WATERLOO — Downtown areas in Waterloo and Cedar Falls are experiencing a renaissance, in both businesses and residential.

Over the past decade or so, developers have added apartments in long-dormant spaces above downtown storefronts.

And several projects under construction or on the drawing board call for the same formula — businesses on the ground floor with living quarters overhead.

“Consumers are used to having a lot of choices, and housing options are no different. If our community is going to be complete, we need to have a lot of housing options, and the suburban ranch-style house isn’t right for everybody,” said David Deeds of JSA Development.

His company has reworked 18 buildings in downtown Waterloo — like the 115-year-old Steely Block building — mostly two- and three-story structures around the Fourth Street corridor. In doing so, the group has created about 50 market-rate apartments in the upper floors.

“They have been pretty well received and well occupied,” Deeds said.

Real estate agent Jim Sulentic, who is working on a project in Cedar Falls, said attractions in the downtown areas draw in younger residents.

“The draw is downtown Cedar Falls. Young people like to be around where everything is at, and the apartments are highly desirable near downtown Cedar Falls,” Sulentic said.

Deeds said a lot of the tenants are younger than 35 or older than 55, mainly people who don’t have children yet or whose children are now grown and out of the nest. Professional people relocating to the Cedar Valley from other communities also account for a fair number of the tenants, he said.

Downstairs, the businesses are usually locally and regionally based companies, Deeds said. Food and beverage operations are popular, as are professional offices like lawyers and architectural firms.

“The real key for these projects to be very successful was for us to find operators of businesses for those first-floor spaces, like the Rockets Bakery that just opened,” Deeds said.

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Upcoming mixed-use developments coming to the area include a projected $4.5 million multi-story building adjacent to the RiverLoop Amphitheater. Undertaken by Grand Developments LLC, the project will have parking on the ground level with office and retail space at the same altitude as the elevated plaza and some 40 apartments above that.

At U.S. Highway 63/Mullan Avenue and Jefferson Street, construction is well underway for the second phase of Grand Crossing, which will be a $3.5 million mixed-use structure.

In Cedar Falls, Sulentic and developer Brent Dahlstrom are working on a commercial-residential project on the site of the former Iowa Sports Supply. Initial plans call for 7,600 square feet of commercial space on the ground floor with some 50 residential units on the second and third floors.

“The Cedar Valley is booming, and interest rates are still relatively low, and there is a lot of excitement in building in Cedar Falls and Waterloo. We are just glad to be a part of it,” Sulentic said.

Deeds, who has been involved with restoring existing properties, sees the popularity of the formula as a throwback to the community’s earlier days when the downtown was the focus of city life.

“In some respects, this is just putting these buildings back into good use, to a similar use to what they were originally,” he said.

Most upper floors were used when they were first built, either as professional offices or living space. Post World War II, a lot of the overhead space fell into disuse.

“Some was storage for the business below. Some might have been used at a relatively low level of use. … Going back to the Steely Block, the third floor where the ballroom was at, I would venture to say it had probably been at least 50 to 60 years since that third floor had been used,” Deeds said.

He said that began to change in the early 2000s.

“In other cities, you later on tend to see new construction follow along. And to some extent that’s starting to happen in downtown Waterloo,” Deeds said.

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