Frew Development seeks state funds for $34M housing project as part Westdale Mall redevelopment

CEDAR RAPIDS — After the original vision of attracting major retailers to a re-imaging of the former Westdale Mall site faltered, the 71-acre tract’s redevelopment continues as the developer behind its transformation pursues a $34 million project to build 200 rental units.

Frew Development is seeking state workforce housing tax credits through the Iowa Economic Development Authority to help build four multifamily housing complexes at the site in the southwest quadrant of Cedar Rapids.

There would be three 52-unit buildings and one 44-unit building as part of the development, adding 104 one-bedroom units, 80 two-bedroom units and 16 three-bedroom units.

The timeline for construction is unclear.

The program provides state investment tax credits of up to 10 percent of the investment related to the housing portion of the project. The city incentives toward the Westdale Mall redevelopment, approved in 2013, would serve as the local match needed to leverage the state funds.

City incentives for this portion of the project are estimated to total $4 million, according to City Council documents.

With city support, Frew Development took on the $90 million overhaul of Westdale Mall, which focused on finding new uses to fill the large spaces and create a mix of dining, shopping, services and living to transform the site from a 1979-built traditional shopping mall. Work began in 2014.

The developer did not respond to requests for comment Wednesday.

NewBo mixed-use development

Besides the Westdale project, the City Council also gave the green light to terms for a $9.8 million redevelopment of empty land in the New Bohemia District into a mixed-use site.

Chad Pelley is spearheading the development group, LTRI LLC, that’s behind the project to transform the land from 1218 to 1310 Third St. SE. This is the space next to a parking lot adjacent to Brewhemia and The Olympic South Side Theater.

The proposal calls for a four-story mixed-use facility. The first floor would include commercial space in the front and covered parking in the rear, in addition to 25 surface parking spaces. The second through fourth floors would include 34 residential units renting at market rate. Plans include some rooftop gathering space, a raised patio on the first floor, a spot for public art on the exterior walls and some greenery and plants around the perimeter.

The project includes two lots — at 1302 and 1306 Third St. SE — that had been owned by the city before being transferred. City Economic Development Manager Caleb Mason said the developer would have to incorporate flood mitigation measures since the building sits in the 100-year flood plain

Construction is expected to start by March 1, 2023, and finish by Sept. 31, 2024.

It qualifies for city incentives under the city’s Targeted District Reinvestment program based on its location in NewBo.

The city would reimburse 100 percent of the incremental taxes the project generates — up to $1.67 million net present value or for a period of 20 years. The developer also is seeking workforce housing tax credits to support the project.

The city also has above-standard incentives when the standard 10-year, 100 percent tax abatement is inadequate to make the project viable. Mason said the city would conduct a “gap” analysis to determine the “appropriate level of incentives to make the project financially feasible.”

Council member Ashley Vanorny said this project adds density to the area that could give a boost to businesses in NewBo.

“This design is something that sparks interest,” Vanorny said. “I appreciate the intentional nature of having artwork on it … but also utilizing the extra spaces there, really filling that in so that there is a naturescape there.”

“This is really beautiful,” council member Ann Poe agreed.

TaxAct site to be turned into housing

The council authorized tax incentives for PBI-Sbiz LLC, an entity of developer Fred Timko, to redevelop the vacant site at 1425 60th St. NE, formerly TaxAct, into new residential units.

The resolution the council approved Tuesday also supports an application for workforce housing tax credits.

Plans call for a $1.75 million investment to redevelop the existing parking lot and build 12 units, which Mason said would be three four-unit townhomes renting at market rate.

The city will offer a 10-year, 100 percent exemption on the increased value generated by the project under Cedar Rapids’ local match economic development program.

Over 10 years, the city estimates the development would generate $402,000 in total taxes, with $320,000 being exempted during that period.

Northwest quadrant developments

City staff have the OK to negotiate development agreements with local developers after the council authorized the disposition of three city-owned properties in the northwest quadrant to make way for a mixed-use facility and an expanded parking lot.

Developer Gutschmidt Properties is looking to turn the properties at 107 and 111 10th St. NW into a nine-unit mixed-use, loft-style building for $2.3 million. It would contain a mix of unit sizes with a goal to maintain affordability, city planner Jeff Wozencraft said.

Three stories would face First Avenue West and then the rear would slope to two stories. There would be retail space along First Avenue West and 10th Street NW.

Entrepreneur and developer John Khairallah is proposing a $50,000 expansion of an existing parking lot at 630 First Ave. NW to support residential uses and an adjacent commercial building. The site is next to El Mercadito.

Wozencraft said the local grocer has “seen growth in sales over the last few years and has had issues with rush hours where customer parking is limited.”

The plans were approved by a proposal review committee made up of one member of the Northwest Neighbors Neighborhood Association, financial lenders and non-competing developers.

Wozencraft said staff anticipate returning to council with development agreements this spring and summer.

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