CEDAR RAPIDS — The $90 million-plus Westdale Mall transformation project got a new dose of City Council financial backing Tuesday night to keep the project moving ahead.
On a 7-1 vote, the council agreed to guarantee an $11.5 million bank loan to Frew Development Group, a move that council members called a compromise after developer John Frew approached the city in February and asked for an additional $11.5 million in upfront city money to keep the project going.
In response to the Frew’s request earlier this year, City Manager Jeff Pomeranz put together a Westdale Study Committee, which included council members Kris Gulick, Justin Shields and Scott Olson, as well as Pomeranz, to come up with an alternative. The committee came up with the loan guarantee.
Cedar Rapids Bank & Trust Co. will lend the money to Frew with the city’s guarantee in place.
Pomeranz last night called the guarantee “very reasonable for the city if we want to redevelop Westdale as we know it.”
Gulick said the city could have done nothing and watched the project shut down. The agreement, he said, was the “best conclusion” the city could have reached.
Olson, a commercial Realtor, said the negotiations with Frew, the city, banks and others was “the most complicated” he had seen. Olson said the bank has access to five other avenues of revenue from the developers and the project before it would require the city to begin to pay off the loan.
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Frew has demolished the mall except for anchor stores J.C. Penney Co. and Younkers, which still operate, and the vacant anchor store where Von Maur used to be. He plans to bring a mix of retail, office and residential to the 72-acre site.