PROGRESS: Badgerow Building, Sioux City landmark, gets new life

"We were just blown away that a building like this was even available and had not been redeveloped, given how large and prominent it is relative to the whole city," he said. "When we found the property, it was really just an issue of mechanical, electrical, plumbing -- what do we have to do?"

Omaha-based Clarity Development, Inc. has been rehabilitating the historic 12-story building, 622 Fourth St., into a mixed-use facility with housing, office space and an upscale restaurant. The project's total budget is $25 million, with construction costs coming in at around $16.5 million. W.A. Klinger is the project's contractor, while BVH Architecture is the architect.

The Badgerow had been vacant and red-tagged by the city as unfit for occupation for more than three years before California-based Mako One purchased it for $450,000 in 2007. Mako and its managing partner, Bruce DeBolt, had planned on transforming the Badgerow into a hub for small data centers, as well as space for restaurants, professional offices and other businesses. But his vision never came to fruition.

The City of Sioux City purchased the Badgerow for $750,000 from a bank that foreclosed on the troubled property and, then, sold the high-rise to Clarity Development for $1 million in 2020. Clarity Development's focus is historic renovations using historic tax credits and affordable housing using affordable housing tax credits.

Agarwal said he found out about the Badgerow from some Iowa brokers, whom he had been working with.

"We actually tried to buy it from the bank directly. But, then, the city bought it," he said. "We submitted a response to the RFP (request for proposal) as part of that process and were fortunate to get that under contract, so it worked out well."

Agarwal said the building's previous developer spent a fair amount of money addressing a lot of "potential headaches," including drywalling and abating eight of the 12 floors and fixing a couple elevators.

"The prior developer had looked at it for an office and data center. While there was kind of HVAC and MEP (mechanical, electrical, plumbing) systems in place, we actually took a pretty detailed, rigorous process to determine what's the best way to approach the HVAC and just MEP, in general, for the building," he said.

Agarwal said Clarity Development coordinated with engineers in Omaha to get a breakdown of potential challenges concerning the building's mechanical, electrical and plumbing. Five contractors who looked at the building reviewed a detailed memo that those engineers put together. Ultimately, the contract was awarded to W.A. Klinger, and work began in early November of 2021.

The building's interior has a modern industrial look throughout, according to Agarwal. He said the apartments feature granite countertops, while the hallways and common spaces have Art Deco lighting.

Agarwal said he anticipates that 70 one-bedroom market-rate apartments on floors 3-11 will be 100% leased by June or July.

"From an apartment standpoint, we've been very pleased. Even early on in the project, people had reached out to me and our property management company, Seldin," he said. "We've gotten a lot of positive feedback from local residents about potentially living in the apartments that we have planned."

Class A office space and a restaurant and bar are still in the works for the first and second floors, however, Agarwal said there are currently no commitments with commercial tenants. He said the building has received "a lot of great feedback and interest" to date and noted, "It's just finding the right people who will ideally stay in the building for decades to come."

"In a project like this, the commercial tenants will typically be more active when we're closer to finishing up construction. We're basically at that stage now," he said. "So, I'd anticipate in the next three to six months we'll probably lease up the remaining of the commercial spaces in the building."

A health club was initially planned for the 12th floor, which also features tenant lounge space, but Agarwal said that floor is "kind of in motion." 

"We were thinking a gym, originally. We got interest from a potential restaurant/bar user for a portion of it, about 3,000 square feet. So, we'll kind of contemplate that. If they move forward, we'll just end up doing that on the 12th floor," he said. 

Agarwal said the Badgerow is a building that Clarity Development "would never sell," given its prominence and successful rehabilitation. He said the company is looking to acquire additional property in Sioux City to redevelop over the next two years and credited the city for being "developer-friendly."

"It definitely made us very bullish on Sioux City in the long-term," he said. "We've just seen all of the development that has gone on over the last couple of years with the Warrior Hotel and what (the city) has planned the next couple of years. We're excited to be part of the future of Sioux City, for sure."