You
won't be alone if you doubt that David Wise can turn his plans for
a long-neglected part of downtown Moline into reality. Plenty of
other people have questioned whether he can do it.
"I had a lot of skepticism that I could pull this off," Wise said last week. "I've been hearing that I've made a believer out of some skeptics."
One of those skeptics phrased it even more forcefully.
"He made a liar out of me," said Jim Bowman, executive director of Renew Moline. "I didn't think at first that he could pull it off. ... The odds were overwhelmingly against him to succeed."
"It" is a $1.2-million, two-building renovation at the northwest corner of 13th Street and Fifth Avenue in Moline, at the downtown's western gateway. Wise is in the process of restoring the two properties - one built in 1912 and the other in the late 1800s, both vacant for several years - and turning them into street-level retail/restaurant space with five luxury apartments on the upper levels.
"They were at the end of their economic and physical lives," Wise said of the buildings, noting that he's largely gutted them but restored their exteriors based on old photographs. "There was nothing that could have been saved."
He's targeting completion in late summer or early fall, and he already has one business and one resident lined up.
The project is noteworthy for several reasons:
• While the 38-year-old Wise has restored two historic homes, he's never taken on a project of this magnitude. He's a developer without a track record and, consequently, without many financial resources. "It was hard to take him serious at first," Bowman said. "I really didn't think he could put the deal together." Added Barbara Sandberg, a member of the city's Historic Preservation Commission: "We've all kind of crossed our fingers on this one."
• Whatever questions there are about his qualifications, Wise's project was the catalyst for the creation of a downtown historic district that will give property owners access to federal historic-preservation tax credits.
• The buildings are the most visible sign that the western edge of Moline's downtown is making a comeback. The City of Moline already has a development agreement with Gemvision for a $6-million project covering properties on Fourth Avenue between 12th and 13th streets and on 12th Street. And developers Rodney Blackwell and Robert Ontiveros are planning a mixed-use project for the block bound by 11th and 12th streets and Fourth and Fifth avenues.
• Wise also has a vision for areas west, east, and south of his current project, including more luxury rentals, affordable townhomes, an urban inn, and banquet facilities.
Bowman said he thinks Wise is going to pull off his current project, although he acknowledged it's no sure thing. "He not out of the woods yet," Bowman said. "He's got to perform. ... [But] I think he'll do it."
Yet even if Wise's plans don't work out, Moline's western downtown is clearly on the upswing.
"The growth down there in the past year and a half is phenomenal," Sandberg said.
"He's Overcome Every Major Challenge"
The initial problem with Wise's project, Bowman said, was that "there wasn't a significant amount of equity." So Wise found a silent partner and is deferring his developer fee to make the numbers work. His primary financing is a $600,000 loan from BankOrion.
This type of project, Wise said, "doesn't just fit a traditional bank loan. You're going to have to be creative down here."
And even though questions remain about Wise's ability to make his project successful, the exterior improvements to his properties are evidence that he's done something that nobody else has on this block in many years. "You have to start somewhere," Wise said. "Everything starts with an idea or a vision."
"He's overcome every major challenge," Bowman said. "I really didn't think he could put the deal together."
The project financing includes $258,000 in historic-preservation tax credits and $183,000 from the City of Moline. Roughly $79,000 of the municipal money comes from the city's façade program - $60,000 of which Wise has already received.
The remaining $104,000 in city money will come in the form of rebated property taxes generated by increased value. According to Burke, a development agreement to that effect should go before the Moline City Council in the coming weeks.
Wise said the buildings generate $5,000 a year in property taxes now and will generate between $18,000 and $25,000 annually when the project is finished.
Challenges have included higher material costs than anticipated along with unexpected expenses related to termites and tuckpointing, said Patrick Burke, economic-development manager for the City of Moline.
Those
additional costs forced Wise to abandon - at least temporarily -
his dream for the southern street-level space: an eastern-European
restaurant called Cold War. The site is still being prepared with a
restaurant in mind - with, for example, a 1,000-gallon grease trap
- but Cold War will have to wait. An antique mall is presently
planned for the southern commercial space.
That, Bowman said, is a good thing. Wise "was trying to do numerous things" with the restoration, the apartments, and the restaurant, he said, and those types of developments typically fail. "Do one thing and do it well," he advised.
One thing that Wise does well is find gaps in the marketplace. His luxury apartments will feature stainless-steel appliances, for example, and range in price from $905 a month (912 square feet) to $1,125 a month (1,800 square feet over two levels, including two balconies).
Young people, he said, "want a great apartment" but mostly have cookie-cutter complexes from which to choose in the Quad Cities. Older people might want the amenities of a luxury home without maintenance or other hassles of ownership.
He looks to the west down Fifth Avenue and sees other buildings ripe for luxury apartments.
To the south he envisions roughly 20 inexpensive Victorian townhomes, each with a different façade, that he thinks will appeal to young people. He plans to sell a one-bedroom, 800-to-900-square-foot home for $70,000; a 1,200-square-foot, two-bedroom home would go for $90,000; and an 1,800-square-foot, three-bedroom home would go for $120,000.
"There's no one building in that market," Wise said. "It's a price range that's been under-served in the area. ... What I'm trying to do is create a niche that hasn't been served or attempted."
Even in the current dismal housing market, he noted, a banker told him, "If you could build in those price ranges, they would sell."
That project is an illustration of how a developer with few resources could get a major project done. Rather than paying cash for property or services, Wise explained, he might offer people an equity stake in the project. That's the arrangement he struck with an architect for an elevation drawing of the townhomes.
And by building the homes as they're sold, he said, the cost of construction is covered, and there's no unsold stock.
"He's got some grand plans," Bowman said. But "we want him to complete this first project."
"Once They're Gone, They're Gone"
The historic-district application wasn't Wise's idea, but he provided the impetus to move it forward.
Bowman had suggested that Wise apply for historic-preservation tax credits for his project, but the properties by themselves weren't eligible. If they were part of a larger historic district, however, they would be.
"It really started with David Wise's project," Burke said of the historic district, which would be the first in Moline. "It really never got off the ground before."
The city's Historic Preservation Commission had explored the idea, said member Sandberg, but thought it too expensive. "It's a major job to do," she said, and would have cost roughly $10,000 to outsource.
"The immediacy of his [Wise's] need" prompted Sandberg to take on the project on a volunteer basis last summer, she said. "That is what we feel is our oldest [intact] block, and our most blighted."
Blighted, but certainly not hopeless. Wise noted that Floorcrafters, Ray's Appliance, and Uniform Den have all survived on that block, and the Mark is only a few blocks to the north.
Would the historic district have happened without Wise's project? "I would hope so, but it certainly got us going on it," Sandberg said.
She spent more than 270 hours working on research, writing, and presentations, she said. The state signed off on the application last month, and approval by the National Parks Service is a foregone conclusion in the next few months, she said.
The district extends from 12th to 18th Street, and from Fourth to Seventh Avenue. Sandberg said the district includes 100 "contributing" structures, and 13 that were either built after 1957 or were altered too much to add to the area's historic character. Buildings labeled as "contributing" are automatically eligible for tax credits of 10 or 20 percent if renovations meet federal preservation standards. The historic district would not impose any requirements on property owners unless they apply for tax credits.
The district means that more buildings are eligible for tax credits, and it also saves the owners of historic properties work in researching and writing an individual application. "I have saved anybody and everybody a lot of work," Sandberg said.
The long-term goal, Sandberg said, is to bring people to Moline to look at its history. "People like heritage tourism," she said. A historic-district designation, she added, sends a message: "You have something that's architecturally significant, historically significant. The city cares about its downtown."
That notion was seconded by Wise, who said the two properties he's been rehabilitating hadn't had any significant investment in more than two decades. Many people, he said, thought the buildings should be demolished, but that would have destroyed downtown's oldest intact commercial block, he said.
"Once they're gone, they're gone," Wise said. "You can't replace it."
"On the Perimeter"
Wise's project is more likely to be successful because of other projects happening around it. Last year, Gemvision signed a development agreement with the City of Moline that will eventually result in all its local operations shifting from downtown Davenport to downtown Moline, to the north of Wise's buildings. Under the development agreement, Gemvision - which creates software to design jewelry and equipment to craft it - would receive nearly $900,000 in property-tax rebates for its $6-million project covering a handful of properties.
Ryan Koning, director of advertising and communications with Gemvision, said that the company moved its training center to Moline about 10 months ago, and the rest of its Quad Cities operations will follow at some point in the future as part of the development agreement. Gemvision's current headquarters are located at 706 East River Drive in Davenport.
While Gemvision looked at other sites in the Quad Cities, Koning said, Moline offered a "developed downtown that had a good mix of dining, entertainment, and accommodations. We're right on the perimeter of that." Those things are important because the company brings in people from around the world for training, he said.
Blackwell's and Ontiveros' El Mercado project is still in its formative stages, but it has the potential to connect the city's Florciente neighborhood to downtown. The $2.5 million development would include the area between Fourth and Fifth avenues and 11th and 12th streets, at the site of an old bus-transfer station.
Ontiveros said Monday that he was scheduled to meet with city officials on July 17 and didn't want to discuss the project too much. But he said the development could include a health clinic, an ethnic grocery store, and retail and dining spaces.
He called the western-downtown gateway "a tired area the city wants to develop. ... There's a lot of traffic, but people don't stop."
