Blackhawk Hotel renovation wins state historic tax credits

By Tory Brecht | Tuesday, August 19, 2008

Davenport was the big winner in a lottery held to determine which renovation projects statewide will receive state historic tax credits from the Iowa Department of Cultural Affairs.

The long-delayed Blackhawk Hotel project is first on the list for funding and is in line to receive $8.5 million in tax credits, Gordon Hendrickson, administrator of the department’s public trust division, said Tuesday.

“Assuming the work plan submitted in support of that project meets the Secretary of Interior standards, the Blackhawk Hotel project will be funded first,” he said.

The $34 million project has been held up since July 2007, when the developer’s application for $6 million in historic tax credits was not drawn from among a pool of eligible applicants.

Unlike some other state tax-credit programs, the historic tax-credit program puts all eligible projects into one pool and uses a lottery system — rather than a ranking based on merit or economic development effect — to select winners.

“We’ve been waiting and waiting and waiting,” said Amrit Gill, principal partner in Restoration St. Louis, the St. Louis-based company chosen by city officials to renovate the hotel, which has sat empty since a meth-fueled fire broke out in 2006.

Restoration St. Louis began as a small-scale, husband-and-wife operation in 1990, but it has grown to a 100-employee development team that owns and operates more than 1,000 residential apartment units. It specializes in rehabilitating historic structures, such as the 15-story Coronado Hotel, which dates to the turn of the century in St. Louis. It went from an empty shell to a thriving building featuring 64 apartments, a first-floor restaurant and patio cafe, high-end convenience store, fitness center and renovated ballroom that is used for receptions and corporate meetings.

Several things must happen before renovation work begins, however.

First, the project has to be reviewed and approved by the Secretary of the Interior, a process Hendrickson said would “take weeks, not months.” Then the city and Restoration St. Louis must sign a redevelopment agreement spelling out the financing details. Those include economic incentives such as tax-increment financing that might be forthcoming from the city. The Isle of Capri, which owns the building, has agreed to transfer ownership of the building to Restoration St. Louis within 10 days of the agreement approval.

City Administrator Craig Malin said getting the tax credits overcomes a major stumbling block.

“If it wasn’t the biggest hurdle, it was one of the high hurdles,” he said. “The success of the Blackhawk redevelopment is tied to the success of a number of other redevelopment efforts downtown, including the RiverCenter’s future. Having additional hotel rooms downtown and additional quality is critically important.”

Restoration St. Louis officials have said the company is looking at three hotel concepts. The company hired a hotel consultant, who is studying the Quad-City market to see which concept makes the most sense.

The results of that study were unavailable Tuesday.

Gill has said the general concept remains a mixed-use development with a smaller, boutique hotel, first-floor retail, a restaurant, some rental property and banquet and conference space that could complement the city-owned RiverCenter.

“Amrit and I were very excited to hear the news about the tax credit results from the state,” said Amy Gill, Amrit’s wife and partner. “Davenport is a business city, a river city and a city with residents who see an important part of their future in the buildings of their past. We are honored to be considered as a part of the Blackhawk’s revitalization and re-purposing.  We’re continuing discussions with city officials on the scope and the timing of the project.”

In addition to the Blackhawk project, the Department of Cultural Affairs also recommended $475,000 in state historic tax credits for the Forrest Block renovation project in downtown Davenport.

In 2006, developers Highland Brothers Investment announced plans to build luxury condominiums in the long-neglected and vacant row of buildings at Brady and 4th streets. However, Highland has not moved forward with plans, and it is unclear whether the awarding of tax credits will change the immediate project status.

Highland officials could not be reached for comment.

Tory Brecht can be contacted at (563) 383-2329 or tbrecht@qctimes.com.