Two structures, fewer units proposed for McGregor riverfront condos

By Audrey Posten, Times-Register

At a July 23 meeting, the McGregor Planning and Zoning Commission recommended approval of a request by Trilogy Partners, LLC, to adjust its plans for a condominium project on the McGregor riverfront. 

A new proposal to build two structures instead of one and reduce the number of units from 18 to a combined 14 is the latest for the former Holiday Shores Motel property, which has been a point of contention since Trilogy purchased the site and tore down the motel in 2015. A requested zoning reclassification was denied at that time, as the city encouraged construction of a joint hotel/condominium project rather than only condos. Years  of inactivity prompted the council to acquiesce in 2021, when it approved a zoning change to waterfront mixed use, but under several conditions. Yet, the property has remained empty.

The proposed changes are chiefly due to cost, according to contractor Steve McDonald. While McGregor stands to grow its tax base and population, “locally, what’s our incentive to build here?” he questioned.

“One reason we went from one structure to two is mainly financial and the risk of having a $10 million building at 7.5 percent interest with zero incentives from your city,” McDonald said. “I’m building other apartment units right now across the state and there’s not one single project that doesn’t either have free land, TIF funds, workforce housing tax credits. Other jobs wouldn’t be economically feasible without it when you talk cost of materials and labor skyrocketing.” 

McGregor Mayor Lyle Troester succinctly reminded McDonald that “the river” has long been the draw for the property. It factors into the contractor’s proposed arrangement of the buildings in a vee, with a skewed riverfront view for each. 

Units will sit side by side, each 2,240 square feet and three stories tall, with a garage at ground level and living space on the upper floors.

“We tried to do 16 and we couldn’t quite fit doing eight units and eight units, but we were able to do seven and seven,” McDonald explained. 

He also described 14 units at $600,000 or more apiece as “more advantageous” than 18 $300,000 units. 

“We’re offering more of a deluxe unit. These units are going to have rooftop patios, options for elevators,” he said. “We’re targeting a little bit higher value group versus just having a bunch of small, cookie-cutter condominiums in one big building.”

Private docks will accommodate unit owners’ boats and, per the 2021 agreement between Trilogy and the city of McGregor, a walkway and public pier will be incorporated into the project. The pier will be a floating dock structure rather than a physical land mass, McDonald noted.

Planning and zoning, and eventually city council, approval will allow McDonald to finalize and submit plans to the Iowa Department of Natural Resources. He’s hopeful for the agency’s OK by this winter.

Weather permitting, work would begin in early spring with the installation of infrastructure for both buildings. The north building would likely be constructed first, completed in an estimated eight to 10 months.

“Then we’ll advertise the other building, and as soon as we collect enough deposits on building two, we’ll put that up,” McDonald said.

Planning and zoning members and city officials raised several questions about the project, including how it would fit aesthetically with McGregor’s historic downtown.

McDonald said building exteriors would largely be black LP siding, with red brick in the front, along with all black windows and doors.

Language in the original agreement stated “it will have a similar feel to the downtown look. As long as that language remains the same...I would be fine with that,” said commission member Jason Stollenwerk.

Andy Fettkether wondered if additional parking would be available, and McGregor city attorney Mike Schuster anticipated a similar concern from the city council.

“Right now, it looks like the only parking is under the structure. People are going to bring their boats too,” Fettkether said.

McDonald indicated each unit would have four parking spaces—two in the garage and two more in the 24-foot-wide driveway. No separate guest spaces are included in the design, and “there’s definitely not going to be additional room for boat parking,” he said, hoping the private docks would suffice.

Commission member Ruth Crawmer asked to what extent short-term rentals would be allowed. Although the 2021 agreement required the developer to permit vacation rentals as a replacement for hotel rooms the city wanted, there has since been a proliferation of Airbnb listings throughout the community.

“We should attract a new demographic and not add more Airbnbs. We need more people participating in the community, coming in and being invested and excited,” Crawmer said. 

Trilogy representative Lynn Demaray believes prospective buyers plan to move to McGregor full-time.

“And I’m not sure anyone in this price point is going to want to VRBO their house,” she reasoned. “I also think that’s a home owner’s association decision once they develop it. In Harpers, it’s not allowed in the condos at all.”

Perhaps the biggest concern, though, was when the second building would be erected.

“My concern is that one building will go up and the second one won’t. You said, ‘If we can’t sell it, we won’t build it.’ That’s pretty open ended. We have one shot at filling that whole lot,” said Troester, the mayor.

“What is the guarantee, like timeframe?” Crawmer asked.

McDonald said it will be market dependent. He anticipates construction of one building will drive interest in the second.

“We’re not going to build it and sit on a $4 million or $5 million building. But we’re also not going to be able to monetize the property without doing both. There will be a sunk investment for the first building that won’t be recouped until [the second goes up],” he explained. “Our idea is having four to five units sold and then put the building up. We can withstand holding onto a couple units.”

McGregor City Administrator Denise Schneider said an assessment agreement could help. On a $10 million project, for example, developers could sign an agreement stating they will be taxed at that $10 million value, even if they don’t build it. 

“If you only build $1 million, you’re still going to pay tax on $10 million for a period of time. It’s a guarantee that you build what you say you’re going to build, and the city has an assurance of that income,” Schneider said.

While McDonald hopes the buildings will be constructed back to back, he felt two to three years after the first wouldn’t be an unfair timeframe to have the second completed. The commission was willing to spot the project five years.

“I want to say that five years would be more than enough time,” said Demaray, the Trilogy representative. “We’d love to have it done sooner than later, for sure.” 

With the planning and zoning commission’s unanimous recommendation, the McGregor Council will now consider approval of the proposed changes. Its next meeting is Wednesday, Aug. 21, at 5:30 p.m.