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Cedar Rapids, Iowa 52401
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CEDAR RAPIDS - City officials are prepared to offer as much as $13.6 million over the next 20 years to an Illinois developer planning a $50.8 million renovation of the Guaranty Bank Building, World Theater and a new hotel downtown.
Renderings of the proposed project, revealed during a news conference Thursday afternoon, show the new hotel development with a brick-and-concrete facade and a courtyard area between it and the back of the World Theater. The new hotel, which is expected to be branded as an AC by Marriott, will have nine floors and 126 rooms, along with a rooftop bar.
The majority of the Guaranty Bank Building's remodeling will be in the interior, with a Johnny's Italian Steakhouse restaurant spanning across 8,000 square feet on the first floor. The 79 hotel rooms on the higher floors of that building will be branded under the Courtyard by Marriott name.
Mike Whalen, chief executive officer of the Moline, Ill.-based developer Heart of America Group, said the restaurant and hotels will bring more Cedar Rapids residents to the downtown area along with more visitors from out of town.
'Ninety percent of the people that will come into the restaurant will not be staying in these hotels, 10 percent of people will be staying in the hotels,” he said. ' ... It's going to be a go-to, not a drive-by place.”
Heart of America Group currently operates seven hotels and four restaurants in the Des Moines metro area, and one hotel and five restaurants in the Quad Cities.
The company plans to have the new hotel completed by summer 2020, Whalen said, while the completion date for the historic renovations depends on how quickly state and federal historic preservation groups give their approval.
Whalen said the company expects to hire 150 permanent employees after construction is complete, along with between 175,000 to 200,000 customers annually.
The Guaranty Bank Building, completed in 1896 at the corner of Third Street SE and Third Avenue SE, has been vacant since May ahead of the planned renovation.
Mayor Brad Hart said the city plans to offer $3 million upon the project's completion and $10.6 million in tax increment financing over 20 years. He argued that amount is 'necessary and crucial” to move the renovations forward and help cover the cost of designing and building the new tower.
Hart said the city needs those additional hotel rooms to be more competitive in hosting large conferences and their attendees - the DoubleTree, with 270 rooms, is the only downtown hotel. The new hotels and restaurant also will spur more development and foot traffic in the area, he said.
'We've been told for years we need more hotel rooms downtown so that we can have more and larger conventions in the convention center, and this will do just that,” he said.
The Iowa Economic Development Authority previously approved up to $1 million in state brownfield tax credits for the project. Brownfield credits are earmarked to restore properties that might have asbestos or other materials previously used in construction that were later found to be an environmental or health risk.
City Manager Jeff Pomeranz said the project is estimated to provide more than $16 million in additional property tax revenue at the end of the financing period, and between $500,000 to $600,000 in extra hotel/motel tax revenue annually.
Pomeranz said Heart of America will pay taxes on the current $2 million property valuation throughout the financing period.
The Cedar Rapids City Council will review an initial development agreement at its next meeting Nov. 13, and city officials and Heart of America Group would then spend up to 60 days negotiating details within that agreement.
Correction: this article has been updated to reflect the correct amount of financial support the city is offering to this project.
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