The Iowa Finance Authority on Wednesday allocated the necessary tax credits to jump start a multimillion dollar renovation of the Tallcorn Towers.
CommonBond Communities, a developer based in St. Paul, Minn. plans to renovate the building, 134 E. Main St., into affordable apartments and retail space as part of a $9.7 million facelift.
The group's plan, previously rejected by the IFA last year, is one of 17 projects statewide that received funding.
T-R PHOTO BY DAVID ALEXANDER
Tallcorn Towers, shown here Wednesday afternoon, will see a major revitalization following Iowa Finance Authority allocating more than $600,000 a year in tax credits to the project. The project at 134 E. Main St. is scheduled to get underway in early 2013.
Michelle Spohnheimer, director of housing and community development, said the renovation of Tallcorn Towers has been in the city's sites for a long time.
"From the city perspective, this is a critical project," she said. "It's really a more comprehensive approach to housing and encouraging self sufficiency."
CommonBond will do the rehabilitation and subsequently assume ownership of the building. It will sell the more than $632,000 it will get each year for the next 10 years to equity investors in exchange for a $5.8-million start up stipend.
The company is also seeking historic tax credits to help with the project's hefty cost, said Cynthia Lee, association vice president of housing and development for CommonBond.
Tallcorn Towers now contains 64 efficiencies and one-bedroom apartments. After the project is completed, it will house 49 one-and-two bedroom apartments, Lee said. Rent in the new apartments will be comparable to the current rates.
Residents will be moved into other apartments as construction moves from floor to floor, Lee said.
"Our plan is not to have residents affected negatively," she said.
Potential residents with disabilities will be given preference in 13 of the available apartments, she said.
"We think the project will be a big advantage to Marshalltown," Tallcorn Towers owner B.O. Bryngelson said. "It should be good for our tenants too ... it's good to see Marshalltown going in the right direction."
The Marshall County Assessor valued Tallcorn Towers at just over $600,000, according to a 2012 assessment. Bryngelson said CommonBond will likely pay him between $1 million and $2 million for the building.
In addition to expanding the apartments' size, the housing development will also offer a variety of support services such as youth homework programs and mentoring.
"CommonBond is really focused on resident success and stability," Lee said.
The front of the building's lower level will be renovated to make way for commercial development.
Tina Shapley, director of the Marshalltown Central Business District, said whether the 3,600 square feet of space will be split up among roughly four shops or zoned for a single large restaurant is still unknown.
She said the city does not have a lot of commercial storefronts available.
"This is going to be a tremendous, tremendous benefit to our downtown community," Shapley said. "It's going to be beautiful."
As part of the application to the IFA, the city sold Susie Sower Park to CommonBond for $100 back in January with the contingency that the company move forward with the revitalization of Tallcorn Towers and keep the park open to the public.
The rehabilitation will get underway early 2013 and will take between 10 and 11 months to complete.