SIOUX CITY, Iowa (AP) - An alumni group for graduates of Sioux City’s former Central High School could be booted from the former school-turned-apartment complex by the end of the month.
The Castle on the Hill Association’s 15-year lease of the former gymnasium (colloquially known as the “Dungeon”), the third-floor auditorium, a second-floor storage area and an office space is set to expire Dec. 31.
The building’s owner tells the Sioux City Journal the apartment complex has been unprofitable. The end of the alumni group’s lease, he says, is probably the only way he could sell the property to another operator.
The castle-like former school, at 610 13th St., opened in the spring of 1893 and shut down in 1972 in anticipation of the construction of the three current public high schools — East, North and West. The Castle was added to the National Register of Historic Places in 1973.
The Castle on the Hill Association purchased the building from the school district for $1 in 1976.
In 2002, the association sold the building for $1 to developers who turned the aging structure into a 75-unit apartment complex. In return for selling the building at that nominal price, in 2004 the association was able to lease their space for 15 years, at $1 per year.
The building’s owner, Woodbine, Iowa-based developer Todd Heistand, said he wants to sell the building to another developer, or to the association itself, after the group’s lease expires. Allowing the group to retain access to a large chunk of the building could make it less attractive to prospective buyers, Heistand said.
“As soon as their lease runs up, we’re going to be probably selling the building or just trying to figure out what to do with it so I don’t have to — it’s going to come out of our portfolio somehow,” Heistand told The Journal last week. “And I’m not sure how. But bottom line is, I’ve got to be able to offer it to a new buyer free and clear.”
Members of the alumni group view the situation differently. The association kept a very small stake in the building — 0.0049 percent — after they sold it 17 years ago, and they have first right of refusal in a sale. But the alumni group currently does not have the resources to buy the historic property, which is assessed for just over $1 million, according to Woodbury County records.
“So I look at it, they’re kicking out their part owner,” said Shirley McLeod, a 1952 Central High graduate and president of the association.
“They seem to feel as though the reason they don’t want to extend our lease is because they’re looking for a new developer. And they would not want to lay our position there on a new developer,” said Dennis Ard, a 1962 Central High graduate and member of the association board. “And that’s totally confusing to us, because we’re outstanding tenants. That is, the space that we occupy is immaculate.”
In years past, the association has used the gymnasium and auditorium for special events. The gym was periodically rented out to groups for activities such as soccer and roller derby. The association also runs a gift shop that sells Castle and Central High School-themed merchandise.
Fewer events have been held in the Castle lately, due partly to a shortage of parking, members of the association said.
Heistand, who runs NuStyle Development Corporation with his wife, Mary, said his company has lost considerable sums of money on the Castle apartment complex in recent years.
“The problem is, over the years, I mean (the Castle) has always really struggled to even break even, and recently it’s really started losing a lot of money,” Heistand said. “Just keeping up with the heat and the HVAC and the heat bills and everything else. We’ve worked with the Castle on the Hill Association numerous times over the years, trying to figure out how to save some dollars and things like that, and we never really got very far.”
According to the NuStyle website, the cost to redevelop the property totaled more than $9.2 million. The city issued two loans totaling $570,000 to the property in 2003 for the purpose of creating 38 units of affordable housing there.
Out of the 75 units in the building, only 14 are rented at market rate, which ranges from $750 to $800 per month. The remaining 61 units are low-income, renting from $573 to $785. All but three of the building’s units are leased.
The maroon sandstone building, Heistand said, is in need of repairs common to older structures — re-pointing of the mortar, new air conditioners, new windows, a new roof, new plumbing fixtures — all rather costly. The alumni association, he added, hasn’t helped him defray the property’s expenses.
“We pay all the heating bills and everything else,” he said. “It gets very expensive, because, over the years they haven’t tried to help a whole lot.”
Though it’s a heavy lift and there isn’t much time left, the association hopes to raise enough capital to buy the Castle for themselves. Ard estimated they’d need around a quarter million dollars for a down payment; they have a long way to go to get anywhere near that dollar figure.
“We are still pursuing alumni, but some of the best sources that we thought we had, don’t seem to want to put their money into that kind of development,” Ard said.
But it’s not for lack of effort.
“We have sent two letters out asking for help… and we’re just not getting a good response,” McLeod said.
Heistand said he’d like it if the association would take the building off his hands.
“They do have an option to purchase the building, that I was kind of hoping they would exercise,” he said. “But I don’t know that that’s going to happen.”
Frank Conkey, a 1963 Central High graduate and another member of the association’s board, said he didn’t want to dwell on the possibility of losing access to the Castle.
“You have to look at the positive side of things in something like this. If you look more into the downside of it, I’m sure you’re not going to succeed. That’s just like in business, you know, if you don’t look positive, there’s a good chance your business is not going to succeed,” Conkey said. “But, yes, I know we’ve got a lot of stones to step over.”
The association hasn’t finalized its plans for the Castle if they do manage to buy it.
“We’ve had several discussions about that, what we would like to see done,” McLeod said.
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