Money troubles for a popular commercial property in downtown Sioux City; now those troubles will become the city's responsibility.
Civic Partners, a California-based real estate company who partnered with Sioux City to build the property at 4th and Virginia, first defaulted on their loan in 2009.They've since filed bankruptcy, leaving the city to pick up their loan payments. "They've indicated that the city needs to pay payments going back from the installment due January 2010 going forward. We haven't made a decision yet, obviously the council has just gotten the slate yesterday afternoon. We haven't had an opportunity to speak," Nicole Jensen, City Attorney said.
District Court Judge John Ackerman officially ruled the city of Sioux City is responsible for paying back the rest of Civic Partners' debt, meaning the city owes First National Bank 1.2 million dollars to be paid in 300 thousand dollar installments from 2014 to 2018. City leaders signed off on the agreement in 2001. "We can't speak for the council, but staff will not recommend never entering into a guarantee agreement again. It puts too much at risk," Bob Padmore, Interim City Manager said.
The city has 30 days to appeal the ruling. If the city decides to accept the ruling, they will use the $377,000 they receive from the property in taxes each year, meaning a remaining $77,000 in tax revenue and no foreseeable debt issues. "In the long term, the 300 thousand helps the community if we don't need to use it, but in this case, by collecting enough to pay back the guarantee that we have, we're not adversely affecting the community as a whole," Padmore said.
The city council will meet in closed session Monday to talk about the next move.
The Promenade Theatre, and the other businesses in the complex, aren't related to or affected by the decision.
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