The downtown Maple Heights apartment renovation, which received state grant funding, is now facing foreclosure, despite city officials saying the residential units were completed and occupied.
The project, located at the corner of Seventh and Main Street, received a $600,000 grant from the Iowa Economic Development Authority (IEDA) to support the creation of upper story housing. The city served as a pass-through for the funds, overseeing administrative filings and disbursement, but did not originate the grant.
“Once the grant was closed out and the funds were dispersed, our responsibilities were taken care of at that point,” City Administrator Brock Waters said. “As of right now, there’s not really much that we have to do with any of it between First Citizens Bank and Bridge Investing LLC.”
Mayor Steve Cooper echoed the sentiment, saying the city's role in Maple Heights was limited to ensuring the grant administration was properly handled.
“We tried to do our best to pass along funds at the appropriate time,” he said. “Once we got them, we turned them around as quickly as we could to make sure the developer could get their funds to whoever, whether it was paying contractors or paying the bank.”
Bridge Investing’s partial owner, Heather Davis, said Maple Heights faced unexpected challenges with the bank that contributed to delays, including issues with contractor direction and material selections.
“We completed the renovations, but the bank’s involvement in decisions slowed down the project and caused uncertainty,” Davis said.
The city's involvement also included periodic walk-throughs of the property to monitor progress. Waters said the developer was “very open about the project and the progress that was being made,” and the city was generally satisfied with the transformation.
“It was cool to see, from what it was when I first came here, there was a lot of work ahead of them,” Waters said. “As things went through and the project progressed, it was really cool to see just the transformation over those couple of years.”
Despite the project's completion, financial legal issues between Bridge Investing, and First Citizens Bank have led to the current foreclosure. Waters and Cooper said the city was not consulted before foreclosure was filed.
“There wasn’t anything we could do about it. It was between those two parties,” Cooper said.
The Maple Heights Apartments, however, are at least partially occupied, with eight of 12 units being rented out.
The state grant had been structured with progress and completion disbursement, which Waters said were administered as required.
“There was a 50% disbursement and a final completion disbursement,” he said. “Once [IEDA] completed their review, they dispersed the funds to the city. The city then turned around and wrote a check, and then applied it to the project.”
According to Davis, construction was halted from March 29 to June 12, 2024, while Bridge Investing waited to learn whether the construction loan with First Citizens would be extended. This left contractors hesitant to return amid uncertainty over when funding would be available. Although First Citizens Bank filed for foreclosure in May 2025, Davis said the project did not receive the delayed state funds until Sept. 2025, further complicating refinancing.
The project also included a $250,000 forgivable mortgage tied to the grant. Waters said the city's role was secondary.
“It was just a lien on the property like any mortgage would be, but we weren’t primary. We would have been a secondary lien holder. If anything were to happen to the property, that mortgage would have been reimbursed upon the sale.”
The city has not been involved in the bank’s interactions with contractors or decisions related to material selections. Cooper said he has not seen a situation like this in his decades of city government experience.
“This is about the only time I can remember that we had a situation like this,” he said. “We were the pass-through for the money, and that was about the responsibility that we had.”
Heather Davis, a member of Bridge Investing LLC, said that during the Maple Heights project, decisions about certain materials—like flooring—were changed by the bank without her consent.
“They went over my head to pick out the flooring for the complex,” she said, describing a situation she called frustrating and disempowering. “I had selected the materials to meet both quality standards and budget goals. The decisions slowed the project and created uncertainty with contractors.”
From the city’s perspective, officials said they were not aware of the bank’s involvement in selecting materials.
City Administrator Brock Waters said flatly, “No,” when asked whether the city knew the bank had directed contractors or revised materials.
Davis said that during the Maple Heights project, she had limited legal support, noting that “most legal regional attorneys represent the bank or don’t have the capacity,” leaving her without representation to respond to certain disputes.
Looking ahead, city officials said they do not anticipate the foreclosure affecting future grant opportunities in Osage or Mitchell County.
The project’s location is at a major downtown intersection, making the city eager for its success.
“The city was tickled that somebody was willing to step up and try to remodel it and save that building,” Cooper said.
Waters emphasized that the city’s goal was simply to ensure the project could succeed administratively.
“There are cool apartments up there, which is great, and hopefully there’s potential in the commercial spaces on the main floors too,” he said.
Attempts to obtain a comment from First Citizens Bank regarding the foreclosure were declined. Julie M. Bauer, the bank’s marketing officer, said, “First Citizens Bank has been advised by counsel not to comment on pending litigation.”