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Archive for May 27th, 2008|Daily archive page

Minneapolis developer makes his first move in downtown; readies to buy The Roosevelt and renovate it

In City Hall on May 27, 2008 at 10:59 pm

In January, Minneapolis developer George Sherman said he would buy a historic downtown Cedar Rapids building and renovate it, and he is moving ahead to do just that.

News of Sherman’s plans are front and center on this week’s City Council agenda, and Wednesday evening the council will decide if it will approve a $750,000 loan needed as part of Sherman’s $7.7 million plan to purchase and renovate The Roosevelt, the former downtown hotel that began to be converted to apartments in the 1980s.

The 12-story Roosevelt, built in 1927, has been on the National Register of Historic Places since 1991.

Sherman Associates’ vice president Jackie Nickolaus, who works from an office in suburban Des Moines, said Tuesday that the firm would use a mix of state and federal tax credits designed to support affordable housing and the preservation of historic buildings to make the purchase and renovation work.

Nickolaus said the plan is for Sherman Associates to close on the sale in August if all goes as planned.

Renovation — which will increase the building’s rental units from the current 93 to 97 — should be complete a year later. The renovation will convert vacant office space on the building’s second floor to 12 rental units, and at the same time, will combine 10 of the existing efficiencies into other units.

The building’s first floor will remain retail with some space used, as now, by the Cedar Rapids schools.

Nickolaus said the renovation won’t be noticeable from the exterior. At the same time, though, the renovation will take what she called a “tired” building, give it some “polish” and make sure it is remains competitive in the downtown housing market.

The plan is for 75 percent of the units to qualify as affordable housing, which limits what a person can earn in household income to qualify and what the property owner can charge in rent.

For a single-person household, for instance, annual household income cannot exceed $28,320 and monthly rent cannot exceed $708. For a four-person household, annual income can’t exceed $40,500 and monthly rent $1,052, according to Iowa Finance Authority figures for Linn County.

The building is by and large full today, and between 55 to 60 percent of the tenants meet affordable-housing guidelines, Nickolaus said.

Sherman Associates’ owner George Sherman was selected by the City Council in recent months as a preferred developer to help the council and city create some new housing and related development downtown.

In a visit to the City Council just last week, Sherman reported that he had spent some time looking at property, much of it city-owned in the downtown, on which he had some ideas for projects.

He said he most quickly would likely move to identify a half block of property between the city’s two hospitals on which to build 40 to 80 units of “workforce housing” for hospital employees.

Downtown, he talked about building an indoor farmers market, riverfront restaurant and apartments at the Cedar River in the city’s Park & Ride lot along Eighth Avenue SE. The new federal courthouse is scheduled to go up across Eighth Avenue SE.

Sherman also said he had an interest in building a new 140-150-room hotel with conference center on the current site of the First Street parking ramp across from the Alliant tower. Finally, he talked about a 40-50-unit residential building for senior housing on the west side of the Cedar River upstream from the police station.

Sherman talks about Cedar Rapids as an accomplished outsider with insight into development garnered from 25 years of building in the Twin Cities and other spots in the Midwest, including St. Louis and Des Moines.

Sherman says Cedar Rapids’ downtown has not seen the growth of other downtowns in the Midwest; that he won’t build for-sale housing units until 2010 and will build rental units in Cedar Rapids first; and that people will want to live closer to work because the price of gasoline won’t ever come down.