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Finding a new purpose for the old power plant

Finding a new purpose for the old power plant

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An as yet unnamed party is interested in turning the old Denison Municipal Utilities (DMU) power plant building into an enterprise that will put the structure back on the property tax roll and become a utilities customer.

The old power plant is located at the corner of South 16th Street and 5th Avenue South.

DMU hasn’t been in the old building since 1993 when operations moved to the service center at West Broadway and 7th Street.

Selling the building to an interested party would keep the building in use. DMU had been looking into the costs of demolishing it.

But before DMU can continue its plans to work with the interested party, the building must first be deeded back to DMU.

At some time in the past, the old power plant building became the property of the City of Denison. This was discovered through discussion between the City of Denison and DMU.

The city plans to take steps to remedy that at this evening’s city council meeting when the council considers a resolution to transfer the property back to DMU. Then on October 5, the city council will conduct a public hearing on the disposal of public property.

City Manager/City Engineer Terry Crawford said deeding the property to DMU was the simplest way to handle the issue, according to City Attorney Matt Brick.

DMU General Manager Rory Weis brought up the subject of the old power plant as a discussion item at the DMU Board’s July meeting.

Then at the August meeting Weis informed his board that discussions with the party interested in the old power plant had continued.

“I met with the individual and also asked Evan Blakley (executive director of the Chamber & Development Council of Crawford County) to meet with us,” said Weis. “Evan’s help in the discussion and helping him (the interested party) secure additional funds beyond what we’re talking about would be very beneficial to the interested party.”

In order to provide assistance to the interest party, DMU first had to determine if it had surplus funds. Weis explained the Renee Vary, DMU’s finance manager, reached out to legal counsel for help with this. Weis said a calculation can be run to show if DMU has a surplus. Vary ran the calculation and found that a surplus does exist.

Weis continued that some of his board members questioned if using DMU’s economic development policy would be possible but he explained, “Our scope as a municipal electric utility is very narrow, and the policy does not allow us to use those funds. We could possibly look at that program and see if we can change any of it at all and still comply with Iowa law.”

At the DMU’s August meeting, the board gave its consensus to proceed with discussions with the interested party and to consider a sum of $200,000 from the surplus to assist with the project.

Weis pointed out that if formally approved, the $200,000 wouldn’t just be given up front but the agreement with the interested party would set steps or benchmarks that must be achieved.

The $200,000 amount, incidentally, is at the lower end of an estimate DMU had received to demolish the old power plant building. The actual range was $200,000-$300,000, although Weis added that a thought was some of the numbers may be a little bit inflated.

“We’re comfortable with the $200,000 amount we talked about,” said Weis.

“To me it appears like an opportunity,” he added. “This interested party has a lot of plans. If all the stars line up and everything works, it would be a great opportunity for us, instead of tearing the building down, we gain a customer and the city has it back on the tax base.”

He added the financial incentive would be a cost savings to DMU compared to the demolition cost.

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