Cedar Rapids City Council to sort through latest incentive deals

CEDAR RAPIDS - Two high-profile development projects, one downtown and one in New Bohemia, apparently are going to cost city officials relatively more in incentives than they had expected.

On Tuesday, the developer of the Coventry Lofts renovation project, which is under construction at 211 First Ave. SE in the former Coventry Gardens commercial building, will ask the City Council to provide the project a 10-year, 100-percent property-tax break that it had not sought earlier.

The $3.9 million project, which consists of 19 apartments above two first-floor commercial spaces, has received a $2.165-million federal disaster grant through the Iowa Economic Development Authority.

Also Tuesday, the new investors in the delayed New Bohemia Station project on the site of the former Brosh Chapel, 1020-1028 Third St. SE, will ask the City Council to keep in place a 10-year, 100-percent property-tax break even though the project is smaller than it had been.

The council agreed to the property-tax break earlier this year when the proposed project was five stories with a basement theater, came with a minimum $9 million investment and planned to create 20 full-time jobs. The project now will have an initial minimum investment of $4 million, is four stories and must create 12 full-time jobs.

Scott Byers and his son, Craig, both Cedar Rapids developers and Realtors, are new investors in the New Bohemia Station project, and they said last week that the construction on the scaled-down project will begin this fall.

As now conceived, the four-story building will feature a restaurant or retail stores on the first floor, offices on the second floor and two floors of market-rate apartments on top.

The earlier version of the project included 40 extended-stay hotel rooms, but Scott Byers said the project had not been able to identify an interested party to manage the hotel.

In the proposed amended development agreement between New Bohemia Station and the city, the investors state that they expect to complete the project by the end of 2015. The amended agreement also states that the developer will hold the city harmless from any lawsuits from current or former investors in the project.

The Community Development Department is recommending that the City Council approve the amended agreement with New Bohemia Station. The department also is recommending that the council approve the proposed property-tax break on the Coventry Lofts project.

In the latter matter, the department's staff report states that the lofts project, which will have 19 residential apartments, has seen its renovation budget increase by $550,000 because of asbestos and structural issues.

The department's report also states that the City Council has adopted an economic-development program since the start of the Coventry Lofts project, which permits 10-year, 100-percent property tax breaks for downtown housing projects.

The incentive is estimated to be worth $246,529 in property taxes over 10 years, the report states.

At Tuesday's council meeting, the council also will vote on whether to ask the city manager to negotiate a development agreement with two other projects.

Hunter Companies is seeking a five-year, 100-percent property-tax break for its redevelopment of the 23-acre site at 1103 and 1201 Blairs Ferry Road NE that had been home to Nash Finch's warehouse operation and Northwestern States Portland Cement Co. Hunter Companies expects to invest $16 million in the project with demolition at the site expected later this year, the city report states.

The company is looking to convert the site into a mixed-use development of retail, office, medical and financial offices and, perhaps, an auto dealership.

Developer Joe Ahmann and his NewBo Development Group LLC plans to invest $4.9 million to build 28 owner-occupied housing units on the city-owned former chipping green area next to Ellis Golf Course.

Ahmann's plan calls for two, five-unit row houses where owners would qualify for down payment assistance through the city's ROOTs replacement housing program; five duplexes; and eight detached, single-family homes. The proposed purchase price for the city's 6.7-acre Ellis site is $100,000, according to the city report.

An earlier plan to build an apartment complex at the Ellis site was dropped by a different developer when neighbors objected.