To preserve historic tax credits lined up to finance development of Davenport's Achievement Services Center, the district will lease the structure to the building's eventual buyer, Newbury Living of Des Moines.
The Davenport School Board decided unanimously to do so at a special closed session Thursday at the center, 1606 Brady St., Davenport. The lease is now attached to the existing purchase and sale agreement between Newbury Living and the district.
The Newbury company's plan is to pay $950,000 and convert the three-story building into 35 market-rate apartments, with retail/commercial space on the first floor.
The session was held before Dec. 31 to consider the lease in order to develop the structure under current rules for use of historic tax credits.
This was necessary, said school district Director of Operations Mike Maloney, to allow the buyer to preserve equity already approved by the state.
Executing the lease before Dec. 31 allows Newbury Living to continue with its development plan. The company may recoup 20 percent of the cost of the rehabilitation project, financed by the tax credit in the first year.
"It's more equity for the builder right away," said Realtor Joe Wonio, of Mel Foster Co., who represented Newbury Living at Thursday's meeting.
Wonio said he is a dual agent in the transaction, representing both the school district and Newbury Living.
Newbury Living has already paid $20,000 in earnest money for the purchase and sale agreement, according to Maloney. In addition, $20,000 will be deposited for the district's actions with the lease. The earnest money is non-refundable and will be applied to the purchase price.
Davenport's school district headquarters are to move into the J.B. Young Opportunity Center in the summer 2018.
In November, Newbury Living President Frank Levy told the Quad-City Times he is interested in the building because of its proximity to Palmer College of Chiropractic and St. Ambrose University.