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OTTUMWA — The delays with demolition of St. Joseph Hospital will cost Blackbird a significant amount of money.

City council members are being asked to approve an amendment to the agreement with 312 E. Alta Vista, the limited liability company set up by Blackbird Investments to handle development of the St. Joseph Hospital site. The amendment finds the developer in default.

Demolition was supposed to be complete by Sept. 1, 2018. But when progress stalled amid a pay dispute between the company and the contractor, Blackbird missed the deadline. The work resumed in late July, and progress has been swift. The new deadline for completion is Dec. 15.

The city’s action will change the deadlines in its agreement for tax incentives for the site. It does not change the dates for the rebatement, though, meaning Blackbird will effectively miss out on a year’s worth of money.

City Planner Kevin Flanagan explained the change in documents provided to council members:

“This will likely mean that the initial 2 years of the schedule will have partial assessment results rather than just he first year and will bring an overall savings to the City on the rebate total at DA maturation.”

The written assessment did not give a monetary figure. Flanagan said Friday it would likely be six figures.

“It’s hard to say. I imagine it would be over $100,000,” he said.

But another project could overshadow Blackbird during the meeting. The city is unveiling a request for qualifications for a new, $20 million development along the north bank of the Des Moines River.

The plan envisions eventual development stretching through the hydro parking lot to east of the skate park, which would be moved. The city’s request is for the first two phases of the project.

According to the documentation provided to the council, phase one is “envisioned as a mixed-use building with four stories and approximately 40-50 units with an approximately 4,000 [square foot] restaurant on the first floor.” Phase two is also a four-story building with approximately 50 housing units.

Owner-occupied townhomes would extend the development east along the riverfront toward the Jefferson Street Viaduct. But that is part of the third phase, and is not included in the current RFQ.

Flanagan said the housing “are market rate structures.” The application for a federal Build Grant in connection with the work will be submitted in mid-2020. The project is not dependent on the grant, but federal funds would accelerate the work.

“The real focus of this thing is taking advantage of this incredible asset that the river gives us,” Flanagan said.

The development is in its very earliest phases. The earliest work might start is spring of 2021, and numerous details will need to be worked out before that.

Flanagan’s hopes are high, though.

“If we’re successful here we’re going to change the face of our downtown,” he said.

Matt Milner can be reached at mmilner@ottumwacourier.com and followed on Twitter @mwmilner

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Managing Editor

Matt Milner currently serves as the Courier's Managing Editor. Milner is a trained weather spotter and is usually outside if there are storms. He joined the Courier in 2002.

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