An Omaha developer is breathing new life into three historic buildings in Sioux City.

J. Development plans to pump an estimated $34 million into the Commerce Building, the former Hatch Building and the former Methodist Hospital to create modern residential and commercial space. By 2020, a total of 176 units are expected to be available for lease or rent in the three structures, the Sioux City Journal reported.

The developer is using federal and state historic tax credits to help defray some of the costs associated with the renovations. In addition, the company has received funding from Iowa’s Brownfield/Grayfield program, which provides assistance for redeveloping abandoned, idled or underused commercial properties where real or perceived environmental contamination prevents productive expansion or redevelopment.

In this Friday, Feb. 8, 2019 photo, Ryan Spellman, of J. Development, gestures while standing in the fifth floor ballroom in the Commerce Building in Sioux City, Iowa. (Tim Hynds/Sioux City Journal via AP)
In this Friday, Feb. 8, 2019 photo, Ryan Spellman, of J. Development, gestures while standing in the fifth floor ballroom in the Commerce Building in Sioux City, Iowa. (Tim Hynds/Sioux City Journal via AP)

The Commerce Building, a five-story structure at 520 Nebraska St., dates to 1912, when C.F. Lytle Co. opened it as Ralph A. Bennett’s Motor Mart Building. The then-four-story building housed his auto supply company and included a 10-by-20-foot freight elevator to lift automobiles for display on the upper stories.

In 1919, the Sioux City Chamber of Commerce moved its offices to the building, which continues to be commonly known as the Commerce Building. A fifth floor was added in 1921 and housed Tom Archer’s Roof Garden. It later became a music hall and dance club called the Skylon Ballroom, where the musical performers included a young Lawrence Welk.

All the demolition in the building’s interior is complete, but J. Development principal Julie Stavneak said the remaining work has hit “a little bit of a pause” at the Commerce Building due to red tape over provisions in the historic tax credit program.

“We’re working through a few of the architectural plans with (preservation officials), and hope to begin framing walls and starting full blast on construction in about six weeks,” Stavneak said.

The Commerce Building was renovated in the 1990s as part of a project that also used historic tax credits. As a result of that work, much of the building’s interior is not original. That complicates matters, Stavneak said, because it’s hard to say which era of the building’s history federal preservation officials would most want to preserve.

“The exterior’s in great shape, as you can tell, and once we restore the windows and stuff it’ll look very close to when it was originally built,” she said. “The interior, there’ll be some things that’ll be able to remain, especially in the entryway, there’s terrazzo floors, that kind of thing. But a lot of it had already gone away.”

The new Commerce Building apartments will include the original large windows, but will be outfitted with modern amenities, she said. There will be 77 apartments, including 2-bedroom, 1-bedroom and studio units, with rents ranging from $750 to $1,000 a month.

Residents will have access to a fitness center, a community room and possibly a rooftop deck. Stavneak said the community rooms should be a big draw.

“What we’ve been noticing, a fairly strong trend, is people want to live in urban environments, they’re fine with living in smaller apartments, but they really want extra space to be a little more social, hang out with people,” she said.

The remodeling also will leave around 10,000 square feet of commercial space on the lower floors. Leasing for the business and residential space should start around spring 2020, she said.

J. Development hopes to begin building up the interior of the former Hatch Building, 413 Pierce St., within the next month or two.

Built in 1934, the building was designed by Chicago firm Graham, Anderson, Probst and White, the designers of Chicago’s Merchandise Mart and Union Station, according to the Sioux City Historical Preservation Commission. Until the early 1970s, the building was occupied by the Montgomery Ward department store.

Hatch Furniture, based in Yankton, South Dakota, opened a Sioux City location in 1985 and moved into the Pierce Street building that still bears its name in 1987. Hatch closed the downtown store in 2008 but reopened the space two years later as an outlet and clearance store. It closed the store for good in 2014.

J. Development got approval in the process of winning the historic tax credits to add another floor to the Hatch building.

“We were actually allowed to add the addition floor because, from my understanding, when the building was originally designed, they were going to add another floor, they had plans to do it, and they never did,” Stavneak said.

Overall, J. Development plans to invest roughly $6.5 million in the building, where there will be about 6,000 square feet of commercial space following the renovation. There will be about 30 apartments in the upper floors, with rents comparable to those in the Commerce Building.

Last month, J. Development signed a purchase agreement for the old Methodist Hospital, which will be transformed into roughly 69 market-rate apartments.

The 1924 hospital became a part of UnityPoint Health — St. Luke’s campus when the former Methodist and Lutheran hospitals merged in 1966 to form St. Luke’s. The hospital served as a maternity ward until 1979 when St. Luke’s moved its birthing unit to the current hospital on Pierce Street.

In later years, the former Methodist hospital housed Meals on Wheels, hospital business offices and the county morgue. The hospital closed the aging building, the oldest structure on its campus, in September 2005. It has remained empty since then.

“We are working through schematic design, and how many units we can fit in it, and all of that,” Stavneak said. “I anticipate that hopefully late fall to early winter is when we’ll start construction on that.”

The developer plans to use historic tax credits on the hospital building as well. They plan to preserve certain features of the 95-year-old building, including its hallways and perhaps some features like doors; but they also hope to redesign the interior sufficiently that residents will feel comfortable living in a former hospital and morgue.

“We’ll do the best that we can from one perspective, because it’s a really cool building,” she said. “But at the same token, we’ll want to make sure it doesn’t feel like a hospital.”

The developer plans to offer a community room and “potentially even a deck” at the hospital building, Stavneak said.

It’s a little early to say exactly what the apartments will be like, though Stavneak suggested there may be more 1-bedroom and studio apartments due to the building’s layout. Rents will be comparable to Commerce Building apartments, or possibly a little higher.

“If all things go as planned and we’re able to start this fall, I would say a year” until leases can be signed, she said. “So, late 2020.”


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