T-R PHOTO BY ROBERT MAHARRY — Pharmacist and Marshalltown native Doug Niedermann, pictured, presented plans for a new pharmacist at 211 W. Main St. during Monday night’s city council meeting and requested a $165,000 TIF agreement along with a $50,000 city grant to help make it happen. Niedermann currently owns and operates the Blairs Ferry Family Pharmacy in Hiawatha.

Doug Niedermann, a Marshalltown native who currently owns and operates Blairs Ferry Family Pharmacy in Hiawatha, presented plans for a downtown pharmacy at 211 W. Main St. to the city council during Monday night’s meeting and asked for a Tax Increment Financing (TIF) agreement valued at $165,000 over 10 years to help bridge the gap between the appraised value of the property and the expected construction costs.

As he took the podium, Niedermann highlighted his local roots and desire to give back to the Marshalltown community, so when he was approached by economic development officials about opening a pharmacy here, it seemed like “a perfect opportunity.” The appraisal of the currently empty lot next to Farmers Savings Bank, however, came in under the cost to build at the site.

“I wish we were bringing more jobs or a bigger building, but we are looking to fill a much needed gap here in town, especially on the north side of Marshalltown as most of the health care is moving to the south side,” he said.

Marshalltown Area Chamber of Commerce President/CEO John Hall also stepped forward to discuss the project and said his retail committee was happy with where it had gotten. The appraisal situation, he added, nearly derailed it.

“Really, what I want to talk about is the fact that we have a local entrepreneur who’s back (and) ready to invest in his hometown,” Hall said. “We know that there’s a major need for pharmacy services on the north side of town. It’s a need we continue to hear, pharmacy in general. We know that our pharmacy lines tend to be pretty stacked, pretty long. If you go to Hy-Vee any afternoon, it’s a long, long wait.”

Hall then explained the “but/for” analysis which is required for a project to qualify for TIF. Without the funding, he does not believe the project would be possible.

“I don’t know that I’ve ever seen, really, a more clear example of this, and this is built with a number of partners coming together,” Hall said. “Until we continue to see more investment in our downtown, this is going to be an issue that we run up against over and over. The hope is that as we continue to see investment in downtown that that force starts to right.”

Along with Niedermann’s personal investment and a traditional bank loan, the Chamber is providing a grant, and Consumers Energy is offering a low-interest loan. While Hall acknowledged that some people may desire a larger project, he believed the pharmacy would make great use of the currently unoccupied space.

“It really sends a message that Marshalltown is willing to come to the table when we’ve got entrepreneurs who are willing to pursue something. We’ve got a clear identifiable gap, and we want to help get them across that finish line,” he said. “And then we’re adaptive and flexible in trying to make that happen.”

The estimated cost of the project is slightly over $810,000, and along with the $165,000 TIF agreement, Niedermann is also seeking a $50,000 city grant. Sam Upah of United Bank and Trust in Marshalltown, which is financing the project, also spoke to the council and reiterated the reasons for the request, namely the $200,000 gap between the appraisal and construction costs. Legally, banks can only lend amounts up to the appraised value.

The floor was then opened to public comment, and Mark Eaton urged the board to vote against granting the request, arguing that his position had nothing to do with the Niedermanns but rather what he saw as the city’s past abuse of TIF.

“If you want to grow the town, make a 10-year commercial tax abatement. Stop giving away TIF money just to special individuals. We all have shortfalls in our projects. We all could use the money, but only four of you council members can give away certain money,” he said. “So I don’t think you should do this.”

City Administrator Jessica Kinser then provided a few more details on how the agreement would work and said there would be an employment certification requirement, which is currently set at 7.5 employees. She also recommended approving the pharmacy for the last of five $50,000 grants from the city using money allocated after the 2018 tornado for new construction projects. The previous recipients were Thompson True Value, Supermarket Villachuato, the Marshalltown Lofts and the Hopkins/Willard building elevator.

Councilor Gary Thompson asked Kinser about why the Urban Renewal Plan needed to be amended, if there were other options besides TIF that could be utilized, if reducing the size of the project could be beneficial and if a local contractor would be hired.

Niedermann said he is working with Garling Construction of Belle Plaine, which has completed projects for the city of Marshalltown in the past, but he has encouraged them to utilize local subcontractors. Upah also noted that the original plans were much larger and have already been downsized to address cost issues.

A motion from Councilor Jeff Schneider to direct staff to bring back an amendment to the Urban Renewal Plan at a future meeting carried by a 6-0 vote with Councilor Mike Ladehoff absent. Kinser said Niedermann has obtained a building permit and is ready to move forward once the financing gap is resolved.

During a subsequent interview, Hall described Niedermann as an ideal candidate for such a project because of his local roots and the fact that he is already successfully running a pharmacy in the Cedar Rapids area.

“It gives a certain level of confidence to us, to his lending partners and to others that he knows what he’s doing, and he knows how to do it,” Hall said.

He also provided a deeper explanation of why the gap between appraisal and construction costs exists, tying it to the depressed values of downtown properties since the tornado.

“If we want to see the development that I think everybody has on their radar for downtown, we’re going to have to help overcome this issue, and TIF is a great tool to be able to use for that with the intention that at some point, hopefully we start to shorten that gap between appraisal and cost to construct,” Hall said. “Obviously we want to see folks like him in our community — in his community, frankly, given his history here — so we’re proud of where he selected to build and the project that he’s bringing.”

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Contact Robert Maharry at (641) 753-6611 ext. 255 or rmaharry@timesrepublican.com.