Drive begins for Charitone project "local match"

Karen Wilker, incoming president of Chariton Area Chamber/Main Street, presents a check for $16,700 to Alyse Hunter and Denny Bisgard, respectively president and vice-president of the Lucas County Preservation Alliance.

Ninety percent of funding needed for the $5.4 million restoration and redevelopment of the Hotel Charitone is in hand or accessible. The challenge now is to raise the 10 percent balance --- roughly $550,000 --- so that the project can be completed debt-free.

That was the message Lucas County Preservation Alliance officers brought to Noon Rotarians Friday as a  local fund-raising effort began.

In response, a check for $16,700 was presented to the Alliance during Friday's meeting by Karen Wilker (above right), incoming president of Chariton Area Chamber/Main Street. Recipients were Alyse Hunter (center), Alliance president, and Denny Bisgard, vice-president.

The money has been held in trust by Chamber/Main Street for the estate of the late Lucille Judd, who died during 2003. Mrs. Judd had designated the funds for the Hotel Charitone --- should a viable restoration effort ever be launched, something that was in doubt 10 years ago. Wilker also expressed Chamber/Main Street's commitment to further fund-raising efforts.

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The Preservation Alliance, a tax-exempt nonprofit corporation, is the controlling member of Hotel Charitone LLC, the taxable entity that holds title to the hotel in order to qualify it for the $1.1 million in federal tax credits that will fund roughly 20 percent of the project.

Hy-Vee, Inc., which in January 2012 committed $1.6 million to the project and is a major source of up-front financing, is the other member of Hotel Charitone LLC and will, as required by federal law, remain the major stakeholder in the LLC for five years.

Raymond E. Meyer, treasurer, is the third officer of the Alliance; Christopher Watkins, representing Hy-Vee, is manager of the LLC. Hunter, Bisgard, Meyer and Watkins coordinate the Charitone project in conjunction with Koester Construction Co., general contractor.

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Meyer, on Friday, outlined the status of funding for the Charitone project as it stood at the end of May --- $1,337,372 in state historic preservation tax credits (25 percent of project cost); $1,069,898 in federal historic preservation tax credits (20 percent of project cost); $850,000 Preservation Alliance developer contribution; $885,000 Hy-Vee contribution; $500,000 Vredenburg Foundation contribution; and a projected contribution of $707,218 from other sources needed to fully fund the project without incurring long-term debt.

Of that $707,218, Meyer reported, $155,559.13 had been raised prior to Friday's meeting. That includes $110,559.13 from individuals --- nearly all of whom have ties to Lucas County but do not live here; $40,000 from public charities (including the Lucas County Historical Society, which committed $25,000 to a Hotel Charitone project some years ago and now has fulfilled the commitment) and $5,000 from corporations.

The need now is for roughly $552,000 or more from individuals, corporations and charitable groups willing to demonstrate now-lagging "local match" support for the project, Meyer said. An advisory fund-raising committee is being formed, Meyer said, and the drive will continue during the summer.

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In the meantime, those who would like to make tax-deductible cash contributions may do so, payable to Lucas County Preservation Alliance and mailed to the Alliance at P.O. Box 678, Chariton, IA 50049. Meyer also is the contact person for those who wish to discuss potential contributions or obtain further information. He may be reached at (641) 774-2179 or rcmeyer@iowatelecom.net.

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A variety of other information regarding the Charitone project was shared during Friday's meeting, including the following --- in no particular order.

--- Although rent levels for the 12 Charitone apartments have not yet been set, they will at be at "fair market" levels and not affected by the amount of debt that may or may not be incurred after results of the current fund-raising drive are known. Sufficient interest has been shown to fill all of the apartments, but more inquiries will be welcomed. Completion date for the Charitone project remains calendar year 2013.

--- The exterior appearance of the Charitone is unlikely to change significantly until windows have been re-installed. Windows for the west and south street facades currently are being restored, as required by Department of the Interior guidelines that must be followed in order to qualify for tax-credit financing; new windows will be installed on the north and east facades.

--- Work continues inside the Charitone on framing and developing apartments on the second, third and fourth floors and preparing the first-floor "vanilla box" --- finished with base floor, walls and ceiling as well as utility connections --- within which Hy-Vee will develop a restaurant, another of its huge contributions to the project.

--- Once complete and filled, each apartment in the Charitone is expected to contribute roughly $38,000 annually to Chariton's economy above and beyond rent, according to Hunter, citing Iowa Economic Development Authority and other calculations.

--- Although the current ownership structure of the Charitone seems complex, it follows the redevelopment pattern adopted for nearly every other National Register of Historic Places-listed property in the United States in order to qualify the projects for federal historic tax credit financing. Federal tax credits are issued only to buildings owned by taxable entities although those entities may be controlled by non-profits, as is the case with the Charitone. State historic preservation tax credits, however, may be received by non-profits.

--- In order to quality for federal tax credits, the ownership structure of the Charitone cannot change for five years. As a result, Hy-Vee will remain the major stakeholder in, although not the controlling member of, Hotel Charitone LLC for that period. After that, the Lucas County Preservation Alliance is slated to become the major stakeholder as well, according to Meyer.

--- The stated goal of the Preservation Alliance is to "cultivate a thriving cultural and economic climate in the city of Chariton and throughout Lucas County by rehabilitating, restoring, and preserving unique building and properties." The Alliance looks upon the Charitone as its first project, according to Hunter. Once the Charitone project has been completed, the Alliance hopes to undertake other rehabilitation and restoration projects in Lucas County, she said.

The Charitone as it looked at the end of a rainy day on Friday. Window openings on the hotel's street facades are covered awaiting re-installation of original windows, now being restored. Note, too, that the former Braden Avenue entrance to the former hotel restaurant has disappeared as the exterior is restored to its 1923 appearance.