Why mixed-use buildings are becoming popular in Cedar Rapids, Iowa City

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It’s changed the face of central Cedar Rapids, driving post-flood development in the New Bohemia and Kingston neighborhoods with new and reclaimed properties. In Iowa City, its backers see it as a way to downtown vitality.

“From a community’s point of view, you get a more broad-based neighborhood,” said B.J. Hobart, managing member and co-owner of Hobart Historic Restoration of Cedar Rapids.

The suburban single-family home isn’t going away, but so-called mixed-use projects incorporating residential and retail, commercial and sometimes even light-industrial spaces in the same or adjoining buildings offer different options to residential and business tenants. In some places — think dense urban neighborhoods and small-town main streets with apartments above ground-floor retail shops — mixed-use patterns never went away.

Mixed-use is especially appropriate in Iowa City’s central neighborhoods, said Marc Moen, whose Moen Group is developing the Chauncey, a 15-story building at College and Gilbert streets. Set to open in 2019, the building will include 50 condominiums, two movie theaters, a hotel, a 12-lane bowling alley and office space.

“It is about providing the services and entertainment that will attract permanent residents downtown,” Moen wrote in an email. “The residential units actually go a long way to allow us to develop uses that are not able to pay high rents.”

Iowa City’s new Eastside Mixed-Use District was designed to provide a buffer between the high-density downtown area and residential neighborhoods to the east. Associate city planner Karen Howard said most of Iowa City’s commercial districts allow mixed uses.

“We’ve had a lot of demand for living in the area,” she said. “We have the Big Ten university right next to the main downtown, so that lends itself to that type of development. People want to live next to that.”

Howard said area banks seem to have overcome some skepticism toward mixed-use developments.

“The lenders are much more comfortable with the viability and the risk with those types of buildings,” she said.

“The last three to four years lenders have been lending on the mixed-use real estate,” said Scott Wilson, University of Iowa Community Credit Union’s senior vice president for commercial services. “There has been a demand for it that’s been going well.”

Desirable neighborhoods and willing lenders drive development in Eastern Iowa, Wilson said.

“No. 1, they’re near amenities,” Wilson said. “The second thing that’s happened over the past three or four years is that financing has been available for those condos.

“At the same time we have to be cognizant that you can’t build too much of it. Everyone is watching closely to make sure it’s done well and it’s done smart.”

In southwest Cedar Rapids’s Kingston neighborhood, a boom in residential development is driving demand for restaurants and retail, Hobart said.

“There’s a lot of roofs going up over here, which is a great thing,” Hobart said. “It can get population-dense, so from a community point of view it’s nice to have that diversity (of uses).”

‘Re-tenanting’

Much development in Kingston and New Bo have been new construction, but downtown Cedar Rapids favors new uses for old buildings, said Darryl High, founder of High Properties.

“It’s always easier to build from scratch, but lots of the ones in our town and across the country are going to remodel,” High said. “A lot of those properties have outlived their original purposes and people are lifestyle-driven — they want to be downtown.”

High Properties’s Coventry Lofts at 211 First Ave. SE combines residential, retail and office space — including High’s.

“It’s been a nice change to move downtown” from northeast Cedar Rapids, High said. “We changed our profile a little bit.”

Developers and planners must consider the effect of a contemplated project on the surrounding neighborhood, he said.

“The re-tenanting is going to be tricky in our market,” he said. “If a building has been there for 20 years and they’ve got three tenants and somebody comes along and builds a nicer building and the guy in (the first building) loses a tenant and can’t re-lease the space, then you’ve got a problem. We’ve got to make sure we’re growing and bringing new things to town and not just poach existing buildings.”

The move to mixed-use reverses decades of urban planning policies favoring separation of residential and commercial properties.

“Even when zoning started back in the ’30s, the idea was you had very strict separation of uses,” said Jeff Schott, director of the University of Iowa’s Institute of Public Affairs, which helps city and county governments in Iowa to develop strategic plans, among other civic functions.

That strictly defined segregation of uses began to ease in the late 1970s.

“There was a big push in urban planning schools for new urbanism, walkable neighborhoods,” said Schott. “Many zoning ordinances were rewritten over about the past 20 years to allow for those uses. The idea is to have more sustainable development.”

Peaceful coexistence

Mixed-use development has found uses outside dense urban neighborhoods. Cedar Rapids Zoning Administrator Vern Zakostelecky noted a commercial district at C Avenue and Boyson Road NE is closely surrounded by residential neighborhoods.

“Back in the day when they started to develop that, the residential neighborhood was really opposed,” he said.

But the city ensured the ensuing development included sidewalks and other pedestrian-friendly features.

“I think a majority of the residents really appreciated that, not having to get in their cars and drive there,” Zakostelecky said. “If it’s done right, mixes of uses can coexist.”

“If they fit together it would make sense, as long as it’s planned out to avoid clashes between the two types of uses,” said Schott.

He added that communication with nearby residents is key to such the success of such developments.

“You start with residential,” he said. When they move into a new home, “those people need to know that across the street there’s going to be some kind of retail.”

Ground floor

Finding tenants for ground-floor retail is key in Cedar Rapids, Hobart has found.

“Every area has its challenges in different ways, but when we’re talking about Cedar Rapids it’s more difficult to fill commercial space,” she said. “It’s not difficult to fill market-rate residential space.”

Just two of 13 condo units in Hobart’s new Metropolitan building at 450 First St. SW are unsold since it opened in March, and about half the commercial space is occupied, according to Hobart.

The Iowa Economic Development Authority has supported “upper-story housing” mixed-use developments in smaller cities, spokeswoman Tina Hoffman wrote in an email.

These projects improved “existing second- and third-story spaces by taking vacant and underutilized space and converting them to new residential rental units,” Hoffman wrote, citing projects in Bloomfield, Chariton, Colfax, Fort Madison, Grinnell, Iowa Falls, Marshalltown, Mount Pleasant, Ottumwa, Waverly, West Union and Woodbine.

“In a lot of smaller Iowa communities, there’s been a lot of attention to trying to bring back residential to the downtown community,” Schott said. “You had retail in the ground floors and the upper floors had been built for residential and that’s becoming more attractive.”

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