Iowa Farmer Today
03-31-07
Development embraced by some
By Hannah Fletcher, Iowa Farmer Today
NORTH LIBERTY -- Clair Mekota has farmed on the fringes of North Liberty his
whole life.
Portions of his farm are in prime territory for expanded development in a city
located between Cedar Rapids and Iowa City.
Mekota took note as the city took an increasing interest in growth and more
urbanites started living outside of metropolitan areas.
“I served on the (City) Council in the late ’80s, early ’90s, so I kind of knew what
was going on,” he says.
Working for the city council, Mekota realized it would be a matter of time before
some of his farmland would be eyed by developers.
Mekota and his son, Jeff, decided to work with the city to develop 110 acres of
their farm into a single-family housing project. The Mekotas worked with partners
to help with initial costs and planning.
“It wasn’t a hard decision,” he says. “The thing is you know it won’t be long
because you’re attached to town and soon or later someone is going to take
interest in that.
“Either you do it or someone else down the road will reap the benefits.”
This was not a get-rich design for Mekota, who later became mayor for 11⁄2
terms.
He wanted a respectable development project, complete with larger lots, brickfront homes, high-pitched roofs and two trees in every yard. The results
exceeded Mekota’s expectations.
“I was really impressed with how it turned out. They really did a good job. I just
provided the land,” he says.
Mekota gained knowledge from the experience.
“I taught myself as I went along,” he says.
While continuing to farm a 1,100-acre corn and soybean operation and maintain
a 70-head cow-calf herd, Mekota has more development plans.
He hopes to develop farmland adjacent to the first project.
In 2000, Mekota bought 115 acres near a neighboring city experiencing the
similar development trends — Solon. That area will be used for commercial lots
and single-family and multi-family housing.
Lately, it is not uncommon for farmers to take advantage of development
opportunities in their area, says Mark Edelman, director of the Community
Vitality Center at Iowa State University
“Not everybody would use the term encroaching development because a lot of
people would love to see some economic development,” he says.
Traveling through town, Mekota can point out projects he oversaw as mayor.
Projects, such as a new day care center and medical center, add to the appeal of
the community and provide tax money to city.
While these new centers, housing developments and similar projects are on
ground that was once farmland, he says the city should not discourage such
progress.
Not all farmers have to be intertwined with city government to recognize the need
for land to be used for development near metropolitan areas.
Similar to Mekota, many farmers see opportunity in developing their land or
selling to developers.
As mayor, Mekota says he witnessed little opposition from farmers neighboring
city limits when new projects were purposed.
Edelman says some farmers recognized the benefits of selling land at premium
prices and jump at the opportunities.
“Not all farmers are against development,” Edelman says. “Some farmers in the
path of development will sell their land to be used as retirement at some point.”
Older landowners may be particularly interested in selling land to developers, he
says.
The average age of landowners in Iowa is increasing.
According to “Farmland Ownership and Tenure in Iowa 1982-2002: A TwentyYear Perspective,’’ an ISU study, 24 percent of farmland was owned by people
over age 74 in 2002, which is double the amount reported in 1982. Nearly half of
Iowa’s farmland is owned by people over the age of 65.
But, others wishing to reap the benefits of development opportunities and
continue farming comparable acres may want to consider a 1031 exchange,
Edelman says.
The 1031 exchanges allow
landowners to exchange their farm for one of equivalent worth. In this case,
farmers might be able to find land that is well outside the course of development
but is worth less per acre.
“You’ll find sharp business people who take a 1031 exchange and move outside
the path of development and increase the size of their farm significantly,”
Edelman says.
“It is my understanding that a number of people have and continue to take
advantage of 1031 exchanges,” he says.
Some housing projects are stretching beyond city limits because of increasing
interest in “living in the country,” Edelman says.
In rural areas surrounding larger metropolitan areas, more people are interested
living in the country because they are still able to commute to the city for work.
“Our constitution guarantees us the right to the pursuit of happiness and people
want to live in the country,” he says.
“You’ll find housing developments that pop up in the countryside. In fact, you’ll
find quite a few of them.”
Edelman says farmers outside the fringes of city limits may also see interest from
developers.
Mekota has contributed only his land near the city for development. The rest of
his farm, though still close to the city, remains designated for farming — his
priority.
Some of the profits from Mekota’s development projects have been used to add
to his farming operation.
He added a 160-acre farm his operation, which made up for the 110 acres sold
for the project.
“There has never been any interest in quitting farming. That is our No. 1 thing,
and development always comes second,” he says.