CEDAR RAPIDS — A new nine-story hotel would add 126 rooms and a renovation of the Guaranty Bank and World Theater buildings would add 75 more to downtown Cedar Rapids under a proposal backed Friday by the Iowa Economic Development Authority.
The authority approved up to $1 million in tax credits for the proposed renovation and released new details on the scope of the project, which includes the new nine-story structure.
In its meeting Friday, the authority board gave the project a brownfield tax credit of up to 12 percent on $33.35 million in qualified costs, for a maximum of $1 million.
The six-story Guaranty Bank Building, completed in 1896 at the corner of Third Street SE and Third Avenue SE, largely has been vacant since May and is part of a proposed $50.8 million redevelopment on the block bounded by Third Avenue, Third Street, Second Avenue and the Fourth Street SE railroad.
The Gazette previously reported local developer Steve Emerson had partnered with Heart of America Group, a hotel and restaurant company from Moline, Ill., to develop plans for a renovation of the historic property.
According to authority documents, the first floor of the Guaranty Bank Building would be converted into a restaurant. The upper five floors and the World Theater Building would be converted into a 75-room hotel.
The authority also mentioned plans for a nine-story, 126-room hotel behind the historic properties, the first public acknowledgment of plans for a second hotel in the overall project.
If the development is realized, downtown Cedar Rapids would have three different hotels, including the DoubleTree by Hilton Hotel Convention Complex.
The Witwer Building, which houses White Star Ale House, has a different owner than the rest of the block and is not part the development.
Heart of America Group Chief Executive Officer Mike Whalen said getting the brownfield credit, which is earmarked to support redevelopment of sites that might have environmentally hazardous materials in them, will reduce worries about finding materials that would be costly to remove.
“Clearly, any time you touch a structure or site that’s got the age that those buildings or sites have, you’re always going to find some little presents you don’t wish to find, so this definitely helps alleviate concerns about those things,” he said.
Whalen declined to offer more detail on the designs of the buildings or other amenities because the group still is in discussions with city officials, building owner Cedar Rapids Bank & Trust and hotel companies about the planned project. However, he said Heart of America intends to make a formal plan submission to the city by mid-November, barring any setbacks.
Ongoing controversy over the dissolution of GO Cedar Rapids, the nonprofit tourism marketer, won’t affect the group’s planning for the project, Whalen said.
City Manager Jeff Pomeranz expects the project to be a major benefit to downtown merchants and the DoubleTree because it adds more rooms near the convention center, making it more competitive in attracting larger conferences, particularly against nearby cities like Coralville, which broke ground on the Iowa Arena at Iowa River Landing earlier this year and is seeing a flurry of hotel construction in that area.
Pomeranz also believes the quality of the proposed hotel rooms will help the city raise daily rates at the DoubleTree, which it owns.
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“By having two new hotels, we just expect that it’s going to lift the daily price per room for the city’s hotel as well as these hotels,” he said.
Pomeranz said the city still is negotiating with Heart of America over the scope of local incentives, historic preservation and other details about the hotel, but he expects to bring terms of the development to the City Council during its Nov. 13 meeting.
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