Cedar Rapids officials doubtful One Park Place will meet deadline

CEDAR RAPIDS - One of the largest private development proposals in Cedar Rapids history appears unlikely to meet a do-or-die deadline on Monday, which could signal the end of the line for One Park Place.

Cedar Rapids Mayor Ron Corbett said he and City Manager Jeff Pomeranz spoke with Dave Zahradnik, the architect for One Park Place, and learned a deal for a hotel operator had fallen through at the last minute, casting doubt on the 28-story, $103 million high rise slated for downtown next to the Paramount Theatre.

It has been 18 months since the project was selected by the Cedar Rapids City Council over two other proposals and three months since city officials imposed a deadline.

'Certainly, there's been a lot of time granted for this development, and it doesn't appear it is together at this point in time,” Corbett said. 'It may have been an overreach by the developer, and the council was supportive of having a big project.”

Zahradnik and lead developer Jesse Allen did not return multiple messages this week seeking comment.

The Cedar Rapids City Council in August voted to give a 'three-month timeline for the developer to firm up the private financing by no later than Nov. 27, 2017.” Council members want assurances the developer has financial commitment to deliver the project before signing off on a lucrative public incentive package worth $20 million.

One Park Place wowed city officials with promises of a rooftop hotel, a ground floor grocery store, apartments, condos, and a parking ramp, but with so many components it would be extremely complicated to execute, those involved with the project said.

Jim Mondanaro, an Iowa City restaurateur, who would own the grocery store, said he had heard little from the developers in months, but just recently also heard the hotel could be a problem.

'They have the pieces; they just don't have the puzzle completely filled in,” Mondanaro said.

Corbett said he's been exchanging calls with Allen, who says he is continuing to try to meet the deadline. Allen hasn't sought an extension, Corbett said, adding deals can come together quickly, so he is not ruling anything out.

'He could come in Monday and say he has a memorandum of agreement,” Corbett said.

Corbett proposed letting the new mayor and City Council members, who take office in January, decide how to move forward with the property rather than deciding now.

'I'd be willing to grant another 60 days to allow the new mayor and council to make a decision on it, bring it into January,” he said.

Prime Real Estate

Strong interest remains for the three city owned parcels at the corner of First Street and Third Avenue SE, Corbett said. The land is considered prime real estate and the city would quickly seek other proposals for the ground.

Allen had purchased a piece of private property and had a purchase agreement for another piece of property. Those, combined with the three city owned parcels, gave One Park Place a footprint of a half a block. Corbett said Cedar Rapids could wind up with two smaller projects rather than one large one when the dust settles.

One Park Place is one of three proposals submitted for the land in May 2016.

Steve Emerson proposed a $33 million, 11-story project featuring housing, a grocery and a medical clinic, and Fred Timko offered the 14-story, $33 million Avalon Sky Lofts.

Timko said this week he is not sure if he will submit a new proposal. He recommended that before making a decision the city 'brainstorm” uses for both the Paramount site and the 8 acres on the west side where the Cedar Crossing Casino was proposed.

Emerson said he likely would submit a new proposal for the Paramount site, depending on the timing and how much he has on his plate at the time.

'I'd definitely be interested,” said Emerson, noting he owns several pieces of property in the area, including the Smulekoff's building across the street.

Council Reaction

City council member Susie Weinacht said she is ready to move on if the deadline is passed without meeting the terms, but said she'd like to continue working with the One Park Place developers and added they could submit a new proposal once the new process begins.

Scott Olson, a commercial broker and City Council member, agreed Allen could submit a new proposal and said he hopes he does given how much he has invested.

Olson estimated such a project as One Park Place could cost $100,000 in plans, designs, appraisals and so forth. Olson said the amount paid - $1 million - to purchase the private property adjacent to the city land was double what it was worth.

'I know that in talking to several investors they have been working very hard to bring the project to fruition and it's very complicated,” Olson said. 'Given it's taken this long to put the project together they are not going to meet the deadline. They've had more than adequate time. The city has been more than generous.

'It's time to move on and see if someone else can do something with the land.”

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