Developers eye downtown Cedar Rapids property as possible hotel

CEDAR RAPIDS - At least two developers are expressing interest in redeveloping a former bank building at one of the busiest intersections in downtown Cedar Rapids, possibly into a hotel.

Steve Emerson, in partnership with Heart of America Group, a Moline, Ill., hotel and restaurant firm, has proposed restoring the rust-colored Guaranty Bank and Trust Co. building, on the northeast corner of Third Street and Third Avenue SE, into a boutique hotel.

'I just see it as a vacant building that wants to be developed,” said Emerson, who has a portfolio of historic restoration projects. 'The city has been talking about the need for more rooms to make the business center work better.”

Emerson's concept also includes redeveloping much of the rest of the block, which includes the old World Theater, a surface parking lot and the Hazzard County Saloon. Emerson said the project also would include condominiums, and the World Theater could be restored possibly into a ballroom and common space.

Ravi Patel, president of Burlington-based Hawkeye Hotels, which has been growing its chain of properties, said he, too, sees potential.

'If the Guaranty Bank building becomes available to our firm or anyone else, it could unlock a lot of potential on that block of the city,” Patel said in a statement. 'Economic development in Cedar Rapids has been on a steady rise, and we have continued to look for possible hotel sites there, particularly in the downtown area.”

The six story building has stood as a fixture there since being completed in 1896. It's part of a block bound by Third Avenue, Third Street, Second Avenue and the Fourth Street SE railroad corridor. The Witwer Center with the White Star Ale House is the only property on the block owned by a different entity and is not part of the ideas.

The land is not yet listed for sale, but possibilities opened up earlier this month. QCR Holdings, the parent company of Cedar Rapids Bank & Trust, announced a deal in June to acquire all of Cedar Rapids-based Guaranty Bank in a $44.2 million deal. The downtown branch of Guaranty Bank on Third Avenue SE closed this month.

Larry Helling, president and chief executive of Cedar Rapids Bank, told The Gazette earlier this month his company would try to sell the property in the future.

In a call Thursday, Helling declined to comment. 'We are not going to talk about our private business,” he said.

The Guaranty Bank building, Hazzard County building, the World Theater and the parking lots have a combined assessed value of more than $2.8 million, according to the Cedar Rapids Assessor's website.

It is prime real estate with potential to be more than it is, Cedar Rapids Mayor Ron Corbett said.

'That is a critical corner in the community,” Corbett said. 'The fact they are looking at a boutique hotel and additional housing, that's good news. ... It's an opportunity to use the space more efficiently. The World Theater basically has been mothballed for quite some time.”

Corbett praised the possibility of turning the Guaranty Bank building into a hotel as a good use, and touted the excitement developers and investors have in the downtown area.

Corbett noted the city has been covering the costs to create a quiet zone downtown to hush train whistles as a way to encourage more downtown living. Work on the quiet zone is underway and eventually will include railroad crossing arms. The city has said it anticipates seeking a quiet zone designation some time late next year.

Corbett said he wasn't sure how many developers have pitched ideas for the property, but it could be more than two.

While this is a private real estate deal, a redevelopment project likely would come before the city at some point, he said. Large redevelopment projects are eligible for public subsidies, but such agreements must be presented to the City Council for approval.

l Comments: (319) 339-3177; brian.morelli@thegazette.com