The $6 million project is the first to add for-sale units in the downtown market since the completion of Hubbell's Brownstones projects at Second and Grand avenues.
The final stages of those units sold out at a time when the downtown for-sale market stalled during the collapse of real estate sales.
Hubbell President and CEO Rick Tollakson said the project makes sense now for the simple reason that the company has exhausted its supply of downtown for-sale properties. The company met little buyer resistance at Second and Grand.
The project is significant for another reason. It takes a prime piece of downtown real estate off the market.
Hubbell is in negotiations on a one-block deep parcel that connects Grand and Ingersoll avenues at 17th Street. It is the former location of Iowa Paint Manufacturing Co. and was bought in July 2012 by Meredith Corp. for $1.25 million.
Meredith bought the property after a Subway sandwich shop opened in the neighborhood, irking some downtown leaders who envisioned a business more in line with their ideas for the ambiance and overall development plans for Western Gateway.
The Iowa Paint property and sandwich shop are north of the John and Mary Pappajohn Sculpture Park.
Tollakson said Meredith was keenly interested in the type of project that would occupy the Iowa Paint site. The two companies have been in negotiations for several months. He would not disclose a purchase price, saying some details of the deal need to be worked out.
Hubbell plans 27 two-story townhouses with two-car garages. The 1,350-square-foot units will have three bedrooms, three baths and rooftop patios with pergolas. They will sell for around $250,000. Shiffler & Associates Inc. is the architect.
Hubbell plans to keep a distinctive 6,000-square-foot building on the property that once served as an Iowa Paint store and warehouse, and will sell or lease it.
Hubbell is known for leaping into favorable market conditions. It managed to whether the recession by buying bank-owned properties that had been lost by other developers and building them out. It also launched a series of renovation projects that turned old downtown warehouses and office buildings into rental units. In recent years,it has added 324 units downtown and has another 410 under construction.
The completed projects typically were 100 percent leased when they opened.
When asked why he believed the downtown market would support a for-sale project, Tollakson pointed to the success of the Brownstones on Grand project.
"We sold them all. That's the best market indication. We have sold all of our condos, all of our townhomes. Others were sold quite quickly and that's why we believe this product will be successful here," he said.
The Iowa Paint site provided the perfect location, given its proximity to the sculpture park and large employers Meredith, Wellmark Blue Cross and Blue Shield and Nationwide Insurance Co.
"It's not easy to find sites where can do more than a couple of units," Tollakson said.
He suspects that with a few thousand workers near Artisan Row, it will not be difficult to sell out the project.
In a Business Record article about Meredith's purchase of the property, Glenn Lyons, president and CEO of the Downtown Community Alliance, said, "It's a key development site, probably the most important remaining undeveloped site in the Western Gateway area." Click here to read the article.