By Cindy Hadish/Save CR Heritage

CEDAR RAPIDS – The City Council rejected bids tonight to redevelop one of the city’s oldest riverfront commercial structures, but will give the building one last chance, while its neighbor is on the road to receiving a $1.2 million tax exemption.

Two bids were submitted for the Knutson Building, at 525 Valor Way SW, but neither proposal met the city’s costly requirement for relocating or elevating the structure.

Meanwhile, the council approved the first reading for a 10-year, 100 percent property tax exemption on the increased assessed value for the Mott Building, next door at 42 Seventh Ave. SW.

Hobart Historic Restoration plans to include 16 market-rate rental housing units and commercial space in the $4.6 million Mott Building project.

The increased assessed value for the 24,720-square-foot facility is estimated at $3.2 million, which would generate an additional $123,989 in property tax revenue annually. Over a 10-year period, $1.2 million would be deferred as tax-exempt.

Prospects are not as bright for the Knutson Building.

Built in 1887, the structure withstood the 2008 flood next to the Cedar River, but little work has been performed on the building in the past six years.

The city purchased the Knutson Metal Co. property in 2012 for $1.5 million, far more than its assessed value of $98,891, according to the City Assessor’s website.

At the time, City Council members cited the owner closing his scrap metal business as part of that expense and the city also wanted to assist with cleanup of the area adjacent to the newly constructed amphitheatre.

Sharon Cummins, who oversees the McGrath Amphitheatre in her role with VenuWorks, told the City Council that the Knutson site is critical for staging of trucks and busses for shows at the riverside amphitheatre.

Cummins did not indicate whether or not the building itself could offer a synergy with the city-owned amphitheatre.

Some council members think a future chapter exists for the Knutson Building, which originally served as a condensed milk factory and has also housed a woodworking plant for gunstocks, the Warehouse bar, and a haunted house as well as the scrap metal business.

“I’m very interested in saving this building,” council member Monica Vernon said. “It’s a huge part of this city and of the west side.”

Vernon cited economic development trends in repurposing older buildings.

“We know people are drawn to things that are authentic,” she said. “I think that’s what we’re trying to create and recreate here.”

Council member Justin Shields disagreed.

“That building is in terrible shape,” said Shields, the only council member present to vote against reopening the bid process. “I’m not willing to spend more time on it.”

During a walk-through for developers last summer, water coated the basement floor; a tree was growing from the rooftop on the riverfront side; garbage was strewn throughout and a broken window allowed entry for animals, vandals or both.

City officials have said nothing was done to improve the building after the city purchased the site.

The Knutson Building draws a sharp contrast with the Mott Building, which was owned by Linn County before being sold to Hobart Historic Restoration for $500,000.

Built in 1900 as Iowa Wind Mill & Pump Co., the three-story brick Mott Building was cleaned out after it took on 3 to 4 feet of flooding on the main level in 2008, and then Linn County, which purchased the property in 1995 for $390,000, had the building placed on the National Register of Historic Places.

Hobart Historic was one of the bidders on the Knutson Building, but requested $1.6 million in city assistance to move the building, which the council rejected as cost-prohibitive.

The other bidder, KHB Redevelopment Group, proposed renovating the building in place and constructing a hybrid levee with a permanent floodwall on top.

That proposal included $960,000 in requested assistance from the city: $710,000 from the budgeted amount for the original levee construction and $250,000 in the estimated avoided cost in demolishing the building.

Community Development Director Jennifer Pratt suggested both bids be rejected, as the city hadn’t included that type of hybrid levee in its request for proposals.

All but Shields agreed to reopen the bid process, with another opportunity for developers to see the property. New proposals would be due April 13.

Council member Pat Shey questioned why elevating or moving the building was required in the first round of bids.

Pratt said she was not aware of any regulations that necessitated that requirement.

“I want to question this assumption that the building has to be protected from a flood,” Shey said. “The building’s been there 115 years. I imagine it’s been flooded a number of times.”

Shey suggested that the flood mitigation be left to the future developer.

“If it’s not required, why don’t we just let the market determine that question,” he said. “The assumption was that we had to protect it somehow, and I’m not convinced that we do.”