The Gazette covers City Hall, now a flood-damaged icon on May's Island in the Cedar River

Chapter closes on Osada low-income apartments; new one is opening on Bottleworks condos; first units ready in August

In Alliant Energy, City Hall, Kris Gulick, New Bohemia on May 16, 2008 at 2:29 pm

New life for the empty Osada building has begun to take shape.

Fred Timko, president of Point Builders Inc. of Cedar Rapids, reports that his company has begun the renovation of the Osada building from its former self, 67 units of low-income loft apartments, to its new self, 58 condominium units.

The first four condo units — units will be priced generally between $100,000 and $200,000 — should be ready for display in August, Timko reports.

Timko is calling the new condos, Bottleworks. The five-story, warehouse-style building, at 905 Third St. SE, once was just that, a Hires Root Beer bottleworks, he says.

The progress on the Osada transformation came to mind this week when Tom Aller and Jim Ernst made appearances at the City Council meeting.

Aller is president if Alliant Energy’s subsidiary Interstate Power and Light Co.; Ernst, president/CEO of the family services agency, Four Oaks.

Both were big players in seeing to it that something came of the failed Osada project.

Osada was created a decade ago in a complicated, creative financing arrangement that included upfront money from Alliant Investments Inc. in exchange for the federal government awarding Alliant tax credits against some of the company’s federal tax load.

Alliant, thus, was a limited, behind-the-scenes partner in the Osada project with the MidAmerica Housing Partnership. And then MAHP failed last fall.

Four Oaks stepped in to operate the assortment of MAHP properties, and it since has created the Affordable Housing Network to assume control of the former MAHP units.

But as Ernst told the City Council again this week, the  Osada project was simply too big and too financially troubled to continue in its role as a low-income housing.

In the financial agreements between the Iowa Finance Authority, Alliant and Timko in closing the books on Osada, a Timko-led entity called BPI-GRR LLC, has paid about $3.1 million for the Osada building, money that the Authority and Alliant have taken to try to cover what they had invested  the property. Neither the Authority nor Alliant was expected to be made whole on their investments.

From the $3.1 million, Aller presented a check of $175,000 to Ernst and the Affordable Housing Network as part of that financial settlement closing out the former life of the Osada venture.

Ernst, in turn, handed the check to the city of Cedar Rapids to cover liens the city held against another former MAHP property, the 15-unit Brown Apartments, 1234 Fourth Ave. SE. The check to the city, Ernst explained in front of the City Council, clears the way for a new, $2-million tax-credit investment that will allow for the renovation of the Brown Apartments for affordable housing.

In front of the council, Aller thanked Ernst and Four Oaks for its role in stepping in to rescue most of the MAHP properties and to help figure out a new life for the Osada building.

“Cedar Rapids is a better place because of what Jim Ernst and Four Oaks have done,” Aller said.

Ernst said every resident of the former Osada project who has chosen so has been placed in a new living situation here, and all of those people have spoken positively of the move, he said.

Ernst told the council that the city is in great need of more affordable housing units, particularly three- and four-bedroom apartments.

Council member Kris Gulick asked Ernst about affordable-housing demand, and Ernst said there were over 1,000 families that could benefit from additional affordable housing in the community.

As a side note, Point Builders’ Timko says he thinks the city’s proposal to build its new Intermodal Transit Facility across Third Street SE from Bottleworks will enhance the Bottleworks property and be an asset for those who come to live there. The Intermodal will be a scaled-back version of a former design, which incorporated a 500-vehicle parking ramp into the design.

Timko also is one of the people on a new committee to try to hash out differing ideas on the design of the Third Street SE renovation project, which the City Council has given the go-ahead on. The New Bohemia group has wanted a more modern design, while some property owners have insisted on a Czech theme similar to Czech Village across the river. Timko isn’t from either camp.

  1. So, the city loses the low income housing units it had at OSADA, we still have a need for over 1,000 units of affordable housing, and people who can afford $100,000 to $200,000 dollar condominiums get the benefit of bus transportation right across the street? I’m I missing something here? Oh, yes, what money comes from the project goes back into the hand full of units at the Brown Apartment complex to put it into some sort of shape where people will be able to continue living there, what a deal! That really took some creative thinking on the cities part! And not one person was jailed in the process of misappropriating one red cent, how do they do it!

  2. Hey don’t knock it It took the City several years to close down the Osada building so the low inoome people wouldn’t be next to the next condo project next door.

  3. That’s ridiculous. It was the failure of MAHP and the treatment of the building by SOME of it’s residents that lead to it’s disrepair and ultimate downfall. The building was not going to be low income housing anymore, regardless of what was going to replace it. Be glad it is not just sitting empty.

  4. I realize this is a long time after this was news, but as I reflect on what happened, poor people were still screwed out of decent housing. If the truth be known, it wasn’t the residents who caused the problem. It had more to do with pulling the dumpsters and firing all the maintenance staff over eleven months prior to closing the building. How would your house look if you had no money and no transportation and the people in charge of hauling away your garbage stopped doing it? Or maintenance on your home stopped especially if you have at least 100 kids coming and going? MAHP failed, but who was charged with that responsibility? Certainly it was not the residents. And why weren’t charges prefered on the board who drove the low income housing authority into the ground? They had a fiscal responsibility to make that non-profit work, if they couldn’t do it, they should have told the city well before they had such a high vacancy rate when there were so many people looking for housing and still are. Tell me why you would build an expensive condo project ten feet from a low income project if you didn’t know eventually it would be gone. Good business sense would say people in good concience are not going to want to live next to poor people if they are paying big bucks for a place to live, it is just that simple. Stop blaming the poor for the deal the money guys cut on their backs.

  5. Oh yes,just what we need to do,put condos in downtown and move low income as far away as we can so that we don’t have to look at them or acknowledge that they are here.I’m not low income,but it still burns me up the way that this city seems to treat them.I believe more than half of the problems at Osada came from who was managing it.I like the way Ernst says that the people they moved out of Osada are happy with the move but we sure don’t hear any of them telling us that.It’s time this city quit trying to be a New York City,or other big city.Good God,we’re a midwest city that is losing all of our businesses and eventually we’ll lose all of our residents.Can see it will no longer be Cedar Rapids,it will be Ghost Town .

  6. I say this with no joy but I regretfully predict this project will be a stunning failure.

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