History of the Clinton Engines Issue

8-23-01

The twelve acres that were owned by the Clinton Engines Company since about 1950 have been a source of friction between the Company and the City since the late 1970s. The grounds and facilities of this once-famous company would be described by most as a "Brownfield." The site would be described by many as a "dark brown Brownfield."

History of the Problem
The Company built the widely-known "Clinton Engine" which was a small engine used in generators, mowers, chainsaws, and a host of other products. The Company experienced its "hay day" in the 1950s through the mid-1960s and employed up to 2200 people. When the rights to the Clinton Engine were sold-off to an overseas interest, the Company went into a period of deterioration, in both its local financial impact on Maquoketa and physically in terms of its buildings, grounds, and machinery.

In the early months of 1999, the Company employed about 35 people. The activities there included making parts for customers such as Case/IH and producing replacement parts for previously manufactured Clinton Engines. By the Summer, lay-offs had occurred, and the business was near a state of closure.

Most of the buildings on-site had been in disrepair for years. Walls had been pushed in, windows broken, areas of roofing were missing, and most of the eastern side of the site had the appearance of rumble and overgrown vegetation.

At different times, past City governments in Maquoketa had discussed abating the site as an attractive nuisance and a safety hazard. However, for one reason or another, the past efforts to abate the hazardous structures were never taken to a conclusion.

"It's the type of situation that makes every other type of nuisance abatement nearly impossible," said City Manager Brian Wagner. "It was difficult to pursue other property owners for unsafe houses or outbuildings when we had Clinton Engines and had done nothing about those buildings."

A Different Approach to the Problem 
In early 1999, the City decided that abatement might not be the best course of action for the Clinton Engines site. Wagner's assessment of the City's options at that time went like this:  "Looking at this in a worst case scenario, we might guess that things might play out in this way: The City could treat Clinton Engines strictly as an abatement situation. If we sent an abatement notice, they could ignore it. If the Company did ignore it--which they already said they would and probably close-down the business--the City would have to abate the nuisance on its own and place the bill on the Company's taxes. If the company didn't pay its taxes, the City would have to choose between writing off the bill or pushing the company to place the property in a state of tax-forfeiture.  If latter occurred, the County would probably end up with a tax-forfeited property that no one else would be interested in any time soon."

Wagner added, "We then decided that this scenario might be a lot more preferable: Instead of seeing this as a pure abatement, we could choose to see it as an economic development/business retention project for the 35 jobs that were employed there. We could use the fact that Clinton Engines is in the industrial park Tax-Increment Financing or TIF district to use this as a tool to issue the Company either a grant or a forgivable loan to demolish the bad buildings. If we wanted, the City could claim the costs of demolition as expenses against the TIF district and get them reimbursed since one of the purposes of TIF is to remove slum, blight, and hazardous conditions."

A New Variable
 Upon making the suggestion about how to deal with the problems at the Clinton Engines site, the owner, Martin Hoffinger of W Palm Beach, FL, added a new wrinkle to the situation. Hoffinger offered to donate the entire site to the City to allow the City to demolish the structures and redevelop the site for future industrial use. For his part, Hoffinger would use his donation of the site as a tax write-off.

At this point, the question became one of whether or not the City Council wanted to take on the demolition of the entire site as a City project.

"The added problem to accepting the bad buildings was accepting whatever unknown contamination there might be in the soil after all of those years of factory and foundry production," Wagner stated. "Not knowing the costs of demolition and environmental remediation were major problems for us. The Council wanted to have an idea of how bad things were there and how much they might cost before the City accepted the donation of the site."

In June 1999, the City sent out Requests for Proposals to area engineering firms. The project for the prospective firms was to assess the environmental problems, assess the demolition problems, and provide the City with a detailed budgetary estimate of the total cost to deal with the Clinton Engines site.

After about 2 months of negotiations between the City and Hoffinger, it was agreed that the City would have until Dec 15, 1999 to assess the site and decide whether or not the City would accept the property as a donation. If accepted, the donation would be made in two stages. The unused eastern portion would be donated immediately and demolition could be pursued immediately. The western portion--including the still-used factory area and administration building--would be donated in no more than two years. During the two-year period, the business using the western portion of the site would be looking to relocate.

The Dec 1999 Bidding Results. In early December, the engineer's report was given to the City Council. The bids and associated cost estimates for total demolition and total environmental remediation was approximately $600,000. That total number was higher than expected and caused our negotiations to be stalled until the about the summer of 2000.

July-December 2000
 In August 2000, the Maquoketa City Council and Clinton Engines owner, Martin Hoffinger, reached a second agreement on a possible donation of the local Brownfield site to the City.  By this time, the number of employees at Clinton Engines has shrunk to about 15.

The new agreement gave the City until November 6, 2000 to re-bid the project to clean-up the site and decide whether or not the costs of remediation were affordable enough to accept Hoffinger's donation of the property.

At the City Council meeting on November 6, 2000, the City Council voted to accept a donation of the Clinton Engines buildings, equipment, and grounds from owner Martin Hoffinger of West Palm Beach, Florida.

The City then acquired ownership of the brownfield site on December 3 1, 2000 to clean-up then demolish the buildings on-site over a two-year period in order to redevelop it for future industrial use.

On November 6, the Council voted on three separate motions involving the project. The first motion was to accept the donation. The second motion was to sign a two-year lease agreement with the company, known as CEPCO, that currently occupies the Clinton Engines site and uses its equipment. The third motion was to accept the two low bids that would be involved with the clean-up of the site.

The Council's vote to pursue the project was not unanimous. Council member, Alvin Barten, questioned the estimated level of City expense in the project along with the risks associated with having the City being cast in the role of "landlord" to CEPCO for two-years in a setting where the dilapidated buildings and old machinery might pose liability and safety risks for the approximately 15 employees that will continue to work there.

For the latest on this project, please see the article, "City Accepts Donation of Clinton Engines Property."