The board of Eastern Iowa Community Colleges has unanimously approved the purchase of two downtown buildings for the construction of a new Urban Campus for Scott Community College.
In a meeting Monday, trustees agreed to pay $3.2 million out of reserve funds for the First Federal and First Midwest financial buildings that are between Brady and Main streets, fronting 3rd Street.
If all goes according to plan, construction on the buildings, with a connector building in between, could begin as early as September with classrooms opening in the fall of 2017.
The project is estimated to cost $28 million, to be paid with a combination of a loan, federal and state historic tax credits, new market tax credits, direct investment deferred fees and a capital campaign.
The property was purchased from a company controlled by Amy and Amrit Gill of Restoration St. Louis, the company that is renovating the buildings on the south side of the block into City Square, in addition to having renovated the Hotel Blackhawk, the Renwick Building and the Forrest Block.
Although the Gills previously had been identified as the developer of the campus, plans have changed and that is no longer a given. A developer is expected to be chosen later this year.
The reason for the purchase is that in the months since the project's original announcement two years ago, the nine-member college board and Chancellor Don Doucette concluded that financing for the project would be more favorable if the college district — not Restoration St. Louis — owned the buildings.
After a six-month period of due diligence, consultants hired to investigate the project's legal and financial feasibility presented positive reports earlier this month.
Since that meeting, two "pieces of uncertainty have become more certain," Doucette told the trustees Monday.
First, Doucette has talked with city officials who voiced strong support for creation of a TIF — tax increment financing — district for the campus. That is necessary to make the financial package work.
Second, the project is seeking federal historic tax credits, and in order to qualify, a building has to be listed on the National Register of Historic Places.
An application for National Register status for the First Federal Saving and Loan Building has been reviewed by the state of Iowa and received an unanimous vote for inclusion, Doucette said.
Although the final decision is up to the National Park Service, the state's blessing is a positive sign, he said.
The price paid for the properties represents the amount Restoration St. Louis invested in them — $2.5 million for the purchase and the remainder for holding costs, including architectural and legal services, environmental mitigation and financing, Doucette said.
The Urban Campus would replace the district's two existing downtown locations, the Kahl Building and the second floor of the Ground Transportation Center, consolidating them in one place for more efficiency.
At present, the Kahl has five floors of classrooms and the transportation center has one floor of administrative offices and several classrooms, both owned by the district, for a total of 120,000 square feet of space.
The new campus will be 82,000 square feet, which represents a decrease of space but an increase in efficiency.
"It will be a single, high-efficiency campus," Doucette said. This could result in an operational savings of $500,000 annually, he said.
But the primary reason for building the campus is to provide better opportunities for the urban core and its growing number of residents, he said.
At present, a student cannot finish an associates degree downtown because science lab work is part of any degree, and the Kahl does not have labs. Constructing them in the 100-year-old building would not be financially responsible, Doucette said.
The colleges have had administrative offices in the transportation center since 1986 and has had classrooms in the Kahl since 1996.