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Downtown renovations
Hatch Building, Commerce Building, old Methodist Hospital may start renting apts in 2020

SIOUX CITY -- 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 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.

Photos: J. Development's Sioux City renovation projects

Here is a look at each building.

Commerce Building

The five-story building 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 structure 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 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. 

Tim Hynds, Sioux City Journal 

Light streaming through Palladian windows illuminate a portion of the 9,000-square-foot dance floor in the fifth-floor ballroom in the Commerce Building at 520 Nebraska St. The renovation of the building into apartments and commercial space is part of Omaha developer J. Development's plans to renovate the Commerce, the former Hatch Furniture and former Methodist Hospital buildings into mixed-use properties.

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.

Hatch Building

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.

Methodist Hospital

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." 

Tim Hynds, Sioux City Journal 

Ryan Spellman of J. Development stands in a portion of the fifth floor ballroom in the Commerce Building, 520 Nebraska St. The renovation of the building into apartments and commercial space is part of Omaha/Council Bluffs-based developer J. Development's plans to renovate the Commerce, Hatch Furniture and former Methodist Hospital buildings into mixed-use properties. 

Needle-sharing program pushed as HIV outbreak prevention measure

DES MOINES --- New state laws may be helping to drive down opioid-related deaths in Iowa, but another public health threat looms, and one key state lawmaker is trying to help head it off.

Iowa is at risk for an HIV outbreak, according to state and federal health data indicators.

And one way to prevent such an outbreak, health care experts and advocates say, is to create a state program that offers free syringes to intravenous drug users.

Such programs are often called needle-sharing, and 37 states have them. Iowa does not.

Brad Zaun, a Republican Iowa Senator from the Des Moines suburb of Urbandale, has for the second consecutive year introduced legislation that would create a needle-sharing program in Iowa.

“We’re talking about the spread of disease,” Zaun said. “There’s certainly been other states that have done this and it has significantly decreased the spread of disease. So I’m on the policy side of this. Of course, it takes money as well.”

The state public health department recently published a report that said preliminary 2018 data indicates opioid-related deaths are falling in Iowa after more than tripling between 2005 and 2017.

The department said recently added state laws may be helping. Among other steps taken, the state in recent years has expanded the availability of naloxone, which is used to counter an opioid overdose, and required physicians and pharmacists to use a state database for opioid prescriptions in order to prevent individuals from collecting opioid painkillers from multiple providers.

“We’re very excited by the positive changes we’ve seen occur in the state, but (the state public health department) can’t take all of the credit. These changes would not have been possible if it were not for the dedicated providers, communities and coalitions that recognized a need and made change happen,” DeAnn Decker, with the state public health department, said in a news release.

But with one public health issue seemingly on the mend, Zaun and advocates are turning their focus to possible ways to help prevent another, which may be related.

The state public health department in 2017 determined Iowa is at risk for an HIV outbreak related to injection drug use. The concern stems from a significant increase in hepatitis infections observed in individuals who use injection drugs, including opioids and methamphetamine.

After a one-year dip in 2017, hepatitis C diagnoses among Iowans under 40 years of age increased again in 2018, continuing a long-term trend of increases.

Randy Mayer, who leads the state public health department’s HIV and hepatitis bureau, said he uses the under-40 numbers because they are the most likely to be current drug users and to have been recently infected.

Needle-sharing programs are designed to help prevent the spread of HIV and hepatitis C by curtailing the spread of those diseases through the use of infected syringes.

The federal Centers for Disease Control says needle-sharing programs are an effective component of a comprehensive approach to HIV and hepatitis C prevention among injection drug users.

Under a typical needle-sharing program, injection drug users are able to dispose of old syringes and acquire new ones without threat of being arrested. They also interact with health care staff who are able to refer an individual to substance abuse treatment, test for HIV or hepatitis C, and help individuals look for housing or employment information.

“The idea is to provide health services to people who are using drugs and work with them on getting them into treatment for their substance use disorder,” Mayer said. “In the meantime they might not be ready for treatment. But we can keep them from getting HIV and hepatitis C, and we can immunize them from hepatitis B and refer them to services. ... So you’re building a rapport with people who you are hoping are at some point are going to utilize drug treatment services.

The state public health department is not advocating in support or opposition to Zaun’s proposal, but the department in 2017 requested the federal government declare the state in need of needle-sharing programs to help prevent a potential HIV outbreak.

“We feel like the data supports the use of syringe services (needle-sharing) programs in the state,” Mayer said.

Tiffany Carter, policy and engagement coordinator for the nonprofit advocacy group Iowa Harm Reduction, said participants in needle-sharing programs are five times more likely than the average injection drug user to enter a treatment program and 3.5 times more likely to stop using drugs altogether.

“So if the goal for folks who are concerned about whether or not it’s enabling drug use, if their goal is drug abstinence, the results are there. The evidence is there,” Carter said. “(A state needle-sharing program) would cause drastic reductions in our hepatitis C and HIV rates in the state. ... Providing sterile injection equipment (and) teaching folks how to prevent disease transmission by not sharing their equipment is really a great solution to that problem.”

Officials did not have an estimate as to how much a new state needle-sharing program would cost. Mayer said there are federal funds available that the state could dedicate to a needle-sharing program, but that the state likely would have to set aside some funding to get the program going.

Taxpayer funding cannot be used to purchase syringes, however. Carter said there are nonprofit organizations like Elton John’s AIDS Foundation that offer grants to needle-sharing programs.

Concerns with needle-sharing programs largely center on the perception that they are enabling drug use by giving free, clean syringes to users.

The only lobbying organization registered in opposition to Zaun’s bill is the Iowa Police Chiefs Association.

“Which is a fair question to ask yourself if you’re not a person who supports drug use. But in reality the results and the evidence is there to say that it doesn’t. It does not enable people to use drugs,” Carter said.

Said Zaun, “Some people say that I’m promoting drug use and that is the last thing that I want to do.” He said curtailing the spread of diseases among injection drug users can save costs for hospitals and state taxpayers.

Zaun and Carter said they are hopeful the proposal advance through the Iowa Legislature --- after failing last year --- and reach Gov. Kim Reynolds’ desk.

Zaun said he considers the education aspect of needle-sharing programs similar to the early resistance to the state’s medical cannabis program.

“It’s all about education,” Zaun said. “Certainly opinions turn. I think it’s worthy to continue the conversation.”

Amy Hynds / Charlie Neibergall 


top story
Increase in state school aid means Sioux City district may need fewer cuts

SIOUX  CITY -- With state lawmakers settling on a 2.06 percent increase in basic state aid for Iowa’s K-12 public schools, the Sioux City School District "will not likely see significant reductions" in staff or programs, Superintendent Paul Gausman said Friday.

The Iowa Senate on Wednesday approved a $3.3 billion public school state funding package for the 2019-20 school year, sending the measure to Gov. Kim Reynolds, who said Wednesday she looks forward to signing the measure.

The package also includes additional funding for districts with higher transportation costs and per-pupil spending levels than some other districts.

The 2.06 percent increase in state supplemental aid is higher than the previous two budget years, which saw increases of 1.1 percent and 1 percent. 

During those recent years, Sioux City district officials were forced to cut millions of dollars in spending, which included slashing some teachers' pay and offering financial incentives to teachers who agreed to retire early.

The school board recently began work on a roughly $200 million budget for next year. In recent meetings with the board, Financial Officer Patty Blankenship prepared budget scenarios with supplemental state aid percentages at zero, 1, 2 and 2.3 percent.

"While we always hope to receive increases in school funding that are more consistent with economic inflation, we were prepared for an outcome that could result in a rate like the one currently pending approval...The proposed increase is an amount close to our highest scenario, so we recognize that it is a better picture for our budget than it could have been," Gausman said Friday.

Therefore, he added, "We do not predict the fiscal year 2020 budget will include the requirements of significant reductions. The board made difficult decisions in recent years to manage the budget through historically low growth in funding and those decisions have set us up for success with this budget, as well as for our future."

Last year, the board accepted Gausman's recommendation to eliminate the extra-duty pay previously given to 296 middle school and high school teachers, or about 30 percent of the total district instructors. The teachers received about $4,700 on average to perform additional classroom duties during sixth period, in the eight-period schedule. The decision saved $1.44 million, or nearly all of the $1.6 million school officials cut from the budget in fiscal 2018-19.

In the previous year, the school board approved an expanded early-retirement package to help balance the budget.

This year, legislators set the level of state aid in mid-February, much sooner than in some recent years. That's helpful, Gausman said, since Iowa districts are required to finalize their fiscal 2019-20 budgets budgets by April 15.

"It is always better to prepare the budget with the knowledge of the legislature’s approved revenue amounts rather than having to speculate," Gausman said.

In the current $204 million budget, $169.6 million comes from general fund spending. The district's current property tax rate is $15.35 per $1,000 of assessed valuation, or down by 4 cents per $1,000 from the prior year.

The school board is scheduled to next discuss the budget at its Feb. 25 meeting.