By Sarah Breemer Pfennigs
Rumors that the Spaulding Loft Project, an ambitious $12.5 million venture that will turn the former car manufacturing plant into a 77-unit apartment complex, has filed for bankruptcy, is false.
According to business insiders, construction is still underway with plans for the lofts to be completed by Spring 2016.
The project, which has suffered incorrect reports of foreclosure and bankruptcy for months now, is actually flourishing, says Angela Harrington, former Grinnell Chamber of Commerce president.
“The Iowa Transportation Museum building – the building that is finished, is the one that has been foreclosed on by the bank,” Harrington stated. “The rest of the campus – the part under construction – is owned by Hubbell and is full steam ahead. 77 fantastic, affordable loft apartments will be ready by next year.”
“The foreclosure on the Spaulding Center for Transportation/Iowa Transportation Museum is a completely separate issue from the Spaulding Loft/Hubbell Development project. Absolutely no connection,” said Russ Behrens, Grinnell’s City Manager. “All matters related to the foreclosure of the ITM [Iowa Transportation Museum] are a matter of public record [Poweshiek County]. The city of Grinnell has no ownership interest in the ITM and has no part of the loan that was in default.”
The city of Grinnell was, however, on the receiving end of a federal grant and the ITM was its sub-recipient, with a requirement that a museum be housed in the building for 20 years. The default would force the ITM to vacate the building, which would require repayment on a portion of the original grant amount. According to Behrens, the city has weighed the option of purchasing the building so the museum could remain on-site, as well as the option of repaying the grant outright.
“It appears the cost to own and maintain the building for the next 18 years is substantially higher than simply repaying the grant back to the IDOT,” Behrens said. “In short, we are leaning toward repayment of the grant at this time as opposed to buying the building out of foreclosure. Our financial advisors are currently finalizing the cost of these two options, but initial assessments show the repayment of the grant to be our best long term option.”
Due to a District Court ruling, the ITM was unable to access the federal historic tax credits that were meant to be used to repay the loan. The ITM Board reported to the city of Grinnell that the decision made it “nearly impossible” to access the credits by any nonprofit corporation and was regrettably rendered during construction of the project. The credits must be approved prior to construction and cannot be obtained until project completion.
Mayor Gordon Canfield also lamented the District Court ruling.
“Things were sailing along pretty well until that unfortunate court ruling hit us,” Canfield said. “If not for that the museum would have continued on. Several prominent Grinnell citizens worked hard to get the idea to take place here. Other towns wanted it, but we won out due to several factors; chiefly, the property was already on the National Historic Registry, thanks to the work of a Grinnell College student many years ago. And, of course, Spaulding made buggies and autos in those buildings.”
Canfield also wants to assure the community that, despite the troubles of the ITM, it won’t interfere with the Spaulding Loft project. Harrington concurs.
“The other three buildings [outside of the ITM on the Spaulding campus] are independently owned by Hubbell,” Harrington said. “Hubbell [is aware] of the confusion and will issue a press release detailing their progress and projected opening date.”