Third time may be a charm for historic property’s rehabilitation
Minneapolis-based Sherman Associates Inc. is now “on a fast track” to purchase the six-story Rumely Building at 104 S.W. Fourth St. by Aug. 31 and “start work as soon as possible” on its renovation, said Jackie Nickolaus, Sherman’s vice president of development.
She said the project has been expanded to include the acquisition and demolition of the single-story National Sheet Metal building at 101 S.W. Fifth Street. That site will be used for parking. The two buildings sit across Market Street from the Science Center of Iowa.
Plans to convert the historic Rumely Building into affordable housing units have a history of their own.
Since 2006, various developers based in Seattle, Chicago and now Minneapolis have proposed to remodel the 106-year-old warehouse. The first two applicants, Dick Sontgerath and J&T Development LLC, backed off when no investors could be secured to purchase low-income housing tax credits (LIHTC) awarded to the project.
Most recently, Sherman announced last year its plan to rehabilitate the building and convert it into 66 apartments with 6,000 square feet of ground-level commercial space.
Sherman had hoped to break ground on the $16 million rehab last spring. But, as with the previous prospective buyers, the inability to secure an investor to purchase the tax credits once again stalled the initiative.
“We were still trying to find an investor at that time,” said Nickolaus. On Thursday, she confirmed that the company has tapped WNC & Associates Inc., a tax credit syndicator based in Irvine, Calif., to purchase the $10.5 million worth of LIHTC awarded to Sherman for the project, clearing a way for it to move forward.
“Our intention is to demolish the (National Sheet Metal) building and put in surface parking,” Nickolaus said. The 25 to 30 parking spaces are being planned for employees of the building’s commercial tenants, she said, but Sherman will have 12 to 14 months, the estimated time frame to complete the project, to work out the details. With the expanded site plan, the project’s cost has been “ratcheted up” to about $17 million, Nickolaus said.
Sherman has also been awarded $426,332 under Section 1602, a U.S. Treasury Department program that allows the Iowa Finance Authority, the state’s administrator of LIHTC, to exchange a portion of its tax credits for cash grants, which are in turn allocated to projects in lieu of loans.
In June, the state of Iowa received $72.7 million in Section 1602 funds, as well as a direct allocation of $18.9 million from the U.S. Department of Housing and Urban Development as part of the American Recovery and Reinvestment Act’s Tax Credit Assistance Program.
Tulsa, Okla.-based Sikes Abernathie Architects has been selected as the Rumely project’s architect, and Hopkins, Minn.-based Frana Cos. has been chosen as the general contractor.
Nickolaus declined to disclose the pending purchase price of either building. The Polk County assessor has assessed the Rumely property at $902,000 and the National Sheet Metal building and the land it sits on at $168,500.
Tim McConnell, owner of Indianola-based Tim McConnell Fine Photography, said he expects a collective sigh from at least 10 professional photographers who regularly use the 80-year-old National Sheet Metal building’s façade as a backdrop for photo shoots when they learn of the building’s fate.
“That is the best alley in town,” he said. “Hollywood couldn’t do it that good.”