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State tax credits for planned Cedar Rapids hotels at risk?

Preservationists rally support for Guaranty Bank, World Theater project

The Heart of America group plans to renovate the Guaranty Bank Building in downtown Cedar Rapids into a boutique hotel and repurpose the next-door World Theater, preserving its facade. The developer is seeking about $7 in historic tax credits from the state, which, according to local historic preservation advocates, is pushing back on plans for the theater. (Jim Slosiarek/The Gazette)
The Heart of America group plans to renovate the Guaranty Bank Building in downtown Cedar Rapids into a boutique hotel and repurpose the next-door World Theater, preserving its facade. The developer is seeking about $7 in historic tax credits from the state, which, according to local historic preservation advocates, is pushing back on plans for the theater. (Jim Slosiarek/The Gazette)
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CEDAR RAPIDS — Historic preservation advocates are rallying around the proposed repurposing of two iconic downtown structures into hotels, saying the state is pushing back on granting millions in tax credits for the project in its current form.

The Historic Preservation Commission voted Thursday to send a letter of support to Steve King of the State Historical Society of Iowa, which evaluates applications for historic tax credits, advocating for the Heart of America Group’s $50 million plans to renovate the Guaranty Bank Building into a boutique hotel and part of the World Theater into a new-construction hotel.

The planned project, which also includes a steakhouse and a rooftop bar and restaurant, encompasses most of the block at Third Street and Third Avenue SE.

The commission wrote that the project is “vital to ensuring the preservation of both of these historic assets” and “an incredible win for historic preservation in our community.”

“While we are incredibly excited about both of these buildings being utilized in this project, we wanted to specifically express our support for the restoration and partial reuse of the World Theatre building, which stopped operating as a theatre in 1981 and has sat vacant in our downtown for many years,” according to the letter signed by commission Chairman Tim Oberbroeckling, which added that the fate of the building has been a concern.

For its part, the state office said it does not have an active application for the project and declined to comment.

Other history advocacy groups also are writing letters of support for the proposed project. Cedar Rapids Friends of Historic Preservation already sent a letter of support, and Save CR Heritage also is expected to send a letter.

The state “wants them to make it more of a theater, which is just not feasible,” Oberbroeckling said during a meeting Thursday.

Historic preservation advocates fear if Heart of America doesn’t get the historic tax credits, it could hamper — or possible torpedo — the project, and put the World Theater building at risk.

While recognized nationally as being in a historic district, the World Theater is not protected from demolition.

The proposed project would restore the “front facade of the theatre building, which includes keeping the round-arch opening in the front atrium and utilizing the heavy riveted truss as an architectural feature,” the letter states.

“Because the theatre was previously gutted and the stage and other architectural elements were removed, the HPC strongly believes that Heart of America is preserving what is important about the World Theatre building,” the letter states.

Mike Whalen, of the Heart of America Group, said the developer is seeking about $7 million in historic tax credits. Such tax credits are necessary because of “all of the little surprises” that come with historic renovations, he said.

“Our current plan is contingent on getting the tax credits,” he said. “As to what plan B would be, I don’t know. I think our plan A is a killer.”

The city of Cedar Rapids has given full throated support to the project, and has approved $13 million in tax incentives, and the Iowa Economic Development Authority has awarded up to $1 million in brownfield tax credits also.

l Comments: (319) 398-8310; brian.morelli@thegazette.com

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