SIOUX CITY -- Sioux City economic development officials are optimistic about the future of the Badgerow Building after a Cedar Rapids, Iowa, bank bought the downtown building Wednesday.
Economic development specialist Chris Myres said the city does not know what plans Cedar Rapids Bank and Trust has for the building, purchased at auction for $1 million, but the city's economic development staff will be a willing partner in matching the bank with interested developers should it sell the historic building.
"We really don't know how this is going to play out," Myres said. "We'll do whatever we can do to help the bank find the best possible developer for the building."
Cedar Rapids Bank and Trust submitted the only bid for the Badgerow, which it had foreclosed upon after the owner defaulted on a bond agreement.
Sioux City attorney Richard Moeller, who represented Cedar Rapids Bank and Trust at the auction, said he did not know the bank's plans for the property. There were no other bidders present at the auction, conducted by the U.S. Marshals Service at the Woodbury County Courthouse.
Bank officials could not be reached for comment.
Myres said it's expected that the bank will sell the Badgerow, but bank officials haven't disclosed to the city how a sale might be conducted.
"I wouldn't imagine the bank has any long-term interest in the building," Myres said.
The building was sold Wednesday without redemption, meaning its California-based owner, Mako One Corp., will be unable to buy it back. Myres said at least half a dozen potential developers have shown interest in the Badgerow, most of them looking to renovate the 12-story building into a mix of residential and commercial space. Some of those interested parties sought updates on Wednesday's auction, Myres said, and his office has previously referred other developers to the bank.
If the Badgerow becomes available, Myres said it should sell and become the latest in a series of downtown buildings to be renovated as a mixed-use development.
"The majority (of developers) have told us that if the price is right, they'd be interested," he said.
The 1933 office building at 622 Fourth St. was foreclosed on in January, when Chief U.S. District Judge Leonard Strand entered a judgment of more than $5.2 million against Mako One and its managing partner Bruce DeBolt for the defaulted portion of a $6 million bond agreement that was secured to pay to renovate and redevelop the building.
Cedar Rapids Bank and Trust had filed for foreclosure in 2017.
DeBolt had planned on developing the Badgerow into a commercial center, but those plans never panned out. He bought the building, which had fallen into disrepair and had been red-tagged as unfit for occupation, for $440,000 in 2007 and announced a $10 million plan to renovate it to attract corporate data centers, restaurants, professional offices and other businesses.
When foregoing a $1.2 million loan from the city in 2013, DeBolt told the Sioux City Council that he had spent about $6 million up to that point on renovations. That same year, Cedar Rapids Bank and Trust issued $6 million in historic tax credit revenue bonds to Mako One and DeBolt to help fund the improvements, many of which have not occurred.
Since Oct. 30, Cedar Rapids Bank and Trust has spent more than $1.6 million in protection advances on current and delinquent property taxes, architects' fees, repairs and completion of renovations needed to meet the National Park Service's historic preservation requirements in order to keep tax credits tied to the property. Court filings show that a contractor had installed new framing, drywall, trim, baseboards, doors, windows, railings, fire suppression and painting by August.
The bank also continues to provide advances to J&M Real Estate Group, of Dakota Dunes, which is managing the property, to pay for utilities, insurance and ongoing maintenance.