Battery Building plans on hold
By Dave Dreeszen, Journal business editor | Posted: Sunday, September 21, 2008
SIOUX CITY -- Remember these promises?
-- $10.5 million in capital investment.
-- 50 loft-style condominiums.
-- 13,000 square feet of Class A office space.
-- 6,000 square feet for an upscale restaurant.
In an exclusive Sioux City Journal story on April 1, 2007, an Omaha-based development group announced plans to transform the historic Battery Building into a mix of modern commercial and residential space.
Eighteen months later, the century-old warehouse at 323 Water St., known for its signature six-story clocktower, remains empty. No significant construction has taken place, either inside or outside.
A legal dispute between the building's owners and the developers has temporarily, if not permanently, derailed the high-profile project, which local leaders hailed as a cornerstone of the redevelopment of downtown's West End district.
"We're hoping that the partnership can resolve their differences and the clocktower project can go on as originally conceived." Roger Caudron, executive director of Downtown Partners, said in an interview Wednesday. "We don't believe it will necessarily hinder the West End development as a whole. Certainly, as the largest structure on the west end, it certainly would be good to have it as the anchor."
Tax increment financing
The city, which pledged $735,000 in tax increment financing to help fund the restoration, and to vacate portions of two streets to provide more parking, now is re-evaluating its deal with the developers, city economic development director Marty Dougherty said Wednesday.
"We've kept open the city's willingness to move forward with the development, but in recognition of the circumstances, as they are today, we are reviewing that agreement. and may bring something to the city council before long," Dougherty said.
Dougherty said no city funds have been delivered to the developers, and the city also has delayed deeding the requested public right-of-way. U
The Battery Building, built in 1906. is the former corporate offices and central warehouse for Bomgaars, a regional farm and home retail chain headed by Roger and Jane Bomgaars. Roger Bomgaars' grandfather purchased the four-story building for $35,000 in 1973. After that, the Romanesque revival-styled warehouse, which served as a battery factory during the 1940s and '50s, continued to be known as the Battery Building.
In early 2007, Roger and Jane Bomgaars entered into a partnership with Jim and Jane Hamlin, principals in the Hamlin Group, an Omaha-based real estate and development firm, to redevelop the Battery, which was renamed the Clocktower on Water Street.
The project was a coming home of sorts for Jim Hamlin, who grew up in South Sioux City, attended Morningside College and previously worked at Dakota County State Bank in South Sioux City. In 1985, he left Siouxland for a commercial real estate lending position in Omaha.
Since 1998, he has worked in real estate development. According to a news release in 2007, his firm has developed projects valued at more than $71 million, including the historic renovation of two properties in Bartlesville, Okla.
The Hamlin Group and Third Generation Investments, an Iowa corporation controlled by Roger and Jane Bomgaars, formed a new limited liability corporation called Clocktower Development. In splashy public presentations in April and May of 2007, the partners detailed plans for the Clocktower on Water Street, billed as downtown's first upscale condominiums.
But project delays followed over the next several months. Some prospective condo buyers were put on a waiting list, but floor plans were never shown, Caudron said.
In May, the Hamlin Group sued Third Generation and the Bomgaarses in federal court, accusing the defendants of reneging on a contractual obligation to transfer ownership of the Battery Building to Clocktower Development.
The Hamlin Group asks the court to award unspecified damages, including the loss of fees and other funds expended on the project, loss of tax credits, and the loss of its "interest in reasonable expected profits from the development," according to the petition filed in the Northern District of Iowa's U.S. District Court.
In its response to the suit, the Bomgaarses and Third Generation denied the charges, asserting they had agreed to transfer ownership of the building only after the Hamlin Group had obtained a "binding commitment of adequate financing for the project"
According to the Bomgaars' petition, the Hamlin Group on Sept. 25, 2007 advised it had been unable to secure the financing, and reported, "We are still confused as to the local bank's unwillingness to back this project..."
"The parties are now deadlocked as to whether this project can proceed in the absence of a commitment for financing that has never been obtained," according to the countersuit by Roger and Jane Bomgaars and Third Generation.
In a countersuit, Third Generation and the Bomgaarses asks the court to dissolve Clocktower Development, and appoint Third Generation to "oversee the orderly winding up" of the partnership. In the petition, they also contend terms of the operating agreement of Clocktower Development bars the Hamlin Group from recouping expenses or losses from Third Generation or the Bomgaarses personally.
A hearing date has not been set for the suit or countersuit.
Roger Bomgaars did not return calls last week to the Journal. The Journal called the listed number for the Hamlin Group in Omaha, but received a message saying the number was not in service. Hamlin's attorney, Raymond Abrams of Omaha also did not return a call. The attorney for Bomgaars and Third Generation, Chuck Corbett of Sioux City, declined to comment after being contacted.
Under the development agreement approved and later amended by the city council in 2007, Clocktower Development would receive $735,000 in Tax Increment Financing, in installments staged over a period of months. In return, the development group agreed to a minimum tax assessment that eventually would total $12.3 million, with the increased property tax revenue going to repay the city's investment.
The first payment to Clocktower Development had been scheduled for Sept. 1, Dougherty said. But the group did not request the money, and even if they had, the money would have been withheld because the development had not passed the first in a series of deadlines for measuring progress, he said. The next deadline is scheduled in January, he said.
While the Battery restoration appears to be on hold indefinitely, Dougherty said he doesn't expect that to jeopardize other redevelopment opportunities in downtown's West End district. The city economic development director said his office is working on two other commercial projects in the vicinity of the Battery.
"We think the future's very bright for the west end and all of downtown," he said.
-- $10.5 million in capital investment.
-- 50 loft-style condominiums.
-- 13,000 square feet of Class A office space.
-- 6,000 square feet for an upscale restaurant.
In an exclusive Sioux City Journal story on April 1, 2007, an Omaha-based development group announced plans to transform the historic Battery Building into a mix of modern commercial and residential space.
Eighteen months later, the century-old warehouse at 323 Water St., known for its signature six-story clocktower, remains empty. No significant construction has taken place, either inside or outside.
A legal dispute between the building's owners and the developers has temporarily, if not permanently, derailed the high-profile project, which local leaders hailed as a cornerstone of the redevelopment of downtown's West End district.
"We're hoping that the partnership can resolve their differences and the clocktower project can go on as originally conceived." Roger Caudron, executive director of Downtown Partners, said in an interview Wednesday. "We don't believe it will necessarily hinder the West End development as a whole. Certainly, as the largest structure on the west end, it certainly would be good to have it as the anchor."
Tax increment financing
The city, which pledged $735,000 in tax increment financing to help fund the restoration, and to vacate portions of two streets to provide more parking, now is re-evaluating its deal with the developers, city economic development director Marty Dougherty said Wednesday.
"We've kept open the city's willingness to move forward with the development, but in recognition of the circumstances, as they are today, we are reviewing that agreement. and may bring something to the city council before long," Dougherty said.
Dougherty said no city funds have been delivered to the developers, and the city also has delayed deeding the requested public right-of-way. U
The Battery Building, built in 1906. is the former corporate offices and central warehouse for Bomgaars, a regional farm and home retail chain headed by Roger and Jane Bomgaars. Roger Bomgaars' grandfather purchased the four-story building for $35,000 in 1973. After that, the Romanesque revival-styled warehouse, which served as a battery factory during the 1940s and '50s, continued to be known as the Battery Building.
In early 2007, Roger and Jane Bomgaars entered into a partnership with Jim and Jane Hamlin, principals in the Hamlin Group, an Omaha-based real estate and development firm, to redevelop the Battery, which was renamed the Clocktower on Water Street.
The project was a coming home of sorts for Jim Hamlin, who grew up in South Sioux City, attended Morningside College and previously worked at Dakota County State Bank in South Sioux City. In 1985, he left Siouxland for a commercial real estate lending position in Omaha.
Since 1998, he has worked in real estate development. According to a news release in 2007, his firm has developed projects valued at more than $71 million, including the historic renovation of two properties in Bartlesville, Okla.
The Hamlin Group and Third Generation Investments, an Iowa corporation controlled by Roger and Jane Bomgaars, formed a new limited liability corporation called Clocktower Development. In splashy public presentations in April and May of 2007, the partners detailed plans for the Clocktower on Water Street, billed as downtown's first upscale condominiums.
But project delays followed over the next several months. Some prospective condo buyers were put on a waiting list, but floor plans were never shown, Caudron said.
In May, the Hamlin Group sued Third Generation and the Bomgaarses in federal court, accusing the defendants of reneging on a contractual obligation to transfer ownership of the Battery Building to Clocktower Development.
The Hamlin Group asks the court to award unspecified damages, including the loss of fees and other funds expended on the project, loss of tax credits, and the loss of its "interest in reasonable expected profits from the development," according to the petition filed in the Northern District of Iowa's U.S. District Court.
In its response to the suit, the Bomgaarses and Third Generation denied the charges, asserting they had agreed to transfer ownership of the building only after the Hamlin Group had obtained a "binding commitment of adequate financing for the project"
According to the Bomgaars' petition, the Hamlin Group on Sept. 25, 2007 advised it had been unable to secure the financing, and reported, "We are still confused as to the local bank's unwillingness to back this project..."
"The parties are now deadlocked as to whether this project can proceed in the absence of a commitment for financing that has never been obtained," according to the countersuit by Roger and Jane Bomgaars and Third Generation.
In a countersuit, Third Generation and the Bomgaarses asks the court to dissolve Clocktower Development, and appoint Third Generation to "oversee the orderly winding up" of the partnership. In the petition, they also contend terms of the operating agreement of Clocktower Development bars the Hamlin Group from recouping expenses or losses from Third Generation or the Bomgaarses personally.
A hearing date has not been set for the suit or countersuit.
Roger Bomgaars did not return calls last week to the Journal. The Journal called the listed number for the Hamlin Group in Omaha, but received a message saying the number was not in service. Hamlin's attorney, Raymond Abrams of Omaha also did not return a call. The attorney for Bomgaars and Third Generation, Chuck Corbett of Sioux City, declined to comment after being contacted.
Under the development agreement approved and later amended by the city council in 2007, Clocktower Development would receive $735,000 in Tax Increment Financing, in installments staged over a period of months. In return, the development group agreed to a minimum tax assessment that eventually would total $12.3 million, with the increased property tax revenue going to repay the city's investment.
The first payment to Clocktower Development had been scheduled for Sept. 1, Dougherty said. But the group did not request the money, and even if they had, the money would have been withheld because the development had not passed the first in a series of deadlines for measuring progress, he said. The next deadline is scheduled in January, he said.
While the Battery restoration appears to be on hold indefinitely, Dougherty said he doesn't expect that to jeopardize other redevelopment opportunities in downtown's West End district. The city economic development director said his office is working on two other commercial projects in the vicinity of the Battery.
"We think the future's very bright for the west end and all of downtown," he said.
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Jane in Texas wrote on Sep 21, 2008 12:11 PM: