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Answers to Riverside's questions
Iowa City Press-Citizen
September 20, 2006
[Note: This material is copyright by the Press-Citizen, and is reproduced here as a matter of "fair use" for non-commercial, educational purposes only. Any other use may require the prior approval of the Iowa City Press-Citizen.]
City of Riverside
Questions & Answers
Proposed Public/Private Partnership with Earthpark
September 11, 2006
1) We would like a breakdown of all the projected finances and where they are coming from?
Answer: Please see Sources of Project Funds in the Earthpark booklet.
2) What is the projected capital cost of the project?
Answer: Earthpark’s proposed capital budget is $155 million inclusive of planning, design and startup costs.
3) Is Vision Iowa providing a matching grant of $20 million? Are you seeking $25 million from the private or municipal entities?
Answer: We anticipate total state support of approximately $20 million, inclusive of Vision Iowa funds. In addition, the Earthpark board set a $25 million local funding goal through the public-private partnership. This can be a combination of public and private funds generated by the economic lift the combined partnership would create.
4) Since the city is responsible for requesting the Vision Iowa grant funds what happens if Earthpark fails- does the city have to pay the money back?
5) Is the city responsible for filling out the grant papers or will an Earthpark represen-tative do that and the city will sign the application?
Answer: Earthpark would be willing to take the lead on completing the grant application, but staff would need input from the city. As a non-profit, Earthpark would request the city reimburse the organization for some portion of the grant administration if our collective efforts are successful and the grant is approved.
6) Will applying for the Vision Iowa grant (if given) then affect the possibility of future grant requests since we will already have received such a large grant?
Answer: We believe success breeds success. While a Vision Iowa grant award for Earthpark might lesson the chances of an immediate award from the same program, this would ultimately depend on the availability of funds and the granting agency’s priorities. Some communities which have received Vision Iowa grants are applying for second projects.
7) Is there a difference of $40 million dollars that will still have to be sought [in the capital budget]? And if so who will be asking businesses or private parties [to make] that contributions?
Answer: Additional funding of approximately $40 million is required to build the project at the 300,000 square foot scale presently envisioned. Multiple high net individuals and corporate sources are being solicited to help meet this funding gap. There is also the possibility of some structured debt financing and/or some deferment of capital expenditures.
8) Will there be any county involvement and if so to what extent?
Answer: Washington County will need to determine what level of interest it has in helping Earthpark succeed. Some financial support from the County will be required by Vision Iowa.
The Washington County Economic Development Department has been responsive to our initial efforts to learn more about local partnership opportunities. In fact, local representatives have already begun to identify potential project synergies that reach beyond education and tourism.
For example, there are opportunities to link our project’s mission and alternative energy goals with local producers of ethanol, biodiesel, and methane gas through centralized processing of manure and food wastes.
9) Is the amount for monthly water/sewer usage figured into the monthly operating costs?
Answer: Yes, although Earthpark’s preliminary operating cost estimates may be high because we based water and wastewater usage on Des Moines data. These figures would be adjusted to meet local market conditions.
10) What projections do you have for monthly water/sewer usage?
Answer: Our preliminary estimates for fresh water use is 50 million gallons per year. Wastewater generation is estimated at 10 million gallons per year. We are early in the design process so our projec-tions are still rough. However, we have attempted to be conservative (high) in our usage and generation estimates.
Depending on project needs and local constraints, it is possible that a portion of our freshwater needs may be met by non-potable sources including roof capture of rainwater.
Alternatively, non-treated well or surface water might be required for aquatic species that are sensitive to chlorine or other additives to the city’s drinking water supply.
11) Is the cost of getting the infrastructure to your site figured into the cost you are asking the city to contribute?
Answer: We are asking our public and private partners to have utilities available at our parcel boundary. These costs are not included in the $25 million local funding match.
12) Are you projecting 100% of the hotel/motel tax revenues to be put towards the Earthpark project?
Answer: No. We are proposing an equal sharing of these future revenues. One option might be to pass a 7% hotel/motel tax that will largely be paid by non-residents. The tax revenue from hotels and motels within the “Earthpark district” might be allocated as follows: 3.5% to the city/county and 3.5% to Earthpark.
13) You have made numerous
projections to expected revenue to go to the Earthpark project. What is
your backup if one of them does not work out? Ex. Hotel/motel tax fails,
Vision Iowa grant turned down etc.
Answer: Earthpark will not succeed without the help of a strong public-private partnership. While there may be alternative strategies if certain financial assumptions are not met, others may result in a project that is not actionable at the Riverside location.
14) Currently we have no hotels to collect hotel/motel tax from.
Answer: This is understood. However, with up to a million visitors coming to Earthpark each year, it is likely that Riverside would see the development of a variety of new motels at various price points to service visitors coming to the area. The overwhelming portion of this tax revenue would be paid by non-residents.
15) Who is financially responsible if Earthpark fails?
Answer: If Earthpark were to go into bankruptcy, the first claim on any of Earthpark’s remaining assets would likely be to those who loaned money to the project. Any remaining residual value left over after paying off creditors would accrue to the not-for-profit organization.
It is possible that any remaining fund balance would be transferred to another charitable purpose consistent with Earthpark’s Articles of Incorporation and Bylaws.
16) How do you keep operating costs in line if you do not get the projected traffic you hope to meet the costs of running Earthpark?
Answer: While operating costs can be managed to an extent, it is equally important to manage and diversify the sources of support to the organization.
This question illustrates why it is important for Earthpark to be an integral part of a solid public-private partnership that drives visitation not only to our venue, but to the Casino and other future amenities that can help contribute to Earthpark’s bottom line: such as, a hotel waterpark, supporting restaurants & retail operations, etc.
Earthpark will have a greater chance of success, if our public and private partners share in our success and help us weather any short-term shortfalls in visitation. In addition, Riverside’s location is near a strong and vibrant corridor that is growing and has strong competitive advantages such as a world class university.
17) What is the deadline for filing the Vision Iowa grant? When would we know the results?
Answer: Typically the Vision Iowa grants have been administered on a rolling basis subject to funding available. Earthpark would anticipate a submission in early 2007, with a decision shortly thereafter.
18) What do you feel [were] the main areas of concern you had when dealing with Coralville?
Answer: The public-private partnership was challenged by a lack of clarity on our site location, terms of the property transfer, and consensus on the piece parts and timing of the masterplan for the Iowa River Landing (IRL) district.
Notwithstanding those issues, we had a vibrant Community Advisory Council and many encouraging friends in the Coralville area.
19) Why do you feel Riverside would be a good place to locate Earthpark?
Answer: The City of Riverside has a number of strategic advantages that are attractive to Earthpark and other potential partners. This would include Riverside’s:
• Bucolic setting and proximate
location to the Iowa City Corridor;
• the presence of the Riverside Casino and Golf Resort as a high-end entertainment focal point and its ability to serve as an economic engine for the region;
Earthpark’s host community will need the sort of determination, consensus, and commitment that a smaller community can deliver to contribute to our collective success.
20) Will there be hunting restrictions on Goosebottom land if the River Products site is developed?
DNR and local authorities have jurisdiction over hunting rules and regulations. Earthpark intends to be a good neighbor and would like to accommodate existing and prior land uses on adjacent property consistent with our need to deliver a safe, enjoyable and high quality visitor experience.
We would like to thank all of those residents who expressed an interest in learning more about Earthpark, including those who submitted questions, visited our website, or attended one or more of our community presentations.
We appreciate your community’s interest.
-- David Oman