Friday, March 08, 2013 7:00 AM
Steve and Tom Howard had already enjoyed success as businessmen when they decided in 2003 to turn an old manufacturing building into lofts.
As Tom Howard tells it, his dad was staring out the windows of his condominium at Brown-Camp Lofts about 10 years ago, and what he saw was a squat brick structure known as the Tones Spice Building.
“He just thought we would take a flier on that,” Tom said.
The Howards bought the building, converted it to nine condominium units and, presto, they were developers. Their next venture was to buy 8,000 square feet of vacant first-floor space at Brown-Camp. They teamed up with Meredith Corp. to design condominiums.
At that time, it was difficult to make a mistake if you were a novice entering the Greater Des Moines development picture.
The Howards already were successful as owners and operators of Riekes Material Handling Co. in Waukee, which sold and installed conveyor belts, storage units and other material handling products.
Steve Howard bought the company in 1991, and three years later, he brought Tom, who was a vice president at the former Daiwa Bank in Philadelphia, into the business as president.
Riekes has added locations in Marshalltown, Sterling, Ill., Minneapolis and Omaha, where the company bought Central Scale & Material Handling.
With business success behind them – early in his career, Steve also owned and sold two asphalt companies and a construction firm – the Howards were confident they could succeed as developers.
“We’ve enjoyed it. Dad and I have a passion for it,” Tom said. “Between the two of us, we were pretty confident in understanding the financial end of it.”
Success at the Tone Spice Building and Brown-Camp led the Howards, operating as ST Howard Development, to turn their eyes to the East Village, which “just seemed like an interesting place to be,” Tom said.
They have bought and renovated buildings on East Court Avenue and Locust Street, turning them into mixes of residential lofts and commercial spaces. Capitol Village Lofts at 507 E. Locust St. was purchased from a bank and converted from apartments to residential and commercial condominiums.
They sold 20 condominium units in 13 months.
“We thought we had it all figured out,” Tom said.
The Howards first new development project was e5w at 309 E. Fifth St. The building was designed as four floors of residential condominiums above one floor of retail space.
Construction started in the spring of 2008. By August, financial markets were in turmoil.
“We could sense that things were slowing down,” Tom said. “But we were already into it. It was too late to pull back.”
When the building was completed, its retail spaces were quick to fill. On the residential side, 18 of 28 condominium units sold. Then nothing happened.
“The return on for-sale condominiums is just not good right now,” Tom said. So they began renting out condominium units. They have no vacancies at the moment and a waiting list.
The building was left with an empty second floor, which was just recently converted into micro office suites, a trend that has become a popular way to provide working space on a short-term basis to startups.
The concept “caught fire” with the Howards in the first quarter of 2012. They worked with Slingshot Architecture, which has designed other office suites downtown, to come up with a scheme to create 13 offices of 125 to 225 square feet, a conference room, a kitchen area and a “collaboration room”.
The office suites also have access to a conference room with video conferencing capabilities, copying and shredding services, wireless and dedicated Internet, a fitness room and bicycle storage. Rents will run from $400 to $700 a month, including utilities, with short-term, long-term and month-to-month leases available.
Although they have had to alter their business model for e5w because of the slowdown, the Howards have acquired properties in another predicted growth area.
Beginning in 2007, when “we thought things were going pretty good,” the Howards bought properties along Southeast Sixth Street between Court Avenue and East Martin Luther King Jr. Parkway. It is the area designated as the Market District, a part of town that city planners believe will be the next big development area.
“We think the Market District will get a lot of attention over the next 10 years,” Tom said. Now, “East Village is a cool place to be.”
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