The Budget Inn located at Business Highway 30 and South Broadway was ordered boarded up in November, 2013, because of safety concerns of the Toledo City Council. It has three separate motel unit buildings on the 2.5 acre site. Chronicle file photo

Hopes to build a 24-unit apartment complex on the site of the closed Budget Inn in Toledo were dashed when the Iowa Housing Authority awarded the lion’s share of $51 million in grant money to Iowa’s largest and mid-size cities.

Bob Rafferty, attorney for West Des Moines property development company Newbury Living, said in an email to Toledo Mayor Dave Svoboda and City Clerk Janet Kriegel he would forward more information when it is determined how the Budget Inn project “scored” in consideration for a grant.

Rafferty said he was informed by the Iowa Department of Economic Development the Toledo plan “met qualifications” but “there were insufficient dollars to fund all the projects.”

The money, in the form of Community Development Block Grants, was part of federal funds aimed at recovery from the flood damage the state suffered in 2008 to replace housing.

Mayor Svoboda told The Chronicle on Monday, “I was disappointed and really shocked” at the result “and I think everybody was.” He said he expects the city to still explore possible options for the deal.

The Budget Inn property occupies 2.5 acres at Business Highway 30 and south Broadway in Toledo.

In a news release the Iowa Economic Development Authority said it awarded the money to 21 multi-family new production projects.

The apartments planned for the Budget inn site were in response for housing needed for employees of the recently opened Iowa Premium Beef plant in Tama. In the first phase of employment some 600 are planned to be hired with the employment to grow to 1,000.

Company officials have expressed to the cities of Toledo and Tama the need for more housing in the area.

An option to purchase the Budget Inn by Newbury Living the Budget inn site from owner Hetal P. Rasania was reported accepted in September, 2014 at a price of $130,000. The deal depended upon the approval of CDBG funding.

Toledo City Council members had approved adding the location to the city’s urban revitalization area in December and previously had voted to rezone the land from commercial to multi-family residential.