WATERLOO — The Sunnyside South Addition housing project has come full circle.
Waterloo City Council members voted 6-0 Monday to approve a development agreement with a group of investors to develop 24 upscale homes along San Marnan Drive adjacent to Sunnyside Country Club.
It’s the same deal struck nearly five years ago, when council members voted to sell the roadside right-of-way for $1 in return for Sunnyside South Addition LLC’s promise to move San Marnan Drive at its own expense and create the housing lots.
But that original sale was nullified by the Iowa Supreme Court, which ruled the city failed to follow state law requiring unused right-of-way to first be appraised and offered for sale back to the owners of land from which the property was taken in 1959.
WATERLOO | The Iowa Supreme Court said the city failed to follow state law when donating lan…
The issue was debated in court and the council chambers in the years that followed as the city spent more than $100,000 in legal fees battling a group of property owners who filed the original suit over the land transaction.
After conducting an appraisal, which valued the land at $1.825 million, and getting no bids from the adjacent landowners in July, city officials believe they were free to honor the original development agreement.
Community Planning and Development Director Noel Anderson said this week’s vote clears the way to “get that land developed, to create tax base and new houses in the city of Waterloo.”
Council members did not speak at the meeting before the vote. Councilman Bruce Jacobs was absent.
Attorney Dave Nagle, who represented the taxpayers who sued over the original transaction, did not attend the meeting but had previously indicated his intent to continue litigating the issue, citing what he believed to be a faulty appraisal.
Resident Todd Obadal voiced objection to the sale and said the council was not looking out for the taxpayers when it gives away a nearly $2 million asset for $1.
“The underlying aspect of this whole case is getting fair market value for the citizens,” Obadal said. “I believe that property is worth more than $1.”
But David Riley, attorney for Sunnyside South Addition LLC, said his clients had met the original terms of the development agreement by moving the road.
“Sunnyside South acted in good faith and moved the road to the tune of $1.8 million,” Riley said. “So the suggestion that all the city ever got out of this was a dollar is fundamentally incorrect.
“It was a good project when it was approved the first time; it’s a good project this time,” Riley said. “The sooner we can get those houses built, the sooner we’re going to get the property on the tax roles. It’s a great thing for the city.”
Sunnyside South Addition LLC is a partnership formed to pursue the housing project in 2011. Original partners were Jeff Stickfort, Van Miller, John Deery and Jim Walsh.