Last call: Cedar Rapids gives developers one more chance at commercial properties

CEDAR RAPIDS - City officials made a last-ditch effort to save the best of flood-damaged homes in the buyout program, and now they're doing the same for flood-damaged commercial properties.

The city is beginning, four years after the flood, to demolish the first group of about 50 commercial properties. Those approved by the City Council for demolition include small neighborhood businesses, three former churches and some well-known buildings - the Boys & Girls Club in Time Check, Brosh Chapel in New Bohemia and the Saddle & Leather Shop in Czech Village. The Swiss Valley Farms plant was added to the list just Friday.

To see which properties might yet avoid demolition, city officials are asking qualified developers, builders and business owners if they have an interest in another 50 or so commercial properties - some are just lots - before the city moves those with structures to the demolition list.

Yet another 30 to 50 commercial properties continue to make their way through the buyout program.

Of the properties now available for purchase, all are outside the 100-year flood plain and outside the construction area set aside for the proposed flood-protection system.

If any property attracts interest, the city will move to sell it. In most instances, the sale will come via a sealed-bid competition, though the city may seek requests for proposals in certain instances.

In March, officials will ask the City Council to approve the first sealed-bid competitions: one for the former Ginsberg Jewelers storefront at 219 Second Ave. SE, one for the former Nordstrom Oil building, 1400 and 1412 Sixth St. SW.

Rita Rasmussen, the city's senior real estate officer, said the city will use each property's current assessed value as a benchmark for offers.

The highest bid in the sealed-bid process establishes fair-market value, but the city can reject it if officials believe it is too low, said Joe O'Hern, the city's flood recovery and reinvestment director.

Thirty-seven of the 50 commercial properties on the for-sale list are in southwest Cedar Rapids, 13 in northwest Cedar Rapids.

O'Hern estimates only a limited number of properties in the buyout program will attract interest. Interest will grow, he said, once structures are demolished.

“But as we've seen, we will have people interested in existing structures, and we're happy to work through that with them,” he said.

The city is not a developer, said Jennifer Pratt, a city planner, so it needs the private sector to identify what can and can't be saved.

The City Council and city officials made a similar effort with about 1,100 residential properties acquired in buyouts. At one point in 2011, about 20 developers and builders were interested in some 100 houses. The city agreed to provide the property to the developer or builder in exchange for renovation and sale. In the end, only about 40 homes ended up in the program, Pratt said.

With the sale and demolition of commercial property, O'Hern said the city can see the end of the acquisition piece of the buyout program - intended to help those hurt by the flood move on in their life, he said.

Now, he said, the driving force is to get the neighborhoods cleaned up and poised for rebuilding.

“I don't think anybody wants dilapidated structures that are really impeding the development and attractiveness of our neighborhoods just sitting on street corners across the city,” O'Hern said.

The city slowed down the push for demolition of certain commercial properties at the request of the Historic Preservation Commission, which has identified some it believes should be renovated, not demolished.

As a result, the city pulled two properties off its commercial demolition list, sought requests for proposals and then entered into development agreements with the developer submitting the winning proposal. In each instance - at 1501/1507 C St. SW in Czech Village and at the former A&W Family Restaurant site, 1132 Ellis Blvd. NW - the developer is Baron Stark.

The city also will seek requests for proposals on a handful of other properties identified by the Historic Preservation Commission. Three developers have expressed early interest: Stark, the Kingston Historic Building Redevelopment Group and the New Bohemia Group Inc.

According to the city's Rasmussen, the flood-damaged commercial properties that will cost the most to purchase include the vacant former Swiss Valley Farms plant, 133 F Ave. NW, and two properties next to the river on First Street NW that have been reoccupied after the flood: the Diamond V Mills' office building and the former Sign Productions Co. building, which has been temporary home to the Central Fire Station and the city's fleet maintenance operation.

All three are in the 100-year flood plain and construction area of a flood-protection system.

To date, the city has spent some $77 million in federal and state disaster funds to purchase property in the buyout program. It has access to additional federal and state money to cover the buyout and demolition costs of the remaining properties still going through the program.

Related articles

Will flooded areas of Cedar Rapids be redeveloped? (thegazette.com)

Cedar Rapids moves to keep several 'historic,' flood-damaged buildings off demolition list (thegazette.com)