The renovation of The Roosevelt, the flood-damaged apartment complex that once was a hotel, may now begin by month’s end, Jackie Nickolaus, vice president of developer Sherman Associates, said Wednesday.
Nickolaus was providing the project update as the Iowa Finance Authority, which met in Cedar Rapids, approved an additional $804,750 in affordable housing tax credits to help fund the renovation project.
Sherman Associates earlier had secured $5.985 million in tax credits from the state authority, but on Wednesday returned to ask for a supplemental grant.
Nickolaus said the additional tax credits were needed to cover additional costs for environmental testing and cleanup, elevator restoration, some demolition and pipe and mechanical system replacement.
The hope, she said, is to move tenants into the 12-story building’s top three floors six months after renovation starts. The project should be complete in a year, Nickolaus said.
The renovation will convert non-residential space on the building’s second floor into apartments, but will retain the first floor as commercial space. “Quite a few” possible commercial tenants have looked at the first floor, Nickolaus said.
In late April, Sherman Associates, of Minneapolis, Minn., put the total cost of the renovation at $10.3 million. The city has given the project a 30-year, $1.6-million loan at 1 percent interest, though the loan will lessen to $1 million if and when the project also secures historic tax credits.
Affordable housing projects dependent on federal tax credits have had difficulty getting started in recent months because of the economy. Nickolaus said Sherman Associates has investors to buy the credits for The Roosevelt project.
With tax credits, investors contribute money to a project upfront in exchange for credit against their taxes over a period of 10 years. Of late, the investors have only been willing to provide about 70 percent in upfront money of the tax-credit value they will receive. In better economic times, projects have received more than 90 percent of the tax-credit value in upfront cash, state officials have said.
Sherman Associates bought The Roosevelt in December for $2.2 million.