One Park Place misses deadline, city eyes new opportunities

CEDAR RAPIDS - An Iowa City developer who proposed building a high rise that would have changed the Cedar Rapids skyline acknowledged he did not meet Monday's city imposed deadline to proceed.

Jesse Allen, the developer behind One Park Place, said a week ago his project was ready to go, but a hotel commitment fell through dealing a 'last minute blow” the project could not overcome.

'Unfortunately, the timing doesn't work out for us,” Allen said. 'We want to do a project that is mutually beneficial for us and the city.”

One Park Place officials had the winning proposal among three in May 2016 to develop the last piece of city owned prime real estate in the downtown grid. Allen's vision for a 28-story, $103 million tower with a grocer, hotel, rooftop restaurant, condos, apartments and parking ramp created a buzz through City Hall and the downtown.

The project addressed many of the identified wishes for the downtown, according to city and business officials, as well as market studies.

The three parcels are located at the corner of First Street and Third Avenue SE where the city leases the ground for a surface parking lot.

Allen took the city's request for proposal for its land to the next level by acquiring additional property to create a half block footprint where One Park Place would have been built. He bought the Pundt property at 330 First St. SE and expects to close on the Risk property at 320 First St. SE by the end of the year, he said.

Allen said he is not going away.

He plans to redevelop the two private properties where small buildings now stand, and would work with the city when it tries again to dispose those three city parcels. He said he may submit a new proposal, adding he could resubmit One Park Place.

When asked whether he requested an extension or to renegotiate the terms, Allen said he wanted to be respectful of the city's process and give other developers a chance to do something with the land.

Prominent local developers Steve Emerson and Fred Timko had the other two bid on the land in 2016. Emerson proposed a $33 million, 11-story project featuring housing, a grocery store and a medical clinic, and Timko offered the 14-story, $33 million Avalon Sky Lofts.

In May 2016, city officials balked at an initial request for $23 million in upfront public financing of One Park Place, and instead proposed paying $5 million when the building was complete and another $15.5 million in tax breaks over the next 20 years. However, the city required Allen to provide proof hat banks would loan the funding necessary to complete the various components, as well as commission a handful of market studies.

In August, the City Council set a 90-day deadline for Allen to meet the terms with financing being the elusive objective. The deadline expired on Monday.

City officials said despite losing out on One Park Place, the last 18 months haven't been for nothing. The city is better off having gone through the process, they said.

'He upped the ante for the vision for what could occur, and we appreciate that. He raised the bar for what is going on that site,” City Manager Jeff Pomeranz said. 'What he was planning is not going forward, but we don't see this as a loss for the city. He now owns something in those two properties that has been difficult for others to obtain. There's a potential for future development we didn't see before.”

City staff will wait until the new City Council members and mayor take office in January before deciding what to do with its land, said Pomeranz and Jennifer Pratt, the city's community development director.

They will draft a new request for proposal outlining the objectives for the property and likely will release that for developers to respond to in the spring, they said. It may not be until the summer before they select a new project, they added.

Pomeranz said despite the hotel being the key piece that fell through, demand for a hotel downtown remains strong and multiple parties are actively discussing opportunities to build a hotel in the area.

The city's request for proposals released in January 2016 sought projects that included financial viability, use of the entire parcel footprint, a multistory urban design of at least five stories, inviting pedestrian-level retail or architectural treatments, coordination of parking needs and market rate housing options.

Pomeranz said the new request for proposal likely will include many of the same attributes, but could include others.

The city acquired 101 Third St. for $486,562 on Oct. 14, 2010, 109 Third Ave. SE for $223,988 on May 5, 2011, and 312 First St. SE for $139,775 on Sept. 7, 2011.

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