A pair of rapidly growing businesses plan to purchase the largest office building in downtown Dubuque and invest millions into the structure.
Insurance broker Cottingham & Butler and financial services company Heartland Financial USA intend to close on the purchase of the Roshek Building, 700 Locust St., prior to the end of the year.
The two companies have formed a partnership entity — Roshek Property LLC — that would make the purchase. The nine-story building is owned by nonprofit Dubuque Initiatives.
While an agreement has not been finalized, officials indicate that the price could be in the ballpark of $12 million.
Cottingham & Butler and Heartland Financial then would spend at least $2.85 million on improvements to the structure. The companies collectively have committed to creating at least 32 new full-time positions.
“To me, this is a huge win for the city,” said Cottingham & Butler President and CEO David Becker. “You are getting a great historic building into the hands of private businesses that are going to be committed to it for the long term.”
Both businesses already have a presence in the building. Cottingham & Butler occupies the fifth floor, while Heartland occupies the third floor and part of the fourth.
Over the course of the next year, both would double their footprint. Cottingham & Butler would occupy floors seven and eight, while Heartland Financial would occupy floors three, four and five.
IBM now occupies the sixth and ninth floors, while multiple business and nonprofit tenants occupy the first and second floors, mezzanine and basement.
As part of the agreement, the city would commit to building a new “500-space parking structure to accommodate the influx of employees in the downtown area.”
Mayor Roy Buol said he is “excited about the potential” for the building.
“These are both prominent legacy businesses in our downtown, and they are growing significantly on a local and national level,” Buol said. “If they don’t find space (in the downtown), they will find it elsewhere, here or in another city. I would love for them to continue their growth in the downtown.”
Cottingham & Butler was founded in 1887 and is the 25th-largest insurance broker in the country. It employs more than 1,000 people, including more than 700 in Dubuque.
Local employment has grown by more than 200 in the past five years. And while the development agreement promises only a modest number of job additions, Becker suggested the number of new hires could be significantly larger.
“We have averaged, over the last 30 years, 12% growth a year,” Becker said. “If you take those numbers and, say that continued, we are going to need a lot of people.”
Heartland Financial, the parent company of Dubuque Bank & Trust, had $200 million in assets when it formed in the early 1980s. Today, the company has more than $12 billion in assets and owns 11 community banks across the Midwest and western United States.
Heartland has just shy of 2,000 employees nationwide, according to its most recent earnings report.
President and CEO Bruce Lee said that figure includes about 450 Heartland employees in Dubuque. An additional 150 work at Dubuque Bank & Trust.
Heartland’s Dubuque workers are scattered across four locations: the former Walsh Store building at 1301 Central Ave.; part of the DB&T banking center at 1398 Central Ave.; the Roshek Building; and a portion of the DB&T banking center at 2196 Holliday Drive.
“Just calling a simple staff meeting becomes difficult,” Lee said.
Heartland officials hope to consolidate all operations within Roshek.
The company then eventually would sell the property at 1301 Central Ave. DB&T would continue operating out of the facilities at 1398 Central Ave. and 2196 Holliday Drive.
Cottingham & Butler is similarly spread out in the city.
In addition to the Roshek Building, its employees also work in the O’Connor & Thomas building at 1000 Main St.; the Town Clock Building at 825 Main St.; and the company headquarters at 800 Main St.
Becker said Cottingham & Butler has no plans to vacate these other locations.
“The space acquisition allows us the room to continue the growth that we have had and to do it in ways that would be first class,” he said.
Plans are contingent on the approval of agreements on both the city and state levels.
That process will commence on Monday, Dec. 2, when the Dubuque City Council is expected to vote on whether to set a Dec. 16 public hearing on a proposed development agreement among the City of Dubuque, Roshek Property, LLC, Cottingham & Butler and Heartland Financial.
Per the agreement, Roshek Property, LLC would receive tax increment rebates over a nearly 10-year period. Such incentives would be a transfer of tax increment rebates previously promised to Dubuque Initiatives.
The city will identify a location for a new 500-space parking structure to accommodate the influx of employees. Construction would be completed by Dec. 31, 2022.
Moreover, the city would install lighting and call boxes between this new parking structure and the Roshek Building.
DB&T President and CEO Tut Fuller said such amenities are critical to the project.
“We need sufficient and safe parking options for our employees,” he said.
Council members also are expected to vote Monday on whether to support applications from Heartland and Cottingham & Butler for more than $1.8 million in state business incentives.
Vision for the future
Over the past decade, Dubuque Initiatives has played an integral role in the development of the Roshek Building.
In 2009, the nonprofit group entered into a development agreement with the City of Dubuque whereby Dubuque Initiatives would invest $39 million into the historic structure.
Such improvements paved the way for the arrival of IBM, which committed to bring 1,300 jobs and occupy the top five floors of the building.
IBM met its job goals within two years. However, city documents noted that the “number of jobs in the building from IBM has slowly decreased” over time. The building currently holds 1,053 employees, a figure that includes workers from IBM and multiple other entities.
Council members on Monday will be asked to terminate the city’s development agreement with Dubuque Initiatives. The move would be contingent on the sale of the property.
Kevin Lynch, vice president of the Dubuque Initiatives board of directors, said he is pleased that a sale is in the works.
“It makes sense to shift the building from nonprofit ownership to private ownership,” he said. “That is where it belongs.”
Lynch also is energized about the future prospects of Dubuque Initiatives. He noted that the influx of funding from the sale would allow the organization to refocus.
“This will free Dubuque Initiatives up from being landlords and allow us to get back to our mission of economic development and creating new jobs,” he said.
In addition to improving tenant spaces, the new building owners would make significant investments in common areas.
Lee, of Heartland, said plans for the building include a large meeting room with capacity to hold 200 people, as well as a workout facility and cafeteria-style food court for employees.
Such offerings would help both Heartland and Cottingham & Butler attract employees from outside of the Dubuque area.
“We need to have amenities that people are used to having in Chicago or Minneapolis or Atlanta or Phoenix or Denver,” said Lee. “That is part of the vision that we have.”