TIMES-REPUBLICAN

The Marshalltown city council took a key step toward acquiring the former downtown hospital property during Monday night’s meeting, unanimously approving a settlement agreement that will clear the path for the city to take the title in a 657A action against the current owner, CD Marshalltown.

As City Administrator Carol Webb explained, the agreement will require the city to pay $75,000 to ServiceMaster of Des Moines, which has a lien against the property for work the company did without being compensated.

“The settlement agreement would resolve claims involving a lienholder — ServiceMaster — and helps advance the city’s efforts to obtain control of the property, reduce further litigation and delay and move us closer to addressing the health, safety and redevelopment issues associated with the property,” she said.

The payment to ServiceMaster, she added, is contingent on the city obtaining the title through its 657A action, the section of the Iowa Code allowing cities to abate abandoned or unsafe buildings through rehabilitation or demolition.

During the public comment period, Leigh Bauder called the hospital an eyesore that is decaying and has become a nuisance, with numerous broken windows, damages and police and fire calls for service since Covalt took ownership from UnityPoint Health in 2022. She offered her support for the settlement agreement and taking the title, but she also wondered what the cost of demolition would be, citing a recent interview with Mayor Mike Ladehoff on KFJB during which he shared his preference for that option, and where the funding would be obtained to make it happen.

She also cited the incident on Sunday evening when two unconscious individuals were rescued from inside the building by members of the Marshalltown Fire Department (MFD) and asked if the city would be responsible for medical expenses and/or lawsuits. Bauder noted that Covalt also owns the Fox Ridge Golf Course in Dike, which is currently closed and up for sale, and urged the council to pursue a lien against him for costs the city has and will continue to absorb.

“Even if we could only get a little bit of recovery, it would send a very good message and it would be beneficial for our community,” Bauder said.

After Councilor Jeff Schneider clarified that the ServiceMaster in question was not the local Marshalltown-based operation, the council voted unanimously to approve the agreement. As part of the deal, ServiceMaster will put one parcel not included in the city’s 657A petition up for sheriff’s sale and transfer it to the city.

“The settlement is intended to assist the City in acquiring and controlling the full site, including

the northeast corner parcel not already included in the City’s petition, while avoiding further

litigation costs and delay,” a portion of the memo included in the council packet reads. “The correspondence also reflects the City’s assessment that obtaining control of the remaining parcel has practical value as part of a comprehensive redevelopment or remediation strategy for the property.”

The non-jury trial between the city and CD Marshalltown is currently scheduled for June 9 in Marshall County District Court. After purchasing the property from UnityPoint for $250,000 in January of 2022, Cobalt told the T-R at the time that he planned to convert the large campus into office, retail, residential and live/work space use.

However, the work never materialized, and the Marshalltown Police Department (MPD) began taking a litany of calls for service as extensive damages to both the exterior and interior of the building were reported by the T-R last year. A judge ruled that the property be placed in foreclosure in July of 2025 to pay the $1.7 million ServiceMaster bill, and the judgment amount on the property was $1.392 million.

Recently, the doors to the building have been boarded up with signs warning the public that it is unsafe for any human to occupy or reside inside of it.

In other business, the council:

• Heard a proclamation for Fair Housing Month.

• Approved the consent agenda as listed.

• Approved alcohol licenses for the Marshalltown Central Business District’s Live After Five, Har Shiva Inc. and Brewsters Inc. for the operation of the Softball Complex concession stand.

• Approved a resolution for an agreement for the RAGBRAI 2026 Overnight Town Event.

• Approved the Fiscal Year 2027 Consolidated Transit Funding Application for the Marshalltown Municipal Transit Program, with MMT Administrator Kevin Pigors noting that it will include $182,000 in state funding and $397,000 from the federal government.

• Approved a resolution providing for the vacation of West Linn Street between 12th Street and 11th Street and gifting it to the Marshalltown Community School District in conjunction with the Reimagine Miller project.

• Approved the third and final reading of an ordinance amendment regarding animals (Chapter 90) by a 6-1 vote with Mark Mitchell opposed.

• Approved the second reading of an amendment to Chapter 76 of the city code related to stop sign and yield intersections.

• Approved the second reading of an ordinance amendment to Chapter 93 of city code related to parks and recreation, leisure, camping, permits and fees.

• Approved the first reading of an ordinance to raise the stormwater rate from $4.20 to $4.60 per Equivalent Residential Unit (ERU).

• Passed the second reading of an ordinance amendment to Chapter 156 regarding accessory structure locations and zoning definitions by a 5-2 vote with Councilors Schneider and Marco Yepez-Gomez opposed.

• Approved the second reading of an ordinance amendment adding a requirement for passive radon mitigation systems in new homes.

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Contact Robert Maharry

at 641-753-6611 ext. 255 or

rmaharry@timesrepublican.com.