State grant boosts renovation plans for former Dragon building

Aspect Investments, developer Steve Emerson plan $4.2 million adaptive reuse project

Former Dragon building Cedar Rapids
The former Dragon restaurant building at 329 Second Ave. SE in Cedar Rapids. CREDIT RICHARD PRATT

Developer Steve Emerson’s plan to renovate the former Dragon building in downtown Cedar Rapids has received a significant financial boost, via a grant from the Iowa Economic Development Authority.

The IEDA board approved a $2.165 million grant May 2 to support the Dragon project under the state’s Historic Preservation Tax Credit program.

The grant was awarded to Aspect Investments L.C., a development entity led by Mr. Emerson, who has proposed an adaptive reuse project for the former Dragon building at 329 Second Ave. SE.

The project, comprising a $4.2 million investment, involves the rehabilitation of the historic 14,400-square-foot building, which has sat unoccupied since 2018 when its most recent tenant, Hazzard County Saloon, moved across the street into the former Downtown Tire building.

Plans call for commercial space on the first floor and 13 apartments on the second and third floors, including five studio units, seven one-bedroom units and one two-bedroom unit.

The city council has approved a local match for the project, which includes a 10-year, 100% reimbursement of the project’s increased value. Estimates indicate the project will generate $514,000 in property taxes over the 10-year period, of which $380,000 would be reimbursed.

The project will adhere to historic rehabilitation standards, Cedar Rapids economic development coordinator Scott Mather told the council in May 2023.

City leaders praised Mr. Emerson’s former Dragon restaurant building project, reviving the building at a prominent downtown Cedar Rapids location.

“Some of us can remember The Dragon back in the day, but it has languished for 30 years,” councilmember Dale Todd said. “Being able to maintain the historical context of the building, I think, is a huge win for all of us.”

The building, originally dubbed the “Muskwaki Block,” was built in 1897 for lawyer Benjamin Franklin Heins as an investment property. It was designed by proiment Cedar Rapids architect William Fulkerson as a three-story commercial building with a stone base, brick cladding with stone details, and arched window openings.

To advertise the building, developers used an adaptation of Meskwaki, as a tribute to the local Meskwaki American Indian tribe.

The first story was divided into three storefronts that were occupied by a variety of tenants over the years, including grocery stores and restaurants. The Dragon, the city’s first Chinese restaurant, occupied the corner space for about 55 years. Offices were located on the upper stories until the space was converted to apartments in the 1930s.

The grant for the Dragon building project was part of over $19 million in IEDA awards to help transform 12 historic buildings statewide, including a $460,161 grant to Miltner Inc. to support the renovation of the Warner building (also known as the Ilten building) in Cedar Rapids.

The Historic Preservation Tax Credit program provides a state income tax credit to projects that rehabilitate underused or vacant historic buildings while maintaining the historic character-defining features that enhance neighborhoods and communities, according to IEDA officials. Work completed on buildings must meet the federal Secretary of Interior standards.

“By supporting the restoration and revitalization of historic buildings, we not only preserve the architectural heritage of our communities but also breathe new life into them, creating vibrant spaces for generations to come,” said IEDA and Iowa Finance Authority director Debi Durham.