Parking and tax abatement big issues for city to ponder for proposed North Grand apartments

By Kelly Terpstra, kterpstra@charlescitypress.com

Shawn Foutch has transformed many historic school buildings into livable dwellings across Iowa.

Foutch, a Johnston developer and owner of JMAE LLC, presented a plan Monday to the Charles City Council to do that again — with the city’s help.

His potential $4 million construction project for the 500 North Grand Building — to turn the 1930s portion of the old middle school into market-rate apartments — has been before the Charles City school board already, but this was his first time in front of the City Council.

“They work really well, but they’re not very easy,” Foutch said about his renovation projects. “A big part of that is that they require creativity. I have to do unusual things to a school to make it into an apartment building.”

The two biggest issues in order for the project to move forward on the city’s end are parking requirements and Foutch’s request for a 10-year, 100-percent property tax abatement.

“In a lot of ways, this building has been a focal point of the community for several years, and how to deal with it,” said City Administrator Steve Diers. “It’s a unique project.”

In addition to historic tax credits, other forms of funding for Foutch’s business in order to complete construction could come from TIF funding or a combination of that TIF rebate and a partial tax abatement.

“It’s a different ball game when you have these existing structures that it costs more to take it down than it does to do anything with it. They don’t cash flow,” said Diers. “As we’ve seen with our housing projects in town, they take a little extra reach to make these things work.”

Foutch is currently in discussion with the Charles City School District to acquire the building for $1. In order to move forward with design work and engineering on the project, he’ll need the consent of the council in order to meet his demands for the project.

“We’re pretty close on our agreements and we’re aiming for being able to transact on the property within the next two months,” said Foutch, about ongoing discussions with the CCSD.

A similar project completed by Foutch’s firm on an Algona school building received a 15-year, 100-percent tax abatement.

“Not every community I come to is 100 percent comfortable with that,” he said.

Foutch is also in the process of renovating a school building in Fort Dodge and turning that property into apartments.

Foutch plans on creating 40 apartments in the North Grand Building. Charles City code requires that 2.2 parking spots be created outside the building for every apartment. That would mean Foutch would have to find room and construct 88 parking stalls.

He referenced the Institute of Traffic Engineers as saying that 1.5 is more in line with everyday use. Foutch is proposing 60 stalls.

“We’ve done a bunch of these schools so we know how many people park in our lot,” Foutch said. “I have to have a little bit of creativity about how I solve parking problems when I’m stuffing them into a neighborhood that’s already developed, wrapped around a school.”

In order for Foutch’s parking number to be reached, the city would have to amend its parking ordinance. The city would also need to decide if angle or head-in parking could be achieved on 5th Avenue, south of the building.

Foutch said there could also be 46 parking stalls possibly squeezed into existing parking space on the property.

“Let’s face it,” said Diers. “This is a big community project issue that’s been sitting out there for years. We want to do something that’s equitable and fair and gets the job done. The council is generally open to discussing possibilities. Nobody was overtly opposed to the project or the idea.”

Diers was confident that some form of agreement could be reached, but it may take some time.

Asked whether two months would be enough time for the city to work out a plan that Foutch and his company would agree to and Diers wasn’t as confident.

“That’s moving pretty fast for the city if we’re going to have something legally put in place. That’s incredibly fast,” said Diers.

The North Grand 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.

In other City Council business Monday, Heidi Nielson, director of public housing, presented a project that would install replacement exterior door knobs and deadbolts at the North and South Cedar Apartments.

Low bid for the project was $16,847.58 by Strauss Security Solutions of Urbandale.

Diers also discussed 27 nuisance properties that the city is looking into. The city has $90,000 budgeted over the next two fiscal years to deal with the buildings.

The council also said it is looking into how the city conducts its rental inspections.