Lofts at Red Cedar gets closer to reality

CEDAR RAPIDS - An ambitious proposal has taken a big step ahead with construction slated to start this year on a $9-million, six-story building - with 46 market-rate apartments, two penthouse condos and a first floor of retail and office space - at First Street SW across the Cedar River from downtown.

The City Council this week approved a development agreement with Hobart Historic Restoration of Cedar Rapids for the project in Kingston Village that the developer is calling Lofts at Red Cedar.

The project will go up on what now are 10, vacant, city-owned lots in the 400 block of First Street SW that the city acquired in its federally funded, flood-recovery buyout program.

In the development agreement, Hobart agrees to pay $25,000, which is the city's appraised value for the property, with the money to return to the buyout program.

In addition, Hobart agrees to make a minimum investment of $9 million and to build the multistory building one foot above the 100-year flood plain. Construction must start by Oct. 15, with project completion within 18 months, according to the development agreement.

The developer also agreed to restrictive covenants, which don't permit certain retail uses in Kingston Village such as tattoo shops, dry cleaning businesses, tobacco stores and payday lending shops.

Jennifer Pratt, the city's development director, told the City Council this week that Hobart also must show proof that it has secured project financing before the city will close on the property sale, which is expected to come in September.

Pratt said the city first sought proposals for the city property in the 400 block of First Street SW in June 2014. Only Hobart submitted a proposal to the city. In December, the City Council directed the city's professional staff to negotiate a development agreement with the developer, she said.

Pratt said Hobart has secured workforce housing tax credits to provide some funding for the project. In addition, she said the project is a core district redevelopment, which qualifies it for a city property-tax break of 100 percent for 10 years on the value of the new investment.

Pratt said Hobart has been working with the city on the city's plans to turn the four-lane First Street SW into a three-lane street with bike lanes and other amenities.