Judge declines to stop Coralville Von Maur store

A judge on Monday denied a request by a group of Coralville business owners to halt work on a Von Maur department store project at the Iowa River Landing development.

A lawsuit filed by the business owners on March 1 claims the city?s proposal to provide the Davenport-based department store chain with free land, a free building and other amenities in a commercial developmental area violates a state economic development grant law that bars governmental units from using public money to persuade businesses to relocate from elsewhere in Iowa.

Von Maur intends to close its store in Sycamore Mall in nearby Iowa City.

The business owners asked the court to impose a temporary injunction to halt the project until the case could be heard in court.

The lawsuit lists eight individuals and 18 businesses as plaintiffs. It seeks an injunction preventing Coralville from selling land in the Iowa River Landing to a developer that would sell it to Von Maur for $10. Among other things, the group claims the deal constitutes an unlawful gift from the city to a non-governmental entity.

District Court Judge Marsha Bergan ruled that the business owners failed to show that the city had broken any laws, the Press-Citizen newspaper in Iowa City reported.

Bergan wrote in her ruling that the plaintiffs also had not shown that allowing work to go forward would cause them great irreparable harm.

The plaintiffs argued that Von Maur?s decision to leave Sycamore Mall in Iowa City would negatively impact them. The lawsuit notes that the cities are only 5 miles apart, meaning the store would likely keep its current employees after it moves and wouldn?t bring much more tourism to the area.

However, the judge determined that there was no evidence that showed granting an injunction would result in the store staying at Sycamore Mall.

The city wants the lawsuit dismissed. Bergan said she would consider that request later, along with a second motion by the plaintiffs for a permanent injunction that would prohibit the city from moving forward with the land sale.

Kevin O?Brien, who owns a local McDonald?s franchise and is spokesman for the plaintiffs group, said they are weighing options.

?Obviously we?re disappointed,? O?Brien said. ?We think we have some other options and alternatives to take a look at and see where we go from here.?

City officials also argue that land-use restrictions have lowered the overall property value.

Bergan wrote that Iowa law appears to show that monetary payments alone are not a measure of fair value of land. She said she was not convinced that the business owners showed a likelihood of success on the merits of their claim that the city violated state law.

Coralville Mayor Jim Fausett said the ruling confirms that everything the city has done so far has been legal.

?We absolutely feel we have done nothing wrong. We?re always glad to get that confirmed,? he said.

Contracts between Coralville, San Diego-based developer OliverMcMillan LLC and Von Maur indicate that Coralville would provide OliverMcMillan with a grant for $1.5 million that the developer would use to buy the 7.46-acre tract of land from the city. OliverMcMillan would then sell the land to Von Maur for $10.

The city also is offering Von Maur a $9.47 million economic development grant on the condition OliverMcMillan uses the money to offset the costs of building the Von Maur store.