Cedar Rapids developer seeks incentives for $18.5M housing project where fire destroyed UnityPoint office building

CEDAR RAPIDS — A local developer is looking to transform a UnityPoint Health office building that was destroyed in a 2021 fire into a $18.5 million multifamily housing facility.

An entity led by developer Dave Drown is seeking state workforce housing tax credits to build a four-story residential building at 3851 River Ridge Dr. NE, near Edgewood Road and Glass Road NE.

The location isn’t high-traffic enough to be well-suited for retail, and there’s low demand for new office space as the work-from-home changes brought on by the COVID-19 pandemic left many offices still vacant.

“We’ve decided to try to be proactive and what is needed in the market is there continues to be a housing shortage of market-rate apartments,” Drown said.

The proposed development would have 104 units on the second through fourth floors — eight studio units, 50 one-bedrooms, 30 two-bedrooms and 16 three-bedrooms. The first floor would include enclosed parking.

Drown said the project is planned to have an abundance of outdoor amenities including a community room, two pickleball courts with a spectator viewing area, a bocce ball court with an outdoor bar, a barbecue and firepit area as well as a space for dogs. Recognizing the work-from-home environment workers are seeking, there also is a planned coworking common area.

“Somebody could go down the hallway or down a floor or two and get out of their apartment if they need to get away from their spouse, girlfriend, boyfriend or roommate,” Drown said.

The development team opted for a medium-density project to offer something more scale-appropriate for the neighborhood and to allow green space for the residents, Drown said. Construction would start in spring 2024 and last for 16 to 18 months.

As a local match as required by the state workforce tax credit application, the Cedar Rapids City Council on Tuesday approved a 10-year, 100 percent exemption of the increased value of the project. Based on the proposed investment, the estimated total taxes generated is $4.7 million of which $2.8 million would be exempted.

West Side Wolf Pack IV LLC, an entity led by Kory Nanke, also is asking for workforce housing tax credits for a $1.5 million adaptive reuse of the existing 7,000 square-foot commercial warehouse building at 550 Oakland Rd. NE. It would add 12 market-rate units: eight one-bedroom and four two-bedroom units.

City officials estimate the project will generate a total of $218,000 in taxes over a 10-year period, of which $85,000 would be rebated back to the company.

Workforce tax credits awards from the Iowa Economic Development Authority board are anticipated in August, so development agreements for these projects that have not come to council would come back to council likely in September or October.

Seven other projects are also seeking workforce housing tax credits, but already have been considered by the council, so these developments needed only a resolution of support for their application for the state tax credits:

First and First West: The developer is seeking financial support for a $12.9 million mixed-use building on the site of First and First West, the project on First Street SW and First Avenue W that will add hotel rooms, a plaza, Big Grove Brewery and Pickle Palace bar and grill over the coming years. The tax credits would support the construction of 51 market-rate housing units.

Kingston Village redevelopment: A $6.7 million, four-story residential building will add 30 market-rate residential units — a mix of studio, one- and two-bedroom units. The first floor will feature covered parking and walk-up units. This redevelopment of the commercial building at 218 Fourth Ave. SW, which houses ImOn Communications and Kepros Physical Therapy, is led by Fred Timko and Gary Rozek.

Sixth Street SE townhomes: Butterfield Holdings LLC, an entity led by local developer Jason Rogers, is looking to transform 1003 and 1007 Sixth St. SE into a $1.8 million development featuring four two-story townhomes. The buildings will be 1,945 square feet featuring four bedrooms and three bathrooms, with a terrace or patio. Each unit includes an attached two-stall garage in the rear. City officials estimate the project will generate $152,000 in taxes over a 10-year period, of which $120,000 would be reimbursed.

Terex redevelopment: The Hub LLC is seeking financial support for its redevelopment of the former Terex property at 916 16th St. NE, where it’s looking to invest $13.1 million to build 72 market-rate rental units.

Northwest quadrant rowhomes: LTRI LLC, an entity led by Chad Pelley, is looking to redevelop property at Ellis Boulevard and J Avenue NW into a $4.4 million eight-rowhouse structure containing 24 market-rate units. The project is anticipated to generate $500,000 in total taxes over a 10-year period of which $475,000 is exempted.

Sinclair on Sixteenth: Coralville-based developer Watts Group is seeking financial incentives to build its $10.8 million, 29-unit multifamily building at 615 16th Ave. SE with three for-sale condos on the fifth floor as well as the construction of two four-plex townhome buildings. All units are market rate. The city will reimburse 100 percent of the tax increments up to a net present value of $2 million or 20 consecutive annual payments.

Westdale housing: As part of the Westdale Mall redevelopment, the developer is pursuing the construction of $34 million four multifamily buildings. The facilities will add 200 total units: Three 52-unit buildings, one 44-unit building that will bring 104 one-bedroom units, eighty two-bedroom units and 16 three-bedroom units.

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