A Minneapolis-area development company has agreed to buy the long-shuttered Taylor School in central Davenport and turn it into senior housing — 20 units of historic rehabilitation within the existing brick building and 20 units of new construction in an architecturally compatible addition.
If all of the financing for the estimated $6.3 million project falls in place, construction could begin in the late summer or early fall of 2008, said Murray Klane, a consultant for Gandolf Group of St. Louis Park, Minn.
That is good news for Davenport in general and the Taylor Heights neighborhood in particular, said Bruce Berger, the city’s housing and neighborhood development manager.
The future of the historic school at 15th and Warren streets has been up in the air for about a year, since Quad-City developer Chris Ales — who also planned to turn the former elementary school into a senior living structure — ran into financial problems and stopped work on the project.
This past summer, the chairman of the Davenport Historic Preservation Commission reported to the City Council that, because the roof had been removed as Ales was making improvements, rain was leaking in and causing water damage. That problem was resolved with the installation of a new roof by Wells Fargo Bank, which had assumed ownership of the building from Ales.
The bulk of the estimated $6.3 million cost of the Gandolf project will be for rehabilitation and new construction, with about $100,000 going toward the acquisition, Berger said.
To finance the work, Gandolf will seek $3.86 million in low-income housing tax credits from the Iowa Finance Authority, according to a resolution passed last week by the City Council in support of the application.
The application from Taylor Heights Village Ltd. Partnership, a Gandolf company, will be submitted in November. Credits are awarded on a competitive basis; the next award cycle is in March.
The Gandolf company also will seek $592,000 in equity from the sale of historic preservation tax credits, $1 million in a mortgage, $132,700 in enterprise zone benefits, $325,000 in deferred developer fees and other equity and $300,000 from the city’s HOME (U.S. Housing and Urban Development) funds, according to the council resolution.
Ales also planned to use low-income and historic preservation tax credits to finance his project, but the developer ran into problems when funding dried up for the historic preservation tax credits and he was turned down for the low-income credits.
Previously, however, Ales said he thought the Taylor project was in good position to move forward. That is because the Iowa Legislature pumped substantially more money into the historic preservation tax credits program than had been available when he ran into problems. And although he was turned down for the low-income tax credits, Ales has said he thinks that was because it was simply his turn to sit out. Another developer’s chances might be better because of that, he has said.
“Usually, one out of three applications gets funded, but it depends on the particular year and geography,” Berger said, explaining that the authority likes to spread the money throughout the state.
To proceed, Gandolf also needs a zoning change for the number of units it is planning, and it needs to go before the Historic Preservation Commission because of the exterior changes, Berger said.
While Ales was planning 20 units, Gandolf has determined that an additional 20 new-construction units are necessary to make the project financially feasible, Klane said.
Gandolf’s purchase from Wells Fargo should be final in about a month, Klane added.
Wells Fargo assumed ownership of Taylor School from Ales in June as part of an agreement settling Ales’ financial obligations to the bank.
Gandolf was formed in 2000 and specializes in developing affordable housing projects for families and senior citizens in the central United States. In Iowa, it has a completed a new-construction family project in Burlington and is working on a historic rehab development for families in Des Moines.
Its business plan is to finance projects through the use of tax credits, according to its Web site, gandolfgroup.net.
Alma Gaul can be contacted at (563) 383-2324 or firstname.lastname@example.org.