Rehab starting soon on troubled southeast Iowa City property

As the trial starts for a man accused of shooting a landlord at a southeast Iowa City condominium complex, a major rehabilitation of the property is about to begin.

City and neighborhood representatives said they believe the $5.75 million project could help not only Broadway Condominiums, 1956-60 Broadway St., but also the surrounding neighborhood.

“I think that just creates an overall positive impression that people care about the southeast side of the community,” said council member Ross Wilburn, who lives in the neighborhood.

Work could start in mid-October and be finished in a year on the three-building, 108-unit Broadway Condominiums, said Glenn Siders, vice president of property development at Southgate Development, which owns most of the units.

On the exterior, work will include new roofs, windows, patio doors, decks and landscaping, a new decorative fence around the perimeter and an upgraded security camera system, he said. On the inside, the units will get new floors and cabinets; most will get washers and dryers; and there will be some drywall and heating, ventilation and air conditioning work, he said.

Broadway Condominiums, which is essentially an apartment complex, has a history of being the scene of criminal activity, which also contributes to the negative image some have of southeast Iowa City.

Most notably, landlord John Versypt was shot and killed in the hallway of one of the condo buildings in October 2009 during what investigators believe was an attempted robbery. The first-degree murder trial of Charles W. Thompson started this week, and another man, Justin A. Marshall, is awaiting trial on the same charge.

A year ago, Southgate owned about 60 of the condominiums. It began buying more in order to take control of the homeowners association that governs the complex so that it could make the changes it wanted, and it now owns 94 of the 108 units, Siders said.

In addition to the rehabilitation work, Southgate is requiring tenants to pass background checks and sign crime-free leases.

Iowa City is giving Southgate $900,000 in federal Community Development Block Grants, or CDBG, for the project. The money comes in the form a $300,000 grant and a $600,000 loan.

The agreement, signed last Thursday, also requires Southgate to rent at least 56 of the units to people making less than 80 percent of the area's median income, which is $57,050 annually for a household of three, said Tracy Hightshoe, Iowa City's community development planner.

Fifty-six units also have their rents capped at $746 a month, which is the fair-market value for a two-bedroom apartment in the area, although a majority of Broadway Condominiums' rents already are below that standard, Hightshoe said.

Siders said rents likely will go up from where they are now, but by how much won't be clear until Southgate sees how much the renovation work costs.

The City Council decided earlier this year to stop allowing CDBG funds to go to new affordable rental housing projects in most of southeast Iowa City because of concerns about the amount of low-income housing in the neighborhood. But those rules don't apply to the rehabilitation of existing rental housing like Broadway Condominiums.

Hightshoe said having good property management makes a big difference for troubled properties, and city officials see the Broadway Condominiums work as a win-win situation for the city and Southgate.

“We hope this will improve the area quite a bit,” she said.

Siders said Southgate's motivation is to help protect its investments in southeast Iowa City, which includes the Pepperwood Plaza commercial area, and changing the image of the neighborhood for the better.

“That certainly is the driving force for this whole thing,” he said, “and we thought the only way we could do that is step up and take charge.”

Doug Fern, a local pastor and director of the Spot, a youth outreach center near Broadway Condominiums, believes the project will give the area a boost.

“It's nice to see businesses that are in the area step up rather than what may be the natural response, which is to bail,” he said.