you probably won’t have in the near future.”
To address the Iowa Workforce Development (IWD) issue, Lori Adams, Workforce Development Center Division Administrator, and Joseph Walsh, Deputy Director, joined the Board Meeting via conference call. Adams commented that she toured the Decorah property with Director Burkes and others from the IWD after being contacted by Fern Rissman, Workforce Investment Act (WIA) Director in Postville.
“The facility clearly has some work that needs to be done if that location is purchased,” noted Adams. “But, I certainly saw it as a win-win for everyone. My recommendation to my leadership is that we are part of that project.”
Deputy Director Walsh noted that when he heard about the opportunity, “It makes perfect sense.” He continued to note that any political decisions are local decisions and “we’re not asking anybody to do something that doesn’t make sense for your community.”
UERPC Board Chair, Janet McGovern, stated to Deputy Director Walsh that “We do need to know the commitment you will make because the decision we make here tonight is based on that commitment... partially based on that commitment.”
Walsh replied, saying, “I haven’t seen anything that tells us, that explains to us what the cost is. If you’re in a position where you have to make a decision tonight... I’m not sure what to do with that.”
Burkes then stated, “I knew that we were kind of up against a time deadline here and we wouldn’t have all this hammered out in terms of details. I think the most important thing, really, was for us to get a sense that you guys are, at least in principle, 100-percent onboard.”
The conversation continued with various board members posing questions regarding IWD normal lease lengths and from where their funding originates. The IWD representatives noted there was no “cookie cutter” approach to their leasing model, that it varied based on community and circumstances.
Supervisor Kuhse asked if they had done anything in the range of 15 to 25 years, to which they replied a more standard long-term lease for the agency was in the five-year range. In response to Supervisor Campell’s question on funding, Walsh noted Iowa Legislature General Fund appropriations, as well as Federal Grants. He further stated, “It is a little bit dependent upon political whims, political situations that are in place. We do have clauses in our leases... if funding changes we can exit a lease.”
Walsh cited an example from approximately four years ago when 15 offices were closed statewide due to funding, but also noted that during his three-year tenure at IWD, no offices have closed.
Later in the discussion, Leon Griebenow from the City of Elgin stated that “the question Kathy [Campbell] should’ve asked Lisa [Lensing – UERPC Finance Manager] is ‘Can we afford either of these if we don’t have partners?’ And we aren’t going to get the partners here [in Postville] that we’re gonna [sic] get in Decorah, so we can not afford anything here [in Postville].”
In an effort to close the conversation with IWD and proceed with discussion, Director Burkes posed to Walsh, “What do you think the time frame is for when we could expect to actually get something reduced to writing?” Walsh replied that the agency is down on staff, that over 10% of the entire agency retired recently under an early retirement program. “I don’t say that to mean we can’t get on this right away. The quicker you guys can get us something, a more specific proposal, I think we can get on evaluating it immediately, and assessing the cost issues.”
As the nearly two-hour long conversation continued, Larry Murphy, Oelwein Mayor, noted that it has been his experience in his nearly 30 years in public office that the northeast Iowa five-county region has always cooperated. Murphy recalled a fire at a major employer in Oelwein a number of years ago. “The fire started at 5 o’clock in the afternoon, and by 10 o’clock that night, five Iowa communities had called the owner of that business offering to move them out of Oelwein, but not one of those calls came out of this region because historically these five counties have worked together in a very unique kind of way.”
Murphy continued, “I think the broader political issue... the perception is going to be moving from Postville, what that does to that relationship is the challenge you’ve got to think about. The reality is that this region has been pretty well served here. I represent Duane [Brandt]’s position on this, and from our vantage point, we prefer not to move out of Postville.”
In a supporting move behind Murphy’s position, State House Representative Roger Thomas added, “Representing the City of Elkader, I did have a conversation with our administration. They don’t favor the move to Decorah, because that would change the dynamics of the headquarters. You’re seeing some dynamics that I’ve seen be interesting, but like Larry [Murphy] said, cooperative amongst all these counties. For me to put on my ‘Upper Explorerland Hat,’ I don’t think that depending on your partners to pay for, to make a facility cash-flow or not-cash-flow is a good choice. Because I can tell you – and Andrew [Wenthe] is on the Appropriations Committee – whatever the political pundits think, a 15-percent cut in State spending will definitely jeopardize the commitment that Workforce Development has. I can’t support your effort to move to Decorah.”
Continuing on, Representative Andrew Wenthe of Fayette County questioned, “It sounds like a lot of people don’t think it’s economically feasible if partnerships don’t exist with the Decorah building to go forward... it sounds like the REC building wouldn’t be economically feasible either because there’s no chance for partnerships. I’m not sure that moving to the Bruening building is the right thing either.”
In response, Director Burkes offered, “To have a minimum-acceptable facility is an essential thing, and we don’t have that. [The Bruening building] is by far the most economical decision out there we can make.”
Karla Organist from the City of Fayette noted that the majority of the conversations have been focused on the monthly payments, “not what our overall investment in these properties which aren’t really that different in assessed value. You’re looking at, even if we get a 10-year contract from Workforce Development, you’re still looking at $200,000 more over the long term with the Decorah building than the one here in Postville. We really need to take a look at the long term cost of these two options... they’re not really equivalent here.”
In closing, in response to the arguments against the Decorah property, Director Burkes stated that there are partnership and leasing opportunities available in Decorah that there aren’t in Postville, “and realistically you probably won’t have in the near future.”
Other than the summary information packets prepared and submitted by Burkes, there was little discussion in favor of the Decorah property. Chairwoman McGovern said she would entertain a motion, and after a period of silence among the commission members, Warren Steffans, Howard County Treasurer, moved to purchase the Decorah property to include all stipulations in the proposed contract. The motion was seconded by Leon Griebenow of Elgin.
Vote was taken by ballot of the commission board members present, with the exception of Chairwoman McGovern and Oelwein Mayor Murphy. Though Murphy insisted the board appointment was for the Mayor of Oelwein with Councilman Duane Brandt as his appointed proxy, McGovern insisted that Brandt was the voting member, and proxy voting for Brandt by Murphy was disallowed.
Of the 18 members present, 16 anonymous votes by ballot were recorded as 10 “yes” and 6 “no.” McGovern declared the motion passed.
The commission continued on with routine business, and concluded the evening with the reading of Iowa Code 28E.18 Shared Use of Facilities, which states: "Before proceeding to construct or purchase a facility as otherwise provided by law, a public agency shall inquire of other public agencies having facilities within the same general geographic area concerning the availability of all or part of those facilities for rent or sharing by agreement with the inquiring public agency. If there are no suitable facilities available for rent or sharing, the governing body of the public agency shall record its findings in its meeting minutes."
It was determined and voted upon by the commission that no such facilities currently existed under government ownership. Friday morning, September 24, the UERPC submitted a news release billing the relocation as “plans to expand its regional footprint.” In the “expansion,” the UERPC will be relocating upwards of 20 staff members to the Decorah property, including the Executive Director, Finance Manager and various other managers and department heads. The plan also includes leaving a small contingent in the former Postville headquarters.