Renschler faces taxing times for Olde Town Center

The Olde Town Center is designed with three facades to match the character of the surrounding community. Photo courtesy of The Renschler Co. Inc.

The Renschler Co. needed a firm to do the job quickly while meeting the owners' vision for The Olde Town Center in Cottage Grove.

That firm just happened to be The Renschler Co., so they hired themselves.

Was it a confusing way to start a project? Probably. But tax laws can get confusing, particularly when it comes to a 1031 tax-free exchange. Under a 1031, the owner of a for-profit property can sell it and defer the taxes if the money is reinvested in a property with similar value within six months.

Dwight and Dale Huston, the owners of The Olde Town Center, sold a for-profit property and were looking to reinvest in the Cottage Grove site for the new center, said Kyle Dumbleton, Renschler's project designer. But they needed the new site to have similar value within six months if they were going to save on the taxes from the original sale.

So Renschler stepped in, bought the Cottage Grove property first and got to work increasing its value in time to transfer it to the Hustons within six months.

"We started with a contract to ourselves and sold it back to the Hustons prior to the 1031," Dumbleton said. "It was a big-time push. It feels good to have that part over with."

It wasn't easy. The team needed to watch the clock as it designed a three-story, commercial/residential structure. The first floor sets aside 12,500 square feet for three commercial tenants, while the second floor and part of the third floor offer 20,000 square feet for 19 residential units (the project cost wasn't disclosed).

To stay ahead of schedule, Renschler turned to Revit, a building-information modeling program, for the design. The 3-D modeling gave the owners an early view of a building that would match the project requirements and blend in with the traditional Main Street elements of the area, Dumbleton said.

"That enabled us to get ahead as far as we needed to be," he said. "It allowed us to move through the design fairly quickly and getting early 3-D renderings was absolutely crucial in this process."

Renschler enters April with the 1031 requirements met and the project under the Hustons' ownership. The team is erecting the first level of steel and then plans to flip-flop the construction process between precast decking and structural steel for the level above.

"The fact that this is a mixed-use building," Dumbleton said, "really requires a balance to get all the parts and pieces working together - choosing the correct construction technique and combining the aesthetics to make a building that works together."

- Chris Thompson