WATERLOO -- A construction company in downtown Waterloo is planning to build a new $1.5 million office building in the heart of the city.

Cardinal Construction Inc. is working on plans to build two stories of new office space on a grassy triangular lot on Commercial Street, located adjacent to the company's offices in the Waterloo Building and across the street from the Ramada Inn. The building would share a wall with the city-owned parking ramp.

"The Waterloo Building that we're in has a good mix of businesses, and we certainly would like to think we could fill (the new building) up," said Cardinal Construction President Gene Leonhart. "We believe in downtown Waterloo or we wouldn't be here."

Leonhart said he has a potential tenant for the 15,000-square-foot building, which he can't identify at this time.

City Council members voted Monday to set a June 6 public hearing date on a proposed development agreement between the developer and the city. Under that contract, the city would donate the green space to the company and provide full property tax rebates on the development for 10 years. The city traditionally only provides full tax rebates for that length of time in its downtown business district.

The skywalk between the Ramada Inn and the city parking ramp would be maintained and would run between the Waterloo Building and the new office space.

Mayor Tim Hurley said Cardinal's announcement so soon after plans for a downtown casino less than a block away were rejected by state gaming officials was not lost on him.

"I think it's a heartening sign that we do have something down there whether we have gaming or not," Hurley said. "This is the first new office building I can remember being constructed in downtown Waterloo since Waterloo Industries."

Cardinal Construction was also the contractor when Waterloo Industries built its corporate headquarters downtown in 1999.

"I appreciate the investment by Cardinal and the faith they have in the core of our city," Hurley said, adding that Riverfront Renaissance development, new housing near the downtown on the east side of the Cedar River and general job growth in the community as a whole should only add to a downtown rebirth.

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