‘Very qualified, interested people’ in the University of Iowa’s Mayflower sale

IOWA CITY — A realtor selling the University of Iowa’s 326,000-square-foot Mayflower Residence Hall for $45 million said four “very qualified, interested people are actively pursuing it.”

“It’s early days,” realtor Jeff Edberg, with Lepic-Kroeger Realtors, told The Gazette. “It feels like we’re getting there. But, in real estate, you don’t have a deal until you have a deal.”

Before Edberg listed the 523-room, 55-year-old property publicly in June, he worked with the university to reach out to 12 “qualified, interested people” first.

“They wanted to hold off on any public announcement or advertising and contact these 12 people first,” Edberg said, “which we did, by phone call and by package, so they had all of the in-depth information anybody would need to take it to the next step.”

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None of those dozen, however, are among the four now considered most interested in the four-acre property, Edberg said.

“Three local, one not, but they're all new people that have come to the property through our advertising and promotions,” he said. “And it's possible, especially with some of the local people, that they join forces. It's a significant project, and if they have the same vision (they can) do it together.”

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Only one interested person early on raised the idea of tearing down the eight-story dorm capable of housing 1,015 residents to build something new in its place. But, given zoning constraints, Edberg said that’s “not feasible.”

“This looks like a glitzy downtown building, but this is not downtown Iowa City,” he said, referencing the new Hotel Chauncey, paired with the Tapestry Collection by Hilton, just south of downtown. “The party that wanted to do that wanted to raze it and just go brand new with a Chauncey-type building.

“But that's a CB-10 zone,” he said. "This is a residential core and a residential neighborhood.”

And razing Mayflower to replace it with homes, Edberg said, doesn’t make financial sense.

“You could,” he said. “However, $45 million is too much to pay for the land.”

‘Bargain sale price’

The plot of land overlooking the Iowa River and Iowa City’s largest public park and skate park originally housed the entrepreneur who built a dam and grain mill along the river. His mansion in the 1930s or 1940s became the Mayflower Inn, featuring the Mayflower nightclub, before eventually being demolished and replaced by apartments.

The university in 1979 began leasing portions of the apartment building to help manage student-housing overcrowding, and it bought it outright in 1983 — later renovating the hall in 1999 and a decade later in 2009.

When the State of Iowa — “for the use and benefit of the State University of Iowa” — took ownership of Mayflower 40 years ago, it received a “bargain sale price of $6.5 million,” according to the deed, provided to The Gazette through an open records request.

The site should have cost the “fair market value” of $8.5 million, according to the deed, but the granter offered a $2 million donation to pare it down to $6.5 million.

Because the land is publicly-owned and therefor tax exempt, the Iowa City Assessor’s Office hasn’t done a deep-dive into the value of the building — although the land’s 2023 assessed value is $1.4 million, according to public records.

Iowa City Assessor Brad Comer last week told The Gazette his office aims to assess the property before students return in August for UI’s final year housing students in Mayflower — which sits a mile from the heart of campus and is the least-liked and last-chosen dorm of the fleet.

For that reason, and to save on maintenance of the aging hall, administrators intend to sell it and build a new $40- to $60-million residence hall closer to campus specifically for returning students — as opposed to freshmen.

The university intends to pay for its new residence hall with proceeds from the Mayflower sale and borrowing.

'Price that was higher’

When Edberg began working with the university on its pursuit to sell Mayflower, he told The Gazette, he suggested asking for more than $45 million.

“The $45 million was a price selected by the university,” he said. “I had a recommended price that was higher than that — based on capitalizing the income produced by the property.”

But, Edberg said, the university isn’t solely interested in the financials.

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“The university has a greater vision to fulfill,” he said. “They are a part of the community in a very real sense.”

The property, from a buyer’s perspective, has a lot of “good news,” Edberg said — including that the city in 2018 raised the adjacent Dubuque Street to move Mayflower out of the 100-year-flood zone.

“So it is not in any flood zone at all,” he said.

Although most of the building is outfitted with living suites, the first floor offers large and small meeting rooms, a lounge, exercise room, and convenience store. The building also offers two underground parking levels, although both are out of use and would need study before reopening.

“This sale represents a return from public to private use,” according to a flier for the property, outlining zoning technicalities involved in such a transfer.

The population within five miles of the property was 107,905 in 2022, with expectations it will grow to 112,226 by 2027, according to the property flier. The median age within that area is just over 29.

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Ideas for the property from prospective buyers have included making it a multiuse building — with some workforce, elder, and student housing. With four elevators, 174 parking spaces, and suite-style bedroom pairings complete with kitchens and bathrooms, Edberg said the building would be compatible with all three.

“The ultimate decider would be the buyer and what their vision is,” he said. “They come up with a plan and a price and see if the university also agrees. If they do, we’ll change the name on the deed.”

Edberg said the latest person to look at the site said “they would like to pursue it.”

“Hope springs eternal,” he said. “And I’m an optimist.”

Regardless, the university doesn’t plan to vacate the property until next summer — allowing it to house students as a residence hall for one more academic year.

“I’m encouraged that we’re on the right track, that we will have a new owner,” Edberg said. “And that the university will be able to move on and finish their dream.”

Vanessa Miller covers higher education for The Gazette.

Comments: (319) 339-3158; vanessa.miller@thegazette.com