By Cindy Hadish/Save CR Heritage

In a surprising reversal, the Cedar Rapids City Council chose a development plan that would provide downtown housing in the historic Knutson Building, rather than a Montessori magnet school that had been favored by city staff.

On a 5-2 vote, with council member Scott Olson abstaining because he serves as a consultant for the Cedar Rapids School District, the council decided today to enter into a development agreement with Hobart Historic Restoration, which plans to create 12 to 14 housing units and provide some space to support the nearby McGrath Amphitheatre in the 1887 building that sits along the riverfront.

Hobart owns the neighboring Mott Building, a building on the National Register of Historic Places, which was restored and opened earlier this year as upscale housing.

Owner Jim Hobart noted that the company has a waiting list for people searching for similar housing.

Still, city staff had recommended the city enter into an agreement with Steve Emerson of Aspect Design, who proposed a $5 million project that included a Montessori magnet school. The project hinged on the school district receiving a $12 million federal grant from the Magnet School Assistance Program.

That question, on whether or not the district would receive the grant, may have led to the proposal’s undoing.

“Is a bird in the hand better than two in the bush?” asked council member Scott Overland.

Others noted that the Knutson Building, built as a condensed milk factory and one of the oldest commercial buildings on the west side of Cedar Rapids, was in dilapidated condition and any more delays would only add to its deterioration. The two proposals were the only offers received in the third round of proposal requests. The city had thrown out earlier offers for a variety of reasons.

The $7.3 million Hobart plan requests $367,000 from the city to stabilize the building, as well as a 100 percent tax break for 10 years, while Aspect’s plan sought $500,000 for stabilization. Questions also lingered on whether or not the building would remain on the tax rolls as a school.

Council members Justin Shields, who backed the Aspect plan, and Ralph Russell, who said he wanted more time to compare the two proposals, voted against entering into a development agreement with Hobart.

Both proposals also included new additions on the now city-owned property at 525, 529 and 533 Valor Way SW.

Mayor Ron Corbett said he was swayed to vote for Hobart’s plan after listening to public comment, which included a letter presented by developer Fred Timko of the Kingston Square Association, which backed the Hobart plan.

In all, 10 people spoke in favor of one or the other proposal. Bethany Jordan, vice president of Save CR Heritage, said the group was pleased that there were two proposals, both of which would save the historic building.

Earlier this year, the Knutson Building was placed on Iowa’s most endangered building list.