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Work began this week to convert the former Kahl nursing home on Davenport's West 9th Street into 57 senior living apartments with the aggressive goal of finishing the project by Dec. 31.

The historic property has sat empty for almost three years since the nursing home moved to a new location in northeast Davenport, and 3rd Ward Alderman Bill Boom calls the new project a "win-win" for everyone.

The complex and the six acres it sits on were purchased in February from the Carmelite System Inc. of Germantown, N.Y., by Gold Coast Housing LLC, owned by DeWitt, Iowa, businessmen Dave and D.J. Necker.

The $10 million-plus project is being led by Chris Ales, who has undertaken various high-profile rehab projects in the Quad-City region, including the conversion of the former Marycrest College, the Renwick mansion and St. Katherine's School in Davenport.

Current work includes asbestos removal and interior demolition in preparation for new construction.

Those familiar with the Kahl, at 1109 W. 9th St., need not worry about its historic features. Those will stay, Ales said.

All main-level rooms in the original mansion will be restored, retaining the multiple fireplaces, wood floors, decorative plaster, coffered ceilings, and leaded- and stained-glass windows.

The study will become the manager’s office, and the library, living room, four-season porch and music/sitting room will be community areas.

The kitchen, pantry and formal dining room will be available for tenants to reserve for special events such as birthdays and anniversaries.

The mansion's second and third floors will have two apartments each and the lower level will have one.

All of the leaded and stained glass in the chapel of a later addition will be preserved. The east end of the chapel, which opens to a lobby, will become a community area, preserving the confessional for its historic value, while the west end will become an apartment.

As originally proposed, about half of the project was to be financed with equity from the sale of affordable housing tax credits, meaning most of the apartments would have been income-restricted.

But when the Iowa Finance Authority denied affordable tax credits a year ago, Ales reconfigured the project using a higher percentage of private equity, and, as a result, all units will be rented at market rates.

The current financing package includes private equity, conventional financing, federal historic preservation tax credits that already have been awarded and state enterprise zone status, which includes a state sales tax rebate on materials and some state income tax credits.

State historic tax credits also have been approved, and Ales is hoping to hear by March 27 that they have been reserved.

"If they run out of credits, we can apply again July 1 and, if necessary, again next spring," he said.

But Ales did not want to delay the work any longer.

"The roof is starting to show signs of wear, and before that gets out of hand, we wanted to start construction," he said.

Because the original rezoning for the project was contingent upon receiving affordable housing tax credits, when the project was reconfigured without them, it went back to square one as far as rezoning.

The city council gave its final approval Wednesday.

Cathryn Lass, a member of the area's Mitchell Bluff neighborhood group, said neighbors brought up several concerns in the rezoning process, including parking, increased traffic, lighting, noise and safety during construction.

Lass said she is "cautiously optimistic" that their concerns have been addressed, adding that the project will be an asset and continue to be a stabilizing force for the neighborhood as the nursing home was.

Boom said the "neighbors are excited. They just want to make sure everything is done properly."

"From my standpoint and the city's standpoint, we like to see properties not remain empty for a long period of time. That leads to decay and other issues."

In addition to the state historic preservation tax credits, the project is also applying for state brownfield tax credits.

Ales is optimistic about receiving those because the project meets all of the program's goals, including urban revitalization, stemming blight, preserving a historic property, serving community needs (for senior housing) and using existing infrastructure.

Tax credits help finance projects because a developer can sell the credits to an investor who wants to reduce his taxes. (The credits provide a reduction, or credit, to offset a buyer's tax liability.) The developer can then use the money from the investor to reduce the necessary mortgage financing on the project.

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