OTTUMWA — The Ottumwa City Council threw its support behind the city moving ahead with an application process that could bring apartments to the Capitol Theater.

During the first meeting of the year, the council was presented with a potential project to build four new loft apartments on the second floor of the theater, which is owned by the Ottumwa Regional Legacy Foundation.

To help pay for it, the city wanted to pursue a $300,000 Iowa Economic Development Agency Downtown Housing Grant toward the project, with Legacy funding $700,000 to match.

The project was originally budgeted at just over $1.3 million, but city director of community development Zach Simonson said that has been scaled down to about $1 million.

"There's no match from the city and there'd be no money spent by the city for this project," Simonson said. "We would just be sort of a pass-through administrator for the state program."

Council member Cara Galloway wondered, since Legacy owns the building, if there would be any contractual obligations if Legacy sold it for some reason.

"So if someone bought it, would those people be made aware?" she asked. "What would that look like, if the contract of the grant was faulted. Who would that fall back on?"

Simonson said Legacy is still "going to continue to try to sell the Ottumwa Theater (which it also owns)," but that it isn't going to try to sell the Capitol Theater "until this is completed."

"However, if the project were to sell for any other reason, if someone else took over Legacy, whatever it would be," he said, "there is a project assurance form that has to be submitted with the grant application, where the owner of the property commits to completing the project, providing the promised funds. So if they were to sell, the new owner would have to take over that responsibility."

The resolution approved unanimously.

In other business:

• In the consent agenda, the council approved Jan. 18 as the date for a public hearing regarding breed-specific legislation under "dangerous animals" in the city code. That hearing will be in council chambers at 5:30 p.m.

• Also in the consent agenda, the council approved the appointments of Kale Critchlow, Matthew Mahaffey and Yoshio Vo to the position of probationary officers effective no later than Jan. 30 as the city aims to increase its staff in the fire department.

• The city council will hold a special meeting Tuesday, with one of the items setting a public hearing for Jan. 18 regarding an application to the IEDA for a Community Development Block Grant from the COVID-19 program. There also will be a housing, development and code enforcement work session at the end of the meeting.

• In the minutes for the council meeting from Dec. 21, the council went into closed session for a performance review for city administrator Philip Rath. At the end, the council 4-1 to increase Rath's salary to $139,750, an increase of $10,250. Matt Dalbey was the lone dissenting vote.

— Chad Drury can be reached at cdrury@ottumwacourier.com, and on Twitter @ChadDrury

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