A year after the city of Newton approved the purchase of the former Hotel Maytag to stabilize the building and begin work on finding a redeveloper, it has a new owner. Hotel Maytag Investors, LLC, headed by Hatch Development Group, was approved to purchase the building at 105 N. Second Ave. E. for $400,000 at Monday’s city council meeting.
“We’re pretty thrilled with the work that the city has done and the architects. Now we’re just going to get the final loans from a variety of sources, and we’re actually going to be choosing our contractor Tuesday,” Jack Hatch said. “We’re moving ahead in a pretty speedy way, and we hope to be in there by the first of January or February at the latest.”
Hatch was selected from a group of bidders during they city’s search for a redevelopment partner earlier this year. The group proposed a complete renovation with 22 market-rate apartments, 23 units designated as affordable for households at or below 60 percent of the median income for Jasper County, a variety of commercial spaces and the restoration of the ballroom on the second floor.
“I am just really pleased to be here in Newton,” Hatch said. “This has a history of real leadership, and it continues today. The council is really a pleasure to work with. They are more than just content. They said it today, this is a cornerstone of the block, it will help revitalize the downtown and will bring back some of the old stories that we hear from everybody about the ballroom, their parents and grandparents. That building means a lot to people.”
The construction costs are estimated at a minimum of $10 million with the overall project costs at approximately $12 million. All renovations will adhere to historical standards as set out by the state of Iowa and federal government.
Also in the purchase agreement is an economic development grant and property tax rebates for the development group. The agreement will provide $2.75 million in economic development grants from the North Central Urban Renewal Area in the form of TIF funding. The first two installments of $250,000 and $500,000 will be reduced by $190,000 and $400,000 each because of an architectural fee reimbursement and the actual payment for the property. The first installment will be paid upon approval of the agreement for private development and the second is paid following the acquisition of the property from the city.
The third part of the grant, $950,000, will be released at the closing of the construction loan and an entrance of a 4 percent low-income housing tax credit investor into the project along with securing the building permits for the project. A fourth installment of $625,000 will be paid after the issuance of the certificate of occupancy for all components of the fully completed renovation and the final payment of $425,000 will go out upon stabilization of the project, shown by the building having at least a 90 percent occupancy rate for the residential units.
Property tax incentives, in the form of annual appropriation incremental property tax payments, will also be given to the project in an amount not to exceed $360,000 during the next 15 years. According to city administrator Matt Muckler, outside of the taxes on the growth of the tax base within the downtown business district, no property taxes will be increased to fund the project.
“I did support the city taking ownership of the building because it needed a responsible owner,” councilwoman Evelyn George said. “Now, we’ve got a group that not only is responsible but treasures this building and its history very much like the citizens. With this plan, we will have a ballroom that is available for events for the community, we will have a theater, retail space and restaurants that are upgraded from where they are now. We will have mixed income apartments in the downtown and the exterior is going to look wonderful. I think this is going to serve our citizens really well and it is going to bring people from miles around to see this treasure in our downtown.”
Also approved was the sale of the city of property at 114 N. Second Ave. E, north of the building. The empty lot, which sold for $1, is proposed to be used as a parking lot for the Hotel Maytag property.
Contact Jamee A. Pierson at 641-792-3121 ext. 6534 or firstname.lastname@example.org