Preliminary review calls One Park Place ‘viable’

CEDAR RAPIDS - The first hurdle is cleared for a massive proposed downtown structure called One Park Place, which would be the tallest and most expensive private development ever in Cedar Rapids.

The National Development Council is conducting the review of the 28-story, $103 million high rise with a grocery store, apartments, condos, hotel, parking and rooftop restaurant proposed for the east corner of First Street SE and Third Avenue SE. Cedar Rapids leaders required putting the project under a financial microscope before formally giving a green light.

The New York-based firm has completed the first tier of its review, which considered project viability and reasonableness of a subsidy request.

'From this early look, it appears the project is viable and that the requested subsidy is within the range of what may reasonably be required to successfully complete and operate the project,” Karen Garritson, director of the development council, wrote in a July 8 update.

She quickly couched her comments with six caveats:

' The budget will continue to be refined to reflect lease and sales rates of the various components of the project.

' Market analysis of demand for retail, rental and owned housing, office, hotel, and parking at the proposed prices.

' Plans for financing debt and equity will be clarified and evaluated for strength

' Negotiations will be completed and impacts evaluated for two non-city own properties needed for the project, parking spaces intended for Alliant Energy and others, and the hotel's acquisition of an amenity floor.

' Possible revisions to building plans, such as the number and cost of parking spaces, and alternative uses for the amenity floor.

' Review alternative public assistance arrangements, such as if the city provides annual rebates.

One Park Place developers Jesse Allen, of Allen Development in Iowa City, and Dave Zahradnik, Cedar Rapids-based principal architect at Neumann Monson Architects, sought $23 million up front in public subsidies, but city leaders quickly balked at the request. The proposal uses three city-owned parcels, which the city wants to sell, and two privately-owned parcels, which the developers say they are working to acquire.

The firm now moves into the second tier of the financial review, which goes in depth exploring the caveats, including a thorough review of each of the components of the building.

Jennifer Pratt, Cedar Rapids community development director, said the remainder of the review could take up to 90 days.

'We are making sure there are not huge red flags before the city and developer put a lot more time in this,” she said. 'We are glad to see it passed this first part of the analysis.”

If the project passes the second tier of the review, the Cedar Rapids City Council would consider how much and how to structure a public subsidy package. If that happens, construction could begin in spring 2017.