It’s impossible to ignore the industrial history of the apartments in the Crescent Macaroni & Cracker Company and the Waterloo Mills buildings, on the east side of Iowa Street between Fourth and Fifth streets near downtown Davenport. The dominant aesthetic is exposed concrete – in walls, ceilings, and pillars. Once-functional parts – from garage doors to what look like pulley wheels – have been retained as decorative touches. Duct- and brickwork has also been left exposed, and many units feature lofts and striking high ceilings.
These are the Davenport Lofts, and they represent the first large-scale effort to add to the residential character of the city’s downtown in years. If the developer follows through with its plan for three or four phases of housing, it could represent the addition of several hundred new households to downtown Davenport.
“We’re just getting started,” said David Vos, project manager for Madison, Wisconsin-based Alexander Company.
An Urban Neighborhood
Following the lead of developers in Rock Island – where numerous older buildings have been converted into condominiums and mixed-income apartments – Alexander Company has turned the pair of old factories near downtown Davenport into 73 one- and two-bedroom apartments, with 33 different floor plans. More than 70 percent of the apartments are reserved for low- and moderate-income households.
All 14 units in the Waterloo Mills building – a former railroad stop and textile mill – are currently ready for occupancy, and apartments in the Crescent Macaroni structure – which features river views on the fourth and fifth floors and a rooftop deck – are getting their finishing touches. Alexander anticipates full occupancy of the Davenport Lofts this summer.
And that’s just the first phase of an ambitious revitalization plan for the area just east of the downtown business district. Alexander has applied for housing tax credits and a city loan for the second phase, buildings at 320 and 324 East Fourth Street – where the Scorpion’s Den and Cave Auto are presently located – that would have a total of 53 units. Vos said roughly 70 percent of those apartments will also be set aside for low- and moderate-income renters. Alexander plans to break ground on that phase this summer, with occupancy in 2006.
A third phase, tentatively slated for occupancy in 2007, might include the Firestone building across Iowa Street to the west of the current Davenport Lofts, and a small property at 315 East Fifth Street. The company has also targeted a number of properties that might be part of a fourth phase, although it doesn’t own any of them yet, Vos said.
“We’re really focusing on this area,” Vos said. “Our plan is to get this real nice urban neighborhood.” The ultimate goal, he said, is for 200 total housing units.
The second phase is critical, Vos said. “It really ties it [the development] into the downtown business district,” he said.
The Alexander approach in Davenport is different from the tack across the river, where Rock Island Economic Growth Corporation and other developers have primarily worked to put new housing into a downtown area that was already doing well, with myriad arts-and-entertainment establishments. In Davenport, Alexander is taking a dilapidated, marginal part of the central city and trying to jump-start downtown from the east.
“We’re looking to create a second re-development area” in addition to the city’s Vision Iowa projects, Vos said. “People are going to naturally want to do their re-development between what we’re doing and what the city’s doing.”
“I think it’s a spark,” said Bruce Berger, housing-rehabilitation program manager for the City of Davenport, which contributed $1.3 million in low-interest loans to the Davenport Lofts project. “Downtowns need bodies to bring back the marketplace.”
There are similarities between the two cities. Rock Island Economic Growth started with 52 housing units in the Goldman and Renaissance buildings in 2001 and has expanded the effort from there. And a majority of apartments in both the Rock Island and Davenport projects are reserved for low- and moderate-income households.
“There Is a Lot of Risk”
Alexander isn’t just addressing a shortage of downtown housing; it’s making a significant contribution to the community’s affordable housing.
Of the 73 apartments, only 21 are market-rate. The remaining units have lower rents because of low-income housing tax credits, which reduce project costs and therefore allow developers to offer affordable rents.
Five apartments are available to people making 50 percent or less of the area’s median income, meaning that a one-person household with an income of up to $19,650 could rent a one-bedroom apartment for $386 a month. A four-person household could make up to $28,100 and would pay $476 a month in rent.
That leaves 47 apartments reserved for households earning 60 percent or less of the median area income. One-bedroom apartments in this category start at $540 a month, while two-bedroom units start at $650. Maximum incomes range from $23,580 for a single person to $33,720 for a family of four.
“Just about anybody can get in” and afford one of the tax-credit apartments, said Lisa Stang, residential property manager for the Davenport Lofts. Rent includes water, sewer, garbage, and gas-heat services.
Market-rate rents range from $687 to $795 (for a one-bedroom unit) and $904 to $1,060 (two bedrooms).
Early rentals suggest that the market rate apartments will be in short supply. Of the nine leases signed by the morning of January 17, roughly half were for market-rate rents, Stang said. If that trend holds, Vos said, the third phase of the Alexander project would probably have a higher percentage of market-rate apartments.
There’s already diversity in the tenants. Among the nine leased units, Stang said, six are single people in their 30s or younger, one is a couple in their 40s, and two are in the 55- to 65-year-old range. One unit is already occupied, and two tenants are planning to move in this weekend, Stang said.
Alexander used a variety of financing tools for the $11.8-million project, Vos said. Low-income housing tax credits accounted for $6.5 million, $2 million came from tax credits for rehabilitating historic structures, and $1.3 million came from the City of Davenport in the form of low-interest loans from the HOME and Community Development Block Grant programs. That left only $2 million that Alexander Company had to finance conventionally.
“There is a lot of risk in these projects,” Vos said. Although Alexander only needed to come up with a small portion of the project cost on its own, the tax-credit programs – to prevent fraud – come with many strings attached. For investors to get their tax credits, the project needs to meet certain performance standards, such as being fully leased by a certain date or coming in on-budget. If those conditions aren’t met, Alexander owes money to the tax-credit investors. “We basically have to guarantee that they’re going to get their tax credits,” Vos said.
Alexander specializes in urban infill development, typically focusing on mixed-use projects. For the most part, Vos said, the company is attracted to sites with ample parking, under-utilized buildings, motivated sellers, and the size to support a large development.
Many times, the properties Alexander rehabilitates are in poor condition. The Crescent Macaroni building, for example, “was dropping concrete on the sidewalk,” a project summary notes. “Packed with lead-based paint and asbestos, it was also sorely in need of hazardous-materials abatement.”
While many Alexander projects are in its home state of Wisconsin, the Vision Iowa program and a revitalized Iowa Finance Authority attracted it to Iowa. When the company was exploring projects in the state, Vos said, “I started looking at the cities that had received grants.” In Davenport, he added, “there was enough critical mass to create a neighborhood.”