WATERLOO -- An active grade school can be a magnet for neighborhood development and a boon for surrounding home values.

Then there's places like Van Eaton Elementary.

The former Waterloo school at 2170 Burton Ave., adjacent to Ray Tiller Park on the city's northwest side, has become a drag on surrounding properties since being abandoned nearly 30 years ago. Its white cinderblock walls are a popular target for graffiti vandals. Two men were arrested in November for allegedly stealing scrap metal from the building.

"I get complaints about it … it's an eyesore," said Ward 3 City Councilman Harold Getty. "I'm very happy to see that it's going to be torn down."

The Van Eaton demolition isn't a sure thing.

Waterloo City Council members voted Dec. 17 to seek $80,000 in gambling profits from the Black Hawk County Gaming Association to help cover the estimated $100,000 cost of asbestos removal and demolition from the city-owned building. City Council members pledged $20,000 in general obligation bonds to match prospective grant, which will compete with other projects throughout the area for a slice of the casino pie.

"Since its closure in 1978, the former Van Eaton Elementary school … has sat vacant, and without having services such as heating and cooling, the deterioration of the building has accelerated in recent years," city planners stated in the BHCGA grant application.

Van Eaton, once known as Cushman Heights, shut down in 1978. The city took ownership from the school district in 1995 and used the building for storage.

A group of Masons sought to buy the building in 2002 but were turned down when they failed to provide proof of financial ability to bring it up to code. Another offer from a man wanting to make it a single-family home was rejected in 2003. City officials have steadfastly supported tearing down the building and seeking a housing developer to construct eight new houses on the 2.2-acre lot.

Community Planning and Development Director Don Temeyer said there has been interest from homebuilders in such a plan, but the cost of tearing down Van Eaton has been a deal breaker. The land is in the city's Consolidated Urban Revitalization Area, which means a builder could receive property tax breaks for the development.

"With the development of eight new residential units, the city will be adding additional revenue to its tax rolls, resulting in lower property taxes for Waterloo taxpayers," the city's grant application states. "The removal of this building will also institute a new sense of neighborhood by removing the negative eyesore.

"The current state of this building is having a negative influence on the surrounding area as well as posing a threat to the safety and welfare of the citizens of Waterloo," the application continued. "(It) is a detraction to surrounding neighborhood character, and allow this building to stand will only impede further development from occurring in this neighborhood."

The city's grant application is one of several submitted by council members for the second round of grants to be awarded by the gaming association. The BHCGA awarded 19 grants totaling $720,000 in the first application cycle in the fall.

Contact Tim Jamison at (319) 291-1577 or tim.jamison@wcfcourier.com.