City Hall and PBI Properties, an affiliate of Point Builders Inc. of Cedar Rapids, have reached a tentative agreement on a development plan to convert the failed, 67-unit, low-income Osada loft-apartment complex into 58 condominium units.
The details of a development plan, which the City Council signaled its support for in November and which the city and company have been working on since, will be voted on by the council at its meeting Wednesday evening.
The matter was a late addition to the council agenda.
Fred Timko, president of Point Builders, on Tuesday afternoon said he expected to begin construction almost immediately on condominium units, which he said will be priced for the buyer at between $100,000 and $200,000.
Timko said he will build four model condos, sell those and continue. Some buyers will be able to have some say on what they want to see in their condominium, he said.
He hoped to have the first residents living in the building, at 905 Third St. SE, by summer, he said.
Timko said he didn’t foresee problems with the City Council approving the development agreement. The agreement provides up to $700,000 in buyer assistance, $100,000 for a park and money for streetscaping. All of that money will come from new property-tax revenue that will result from the improvements made to the building.
Timko estimated it would take six to seven years before revenue generated by the improved property would cover the incentives and then be ready to enter on the general property-tax rolls.
Timko said the new project will be called Bottleworks. In its day, it used to be a Hires Root Beer bottling works, he said.
The building sits next door to the WaterTower Place condominiums, and it is viewed by downtown advocates as an addition of a key downtown asset – more downtown housing.
Adding to the downtown housing stock is among several initiatives embraced by a coalition of community leaders and organizations intent on revitalizing downtown.
“I think this fits right in with their vision of what they want to do downtown,” Timko says.
The former low-income Osada apartments have been all-but empty since last summer after its owner and operator, the non-profit MidAmerica Housing Partnership, failed more than a year ago.
The non-profit Four Oaks stepped in to oversee the MidAmerica properties and has since taken many of them over under an entity called the Affordable Housing Network. The agency and others, though, concluded that the Osada property could not work financially as a low-income property.
PBI Properties is paying about $3 million for the building and plans at least $3.5 million in renovations. The company also is contributing $100,000 to NewBo Park, which the condominium association in the building will own but the entire neighborhood will have access to, Timko said.
The $700,000 buyer-incentive program will allow those who buy units to use a percentage of the cost of a unit for down payment assistance, closing costs or other purchase costs.