WATERLOO -- When David Deeds built a new house near downtown on East Eighth Street earlier this year it was the first new home the neighborhood had seen in more than 80 years.

Now, under a plan before the Waterloo City Council, Deeds' company, Cedar Valley Restoration and Development, is planning to create 40 more condominiums, apartments and single-family row houses to help fulfill a vision for downtown as a vibrant place where people live, work, shop and enjoy entertainment.

"We're really selling a lifestyle here," Deeds said. "If you work downtown you can walk to work, or you can walk to East Fourth Street for dinner and nightlife. The new riverwalk loop and recreational trail would be literally at your front door, and you could use it to get anywhere in the Cedar Valley or even Cedar Rapids."

A tentative site plan presented to the city shows a mix of housing options and future neighborhood retail development in the one and a half blocks between Sycamore Street, the Cedar River, the Union Pacific Railroad tracks and East Eighth Street -- just downstream from the remodeled freight depot currently housing the University of Northern Iowa's Center for Urban Education.

The eastside riverfront housing was one of two housing projects included in a downtown master plan developed by the city and Madison, Wis.-based consultant Vandewalle & Associates, with the other being a multi-story mixed-use building at the planned Cedar River Arts Mall near the Waterloo Center for the Arts.

Mayor Tim Hurley said the CVRD project is "an integral, critical element" of the overall downtown plan, which also includes a riverfront trail loop, amphitheater and dam improvements partially financed by a Vision Iowa grant, and the Cedar Valley TechWorks to provide employment opportunities in to-be-vacated John Deere Westfield Avenue site buildings.

"Everything is moving along the track we were hoping it would, and I'm happy we've got a guy like David who's somewhat of a risk-taker and entrepreneur," Hurley said. "It's also an east side investment that gets rid of blight.

"We're out there on the one hand trying to attract and retain jobs, but on the other hand we've got to have a place for them to live," he added. "These youngsters are more open to living in the urban environment David is helping to develop."

The city has already bought and relocated businesses and some railroad property in the project area, and demolition bids for the existing structures are set to be accepted Monday. State and federal grants covered the property acquisition and will be used for demolition costs.

The development agreement with CVRD, scheduled for a public hearing and approval at Monday's City Council meeting, calls for the city to donate the nearly three acres of land for $1, complete the demolition of existing buildings using state and federal grants, and proceed with "streetscaping" work along Sycamore from East Fourth to East Eighth streets.

"We're talking about lighting and landscaping as the streetscape," said Community Planning and Development Director Don Temeyer. "What we want to do is tie David's housing into the downtown."

CVRD agrees to develop at least 40 housing units at a pace of six per year, while accepting minimum assessment agreements ensuring the property value in the area grows substantially through the new construction. The total project is expected to take an area with a current tax base of $600,000 and boost the total assessed value to more than $6 million.

The city would also provide 10 years of property tax rebates for the project, although roughly one fourth of the rebates would be used to repay the city's cost of the streetscape improvements. The remainder of the tax breaks would go to the property owners, a system currently in place for any downtown development boosting the tax base.

Meanwhile, the agreement also calls for the creation of a project management team to review CVRD's final design for the buildings and grounds to ensure compatibility with the downtown redevelopment plans. It also requires a large, scenic elm tree near the former Flaherty's Lounge to remain.

Deeds said the first phase involves renovating one remaining building on the block -- a 1910 vintage, two-story brick structure -- into six or eight upper-end rental units.

"It already has a level of underground parking," Deeds said. "We're looking at loft-style apartments with high ceilings and maybe some small balconies. There will also be some community space to serve the larger project as a whole."

Future phases include condominiums and row houses.

"By doing the rental building first it will give people an opportunity to come in and try out the community -- give it a little test drive -- to see if they like it before they buy in (with a condo or house)," Deeds said.

Deeds has been getting good anecdotal information that other downtown housing, including condominiums in the Winterbottom Building and several downtown loft apartments, are attracting buyers. "This is going to be a five- to 10-year build-out with a lot based on presales and the market."

Deeds expects to have the rental building rehabilitated and ready for tenants by the end of 2006.

Contact Tim Jamison at (319) 291-1577 or at tim.jamison@wcfcourier.com.