Thanks to a businessman who purchased and restored the former Yancey Hotel in Grand Island, the downtown building survived destruction and now contains 57 privately owned condos.
The historic hotel is at 123 Locust St. in the heart of downtown.
In 1984, the hotel was in similar condition as the North Platte Pawnee, needing to be upgraded or demolished. The hotel was originally built in 1917 and after a couple of setbacks, it opened in 1923 with 150 rooms.
Situated near the Grand Island train depot, the hotel was a favorite spot for travelers. In addition to guest rooms, the original hotel contained a cigar stand, billiard room, sample rooms, telegraph office, coffee shop and pharmacy. Third floor meeting rooms served business, civic and political groups.
“From the Governor’s Suite to the front doorman, The Yancey was a first-class hotel,” the National Register of Historic Places says.
Jim Arter, the president of the Arter Development Group in Lincoln said his father, Dean, an architect, bought the building in 1984.
The old hotel had run into financial problems and the only tenant still there was the KOLN-KGIN TV station, Arter said.
“The manager of the TV station played bridge with my dad and suggested we go look at the building,” he said. At that time, the Arter company was rehabilitating condos in Lincoln. They went to Grand Island and negotiated a price with the insurance company that held the mortgage.
Arter’s brother and Jim owned a construction company that went to work on the building, he said.
He said a lot of the original stuff was gone when they remodeled. Originally, the hotel had a two-story lobby but the previous owner changed that and added a new second floor.
Arter said the hotel was structurally sound, but most everything else was in bad shape when they took over.
They hoisted a bobcat loader in through the window of each floor and gutted everything down to the concrete floors. There was nothing worth saving. “We basically did a gut rehab, with new everything; walls, plumbing, heating, air conditioning and electrical,” he said.
It reopened the next year as the Yancey Condos. The exterior was entirely preserved.
They opted to do an “historic certified rehab” instead of an historic restoration, but by rehabbing the building while maintaining a historic element they were able to get approval for historical tax credits from the National Park Service.
The one- and two-bedroom condos then became rental units.
“To get historic tax credits, you couldn’t own them and live in them for the first five years, so we sold them to investors, who rented them out to tenants,” Arter said.
After five years, most units were sold to individuals as owner-occupants.
He said the Arter company still owns six of the condos and manages the property for the tenant organization.
Arter said it is possible to undertake rehab projects without using historic tax credits, but the credits helped make the project economically feasible.
“The problem in a town the size of Grand Island is the rents are not high enough to support the bulk of the cost of the rehab, so the tax credits helped close that gap,” he said.
They also applied for and received TIF money to build a parking lot next to the building.
They weren’t sure if there would be a demand for the condos, but Arter speculated that in a town the size of Grand Island, surely 57 people would want to live downtown.
Prior to their renovation, local investors in the mid-1960s put money into the hotel in an effort to keep it open, but they were unsuccessful in drumming up business.
The original hotel featured a ballroom that took up one-third of a floor, as well as two elevators. Arter said the ballroom is now a community room, where residents hold events.
The two original elevators were replaced with modern equipment.
Arter also said keeping the condos marketable is an ongoing job.
Five years ago, Grand Island Contractor Jon Myers bought 20 of the condos as an investment.
Myers said he is the third generation to work on the building.
“The original owners built it, then the Arters came through when it was about ready to be torn down, and now me. It has been about 35 years since the Arters rehabbed it, so the units were in need of remodeling,” Myers said.
He said remodeling can be a little more expensive than original construction.
“Unexpected things pop up and there are always some extra hoops you have to jump through when you take on something like this. Mainly I redo what is seen — paint, flooring — and try to modernize everything,” he said. Myers has sold all but six of his units, and those are rented or leased.
Arter said it is a tough job to recoup costs and realize a profit in small cities.
“If you can sell condo units in Lincoln for $300 a square foot, you can pay for your construction costs, but you are not going to get those kinds of prices anywhere outside of a downtown metro area.”
The key to a successful project is to match the funding options with the market values.
“It is difficult to get the economics together,” Arter said. “If that wasn’t hard, someone would have done it already. Even right now, the Yancey Condos are selling for less than it would cost to do that project today.”
Myers agreed that costs to refurbish buildings constantly go up.
“It costs more every day and there are always more laws and regulations that come along,” he said.
However, building the condos was good for the community.
“Downtown Grand Island has come back to life, so there are some incentives for developers here,” Myers said. “Not an instant profit, but my kids might realize a lot from it someday.”
There is not much residential space available downtown, and there is a demand for it, he said.
“And fixed up, the tax base goes up, not many taxes were collected when it was dilapidated.”
Property Manager Wendy Alexander-Meyer said there are no vacancies in the hotel now. She said Grand Island is “booming” with a lot of young people who want to live downtown in apartments.
“If they can buy one for $50-60 thousand, it is a pretty good investment. They couldn’t buy a house for that,” she said.
She previously owned two Yancey condos.
“When I put the first one on the market, it sold within the month,” she said.
Arter said the renovation was good for Grand Island. The appreciated value is a little disappointing to him, but it has been workable, he said.
Jon Myers said it is exciting.
“I have just finished doing condos in the upstairs of another downtown building,” he said.
(This report was first published in the Bulletin’s March 21 print edition. Read it first in the print Bulletin. Subscriptions are just $38/year in Lincoln County.)