November-December 2004 Big River
How
do you generate jobs without selling off paradise? Two rivertowns look for
answers.
By Trudy Balcom and Pamela Eyden
Sny Magill is the odd moniker of a cold water trout stream that flows to the Mississippi River through a sparsely populated, narrow valley near McGregor, Iowa. It’s usually a quiet stream with just a few ripples on the surface, but a proposed development on the ridge above it is causing plenty of ripples — ripples of public debate, legal battles and controversy, as two nearby towns and a county struggle with development in a rural setting.
Launched in 2001, the $25-million Legacy Project was an ambitious plan to increase tourism and create jobs in the area. The plan had three components: first, to build a golf course, housing development and indoor-waterpark resort hotel on the ridge above Sny Magill Creek, about three miles southwest of McGregor; second was the Trail of Two Cities, a pedestrian-bicycle trail that would link Marquette (pop. 641) and McGregor (pop. 917) via the railroad right-of-way along the Mississippi River; and the third component was for streetscape improvements for the two towns.
Cathy Corpian, who was on the McGregor City Council for eight years and owns a business in town, was one of its early supporters.
“Before this all started, I went to the Wisconsin Dells, to the Kalahari Waterpark, and did research. They showed me the [attendance] numbers for the indoor water park. After five years, their winter numbers almost top the summer numbers. All the businesses in town have prospered from that indoor water park.
“With Clayton County having ten percent unemployment, we need the jobs around here. Maybe they are minimum wage, but at least it’s a stepping stone.
“There has been controversy about this, but you’d be hard-pressed to find business people in Clayton County that are opposed to it,” she said.
Bob Walke, of Guttenberg, one of three members of the Clayton County Board of Supervisors, agreed.
“Clayton County has lost population over the last 20 years. People come here and admire the scenery, but they go to Prairie du Chien, Dubuque and Decorah to spend their money. I’d say the people of the county feel very supportive of this plan.”
Marquette and McGregor submitted their Legacy Project proposal to Vision Iowa in 2001. Vision Iowa is a program created by the state of Iowa to promote tourism and economic development. Run by a board selected by the governor, Vision Iowa distributes money to cities and counties on a competitive basis. From an original pool of $215 million in revenues from the gaming industry, Vision Iowa has distributed about $208 million, including several high-profile projects in Mississippi River cities, including Davenport and Dubuque.
The Legacy Project seemed tailor-made for Vision Iowa dollars and, indeed, the initiative was awarded $5 million in October 2001.
But then the project began to unravel.
First, the owner of the property originally selected for the development backed out. A new offer of 390 acres of rolling farmland and wooded hills was suitable, but it was within the jurisdiction of Clayton County (pop. 18,454), not the City of McGregor. The Vision Iowa Board required that the county update its comprehensive plan, untouched since the 1970s. The process slowed.
Meanwhile, some neighbors and community members began to protest the plan, saying they lived in a peaceful, rural setting and wanted to keep it that way.
Tim Mason, 54, lives in a farmhouse on the bluff above Sny Magill Creek and works full time as a guard at the prison at Boscobel, Wis. When he was growing up, Tim and other kids in the Marquette and McGregor area took swimming lessons in the creek. He still enjoys kayaking the quiet slough where the creek joins the river, although he has less opportunity for that now because he has been busy with the Concerned Citizens of Clayton County, a small local group fighting the Marquette-McGregor Legacy Project.
The group has 27 active members and several dozen others who can be called on for support as needed, Mason said. They claim the development would pollute Sny Magill Creek, become the biggest water user in the county, spur sprawling growth in a rural area and attract monied urbanites whose interests would clash with locals’. They also point out that the development would be three miles from municipal infrastructure such as wastewater treatment, so bringing services to the new project would raise taxes for everyone.
Lifelong resident and farmer Harlan Dettman is active in the group, because he thinks the plan does not fit the land. “Tourists are already coming here to hunt and fish and camp. We have Pike’s Peak [State Park] and Paradise Valley. Why destroy the timber for this nonsense? I call it nonsense. They just want to get people here so they won’t spend as much money across the river in Prairie du Chien.”
The Concerned Citizens were only too happy to point out weak points in the Legacy plan. One of their primary concerns was a controversial developer, Conrad Seymour.
La Crosse, Wis., spent nearly $50,000 in legal fees in a seven-year battle to reclaim a landmark downtown building from Seymour’s MPC Development company (La Crosse Tribune 4-26-04). The city had sold the Doerflinger Building to Seymour for a bargain price with the agreement that he renovate it and bring its taxable value up to $2 million. His renovation ground to a halt long before it was completed, and La Crosse filed suit against Seymour.
Seymour had signed on as the developer for the River Bluff resort — the golf course, housing subdivision, hotel and waterpark of the Legacy Project. His reputation made a number of people uneasy, including the Vision Iowa board. In August 2002, while the Legacy Project application was still under review, the board hired an investigator to complete a due diligence report on Seymour.
As the investigation began, James Daughtry, a major investor in several of Seymour’s projects, took over Seymour’s company. In La Crosse, Daughtry’s company, La Quinta Mortgage, brought a foreclosure suit against the city in an effort to try to recoup some of its losses on the Doerflinger Building, complicating the legal wrangling.
Daughtry also bought a controlling interest in the hotel-waterpark project and formed a new company, Riverbluffs Resort, LLC.
“We were never partners with Seymour, although we hired him as consultant at that time,” Daughtry said.
According to Bob Walke, a Clayton County Board supervisor, Daughtry appeared before the Vision Iowa Board members to answer questions. But the Vision Iowa Board was not fully satisfied with the whole project. In April 2003, it removed the hotel and golf course from consideration and revoked the $5 million grant. It put the Trail of Two Cities and streetscape improvements in a separate funding category for further negotiations.
After losing the $5 million in Vision Iowa funding, Jim Daughtry and the Clayton County Board created a smaller version of the original plan. Using tax-increment financing to bolster Daughtry’s money, the county and the developer signed an agreement in June 2003 for an estimated $139 million project. The county wrote into the agreement that Daughtry will not receive any of the approved $20 million in tax-increment money unless he builds the golf course and commits to the hotel and waterpark within five years.
Neil Meyer, a Clayton County Supervisor from Monona, said he and the other two supervisors remain “one hundred percent in favor of the project.”
“It will increase the county tax base and increase employment. It will also be a future source of revenue,” he asserted.
The Trail of Two Cities also ran into difficulties. The trail’s purpose was partly to attract visitors with a scenic riverfront trail, but also to provide a way for pedestrian and bicycling residents of all ages to travel between the towns. A highway and a rail line already crowd the narrow corridor between the steep bluff and the riverbank. To get an extra 50 feet for a trail, the plan called for dumping fill along the riverbank. To do this, planners needed an easement from the railroad and a host of permits from state and federal agencies.
In October 2003, the cities did not yet have an easement agreement from the railroad to build the trail. After several time extensions and a resubmission of the application, Vision Iowa rejected the project in April 2004.
Meanwhile, the Concerned Citizens had their own problems with the trail. Mason calls it the “Sidewalk to the Plastic House of Greed,” claiming the trail would damage endangered mussel beds in the river and primarily benefit the Isle of Capri Casino boat, on the Marquette waterfront. Mason sees connections between the casino and the Legacy plan’s push for development. The Isle of Capri Casino contributed $10,000 to help pay consultant’s fees to develop the Legacy plan for Vision Iowa, but Mason believes the casino’s connections to the project run deeper. The casino has been seeking community and financial support for development since 1995, he said, and will be the primary beneficiary of a golf resort development.
Mason is a sixth generation Marquette-area resident whose father worked in the town’s railyards and ran a fishing guide service on the Mississippi River.
“We used to have a nice little town here,” he said. “Now, you cannot separate the two entities,” referring to city government and the casino. “Gambling is evil.”
The Concerned Citizens have pledged a 10-year battle against the development.
The group filed suit against the Clayton County Board of Supervisors in September 2003, claiming that the board’s actions to support the development contradicted the county’s comprehensive plan and did not conform to the state’s urban renewal planning rules, which must be followed for tax increment financing. They challenged the supervisors’ conclusions of the financial consequences for Clayton County.
The District Court dismissed the suit in September 2004, finding that the group had failed to establish that “the Board of Supervisors acted illegally, arbitrarily, capriciously, unreasonably or with an abuse of discretion,” as the group had claimed.
The Concerned Citizens of Clayton County say they plan to appeal the case to the Iowa Supreme Court, a process that could take from 12 to 18 months.
Supervisor Walke said that even if the group appeals the decision, Daughtry can legally build the golf course and at least one house.
“In Clayton County, golf courses are zoned agricultural, so he can go ahead with that,” Walke said. “He’s ready to move.”
Daughtry is scheduled to present a final plat for the development to the county planning and zoning board on October 12. If the board recommends approval, the Board of Supervisors would review the plan soon after that.
“If the final plat is approved, weather permitting, we will go ahead and do all the foundations and the framing for 10 to 12 condominiums, so we can work on them this winter,” Daughtry said.
It would not be financially feasible to go ahead with the resort hotel until TIFF money is available, he added.
Meanwhile, Norm Lincoln, McGregor’s city clerk, said the streetscape improvements were completed in time for the Grand Excursion last summer, although Vision Iowa backed out of that, too, leaving McGregor to borrow $125,000 for new streetlights, curbs and gutters, and restructuring of the town’s deteriorating raised sidewalks.
Marquette and McGregor may reapply to Vision Iowa for funds to build the trail along the riverfront, he said. About $800,000 in state and federal trail money is already in place, and the railroad granted an easement in exchange for two rail sidings in Marquette, one 6,000 feet and another 3,000 feet, which will cost about $1 million dollars.
The cities will also need permits to place fill to build the trail, which may be difficult, because endangered Higgins eye pearly mussels live along the river bank.
As for the hotel, the Isle of Capri Casino isn’t waiting for Daughtry to build one, with or without an indoor waterpark. It applied for a permit to fill a wetland adjacent to its parking lot to build a hotel.
The Iowa Department of Natural Resources put the wetland fill permit in abeyance, saying that the casino should consider other alternatives that don’t involve destroying a wetland.
The Concerned Citizens have been fighting that project, too
Copyright 2004 Big River Magazine
Trudy Balcom is a writer who lives in northeast Iowa. Pamela Eyden is news editor of Big River.