When Build to Suit developed a downtown Bettendorf complex a decade ago, company leaders quickly recognized what a prime location they had landed.
Today, that project, River's Edge, stretches the 1700 and 1800 block of State Street and is home to Build to Suit's headquarters and a handful of offices, commercial businesses and restaurant tenants including IMEG, Fireplace Plus and Riverside Grille.
"The thought was that this was ground zero and a great location," said Kevin Koellner, then an owner of Build to Suit.
The success of River's Edge, was part of the impetus behind his next downtown project — a new four-story, mixed-use office building in the shadows of the new Interstate 74 bridge on a city block along Grant Street.
"We had 'officed' in multiple locations before we built (River's Edge)... and the feedback we had was this was the most convenient location and easiest to get to," Koellner said. "That's why we thought with the new bridge and this site, we'd be able to attract some more interest downtown in office tenants."
Site work is just beginning on the unnamed office building, where the second-to-last building was demolished last month. The building will sit in the 1500 block of the reconfigured Grant Street between Grant and the old State Street. It is directly north of The Bridges Lofts, a redevelopment project Build to Suit constructed for West Des Moines developer Frank Levy, president of Newbury Living.
The new office building will span four floors and 66,000 square feet with commercial and retail space on the ground floor and three floors of Class A office above.
The new project will be owned and developed by Focus Development, launched by Koellner and business partner Ben Logsdon. It will be built by Build to Suit, which Koellner and Logsdon sold off a year ago to a group of employees. Koellner said he now is a Build to Suit employee and handles sales while doing development projects under Focus Development.
"As soon as The Bridges took hold and we were designing it in earnest, we began to look at the block to the north and talking to the city about it," he recalled.
'Bullish on downtown'
To advance the major downtown redevelopment, Koellner said they assembled 12 parcels owned by nine property owners.
"We're bullish on downtown between the convenient location and the exposure off the bridge, it's going to be really fantastic," he said.
Jeff Reiter, Bettendorf's economic development director, said the project will add another $8 million to $10 million in new investment within the city's downtown urban renewal area.
"That's going to be an awesome corridor," he said, adding the city had unsuccessfully tried to get other Quad-City developers interested in the block.
Although the building will be operated and developed by Focus Development, Koellner said a Special Purpose Entity, known as MBGA, LLC, will hold the title and finance the project.
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In related action on Tuesday night, the Bettendorf City Council approved the transfer of two city-owned parcels in the block to MBGA.
Reiter credited Koellner with "bringing the block back to life." It was home to some "very tired" buildings including the former Bettendorf Arcade building, Ed's Appliances and a residential home. In early December, crews demolished the former Almost Home Boarding & Grooming, which was able to remain in Bettendorf by relocating to another of Koellner's new commercial projects at 826 40th Ave., between I-74 and Utica Ridge Road.
The last remaining building is C.D. Systems whose business' owners are preparing to sell their business and relocate, Koellner said, adding that it will not be demolished until late spring. "It will be in the parking lot of the project so it won't slow us down," he added.
New building's mix
Koellner said the building will be a mix of commercial and retail space on the ground floor including a small restaurant with outdoor seating as well as a bank branch and service businesses. But he added that it is too early to announce any possible tenants.
While planning the project, he said Levy of Newbury Living encouraged them to consider adding a few floors of housing in the project and even "generously offered" to provide their residents with access to The Bridges amenities.
But Koellner stressed that Focus Development is in the commercial property business. "We develop a lot of multi-residential (for clients), and we don't want to be competing with our clients," he said.
Focus Development also is behind developing much of the new retail/restaurant operations emerging at the TBK Bank Sports Complex in north Bettendorf.
Reiter said under a tax increment financing, or TIF, agreement, the city provided a 12-year rebate TIF capped at $2.85 million. He said developers estimated the cost of the site's multiple demolitions and asbestos abatements at $2.85 million.
The rebate will not be paid out until the project is completed, assessed and the first tax installment is made. "(Koellner) captures 12 years of TIF rebates or $2.85 million, whichever comes first," Reiter added.
In addition, he said Koellner agreed to pay "full freight" into the newly established downtown Self-Supporting Municipal Improvement District, or SSMID.
"He had the option not to pay the full amount based on Iowa code," Reiter said, adding "If you are in a TIF district you have the option to only pay on the assessed value today."
As part of the agreement, the city also will build a nearby public parking lot with 75 to 80 stalls that will serve the city's future urban park to be built under the bridge as well as the new office building and The Bridges. The new office building also will build its own 180-space lot along Grant Street.
Koellner estimated the building will be ready for the first tenants in the first quarter of 2021. Currently, crews are working on the building's foundation to support the steel structure.
Reiter said the latest redevelopment supports Bettendorf's plans for creating a walkable, livable downtown. "This is a huge step in our master plan," he said. "We're hopeful these are catalyst projects that will spur other growth organically."