North Grand Building to be developed into residential apartments

By James Grob, jgrob@charlescitypress.com

Pending approval by the Charles City Community School District Board of Education, the historic part of the district’s North Grand Building is destined to become residential apartments.

“They would be market-rate apartments, meaning they are not set aside for low-income families or individuals. They will rent at whatever rate the market will support,” said Shawn Foutch. “People will be able to rent them with no restrictions or qualifications — other than being able to pay the rent.”

Charles City Superintendent Mike Fisher announced Monday that the district has come to an agreement with Foutch, a developer, to redevelop part of the North Grand Building into apartments.

“We are really excited about the prospect of having some really high-quality housing in our town, and restoring the building back to its grandeur,” Fisher said.

Foutch is formerly associated with Foutch Brothers LLC, which has been restoring historic buildings for the last 13-14 years. He said he concentrates specifically on restoring schools. The North Grand Building will be the 12th school building he’s restored, and the sixth or seventh in Iowa.

“We’ve found that a lot of schools in the Midwest were built about 100 years ago, and they’ve reached their useful life, and so school districts don’t know what to do with them,” Foutch said. “Our solution has been one of the very few that actually works financially and in the real world.”

These projects are designed to resonate with a wide range of people — single people, young couples, young families, empty-nesters and retired people, according to Foutch.

“The school apartments are sometimes very popular with people at retirement age,” he said. “This one in Charles City, we want to keep broad and diverse.”

Foutch estimates that he can get at least 35 apartments into the space. The units will consist primarily of one-and-two-bedroom apartments, with a few studios. They will rent at rates that are affordable to the Charles City income level.

“Not everyone believes this is possible, and not everyone wants to live in one of these kinds of apartments, but the people who do tend to really love it,” Foutch said. “That school has some amazing architectural integrity. Some of the architectural features in that school are better preserved than we ever see in other schools.”

Foutch said the apartments he designs and builds are all custom-made, and each is unique.

“They’re a lot of fun, and people will love them,” he said.

The process, Foutch said, will take about three years. It will take two years of architectural design work and engineering, and to get all the financing squared away. Once that is done, it will take a little less than a year to renovate the building.

If the school board approves of the transaction at next Monday’s meeting, the process will start this spring, and the school district would continue to manage the building while those preparations take place, until construction starts.

Fisher said, “We see this is a true win-win, in terms of getting more housing stock available, because we know the jobs are here, we know we have a very attractive school district. We just want to be a part of that of community sustainability.”

Foutch said he intends to remove and replace the entire infrastructure of the building — all the current electrical, plumbing, heating and cooling systems.

The building is listed as the “Charles City Junior-Senior High School” on the National Register of Historic Places. It was built in 1932 and first served as Charles City High School. Most recently, it was Charles City Middle School. It stopped serving as general purpose classrooms when the new middle school opened in 2016.

A previous agreement with a developer in June 2017 fell through, and the former middle school has remained district property. In October of 2018, the Board of Education authorized the administration to work with interested parties to negotiate possible terms for the sale of the property.

Fisher said the school district has been proactive, and has already approached the city to get the required rezoning done, and that this deal has been a true community effort.

“We’ve been very happy with the community partnership that’s happened,” Fisher said. “The city has been very agreeable and a wonderful partner. Planning and Zoning has been awesome, they’ve been working with our offices. We’ve actually made the rounds and talked with all the neighbors.”

Foutch was scheduled to make a presentation to the school board on Monday evening, but that meeting was cancelled due to weather. He will instead make a presentation to the board on Feb. 4, and the board will vote on the contract then.

Fisher said the district talked to more than a dozen developers, and vetted that down to three who were “very interested.” One of those wanted to develop the building for office space, and two for market-rate housing. The reason the district went with Foutch, Fisher explained, was because of his record of success.

“Past practice predicts future performance, and he has a resume of being able to be successful in this work,” Fisher said.

Fisher said that the other developers all wanted to buy the property on contingency, while Foutch was willing take the property over with no contingencies.

“Once he owns the building, we don’t have any contingency to buy it back,” Fisher said. “We have faith in him and faith in the work he does.”

Foutch said that when a building like the North Grand Building is listed on the National Register of Historic Places, a lot of funding for restoration becomes available.

“That kicks loose state and federal funding that’s available to help us restore the building,” he said.

Foutch will use state historic tax credits and federal historic tax credits in order to cover some of the costs of the project. He will acquire all of the historic part of the building, including the elevator, but not including the addition what was built in the 1970s. The school district will retain control of the 1970 wing.

“While it was attractive to completely walk away from the campus, it wasn’t in the best interest of the school district,” Fisher said. “We rely a lot on the space.”

The school will still be able to use that space for the gym, for homeschool assistance, for central services, for Iowa BIG North, and many other things, Fisher said.

“We’ve also been looking into many partnership agreements. We’ve talked to several different entities about other development of this space,” Fisher said. “Anything from flexible-use community gathering space to non-profits going in there. We’re looking into how to use that space for community sustainability.”

The building currently contains central services — which is the school district’s business office, superintendent’s office and community engagement office — among other things.

“If we were to completely abandon that building, we would quickly run out of space for our school district, because we wouldn’t be able to relocate everything that’s down there,” Fisher said.

The building’s swimming pool — not currently in use — will be retained by the school district. Fisher said the district is in the midst of doing some long-range planning regarding the pool. It’s been estimated that it would cost about $2 million to get the pool operational as a pool again.

‘We’re looking at all possibilities,” Fisher said. “We will assess the needs of the community and assess the needs of our children and try to do what’s best for the community.”

The auditorium is in the historic part of the building, and Foutch said he plans to continue to use it.

“It’s an integral part of the historic character of the building, and it’s actually a very cool theatre, so I’m really pretty happy to be able to keep that intact.” Foutch said. “Our plan is to keep the theatre, and do whatever we need to do to get its infrastructure up to stuff.

“We intend to keep it as an amenity for our tenants and a resource for the community. It’s going to stay there, and it’s going to be available for use — other than when it’s under construction — for the public and our residents.”

If the transaction is approved, Foutch will acquire the building for $1. He said the renovation will cost about $5 million, with just over $4 million of that in construction cost. He guessed that $1 million will come from state historic tax credits, $800,000 from federal historic tax credits, about $400,000 to $600,000 from grants from other sources, such as Iowa’s workforce housing program and the Iowa Department of Natural Resources.

After that, money will come from Foutch through about a $2 million dollar mortgage, and some support from the city of Charles City in the form of tax abatement or tax increment funding (TIF) in lieu of a tax abatement.

“We’ve never failed to get the financing, although some things do happen,” Foutch said. “But short of the programs I mentioned literally going away, we don’t see any substantial risk that we won’t get the money. Sometimes it just takes a little longer than we hoped.”

In the meantime, before the renovation starts, Foutch has been working with Floyd County to use parts of the former middle school building to temporarily house some county offices that might need to move when construction starts on the new county law enforcement center and updates to the county courthouse.

County Supervisor Linda Tjaden has been investigating locations in Charles City for temporary space to be used during the project that is expected to begin in May or June and be completed in late 2020.

“We have been here several times,” Tjaden said about the North Grand Building. “We have brought some of our judicial leadership here and looked over the facility, along with our Sheriff’s Department.”

Tjaden said Floyd County would look at using the North Grand Building for three temporary courtrooms, and perhaps more, if the construction at the courthouse makes it so other departments are temporarily unable to function.

“We feel very confident that we could make this work,” she said.  “We’re really happy to be able to work with Shawn on this.”

Tjaden said that nothing was set in stone yet, but this is a possible opportunity.