While recent months have seen continued change to the downtown Iowa City landscape, one restaurant with local roots has decided to go against the redevelopment grain.

Following aggressive historic rehabilitation and modernization efforts at its corporate flagship restaurant, Panchero’s Mexican Grill, 32 S. Clinton St., will opt out of turning its upper building floors into office, residential, or retail space.

Instead, the company has chosen to make way for additional storage space.

The move by the Coralville-based company signals a reverse approach to several projects that have or will come to fruition recently in Iowa City’s core.

As a part of the city’s on-going city and business-improvement partnership, Building Change, the company received a $19,857 grant for a $66,190 project that has brought about circa 1800 ceiling restorations, additional windows, seating, and historic brick enhancements to the exterior and to the first floor interior.

What is surprising to some is that the restaurant has chosen not to pursue additional outlets of revenue above one of the most heavily traveled pedestrian corridors in Iowa City.

Leah Cohen, the owner of Bo-James, 118 E. Washington St., and Vera Gross, the owner of the Grossix Building, 30 S. Clinton St., are just examples of business people who have been in the process of bringing new life to their above ground-floor spaces.

Both Cohen and Gross chose to redevelop their upper two floors for modern apartments or condominium units targeted at the young professional, workforce housing market.

Residential units in the Grossix Building alone will command $2,000 and $2,300 a month rent.

“Wth the renovation, we actually gained more seating by taking off the stairs [to the upper floors],” Reid Travis, Panchero’s director of marketing communications said.

Without the stair presence, he said the restaurant was able to be reconfigured to grow its seating capacity, allowing the upper floors to be sealed off to the general public.

Travis said the decision to end what was for years additional seating for the burrito-craving masses was not for a decline in store revenue but rather to improve the flow on the main level.

And beyond the use of storage space for the restaurant, no long-term plans have been set in stone for a different business or housing use, Reid said.

Wendy Ford, the city’s economic-development coordinator, said although Panchero’s was notified that the Building Change grant would in fact apply to potential leasable space such as apartments or retail space, she was unsure as to why such plans did not come to pass.

Because discretion is left up to the building’s owner, she said the city cannot force businesses to renovate above ground spaces, only encourage the practices.

“I wouldn’t say it’s disappointing, because [Panchero’s has] taken the first step in separating the first floor,” she said, noting that future business endeavors may prove to be easier now that the building has been sectioned off.

Ford said that although it has taken several years to see changes, the market for redevelopment of the upper floors of buildings downtown has gained footing.

She pointed to the recent restoration of the former Vito’s building, 118 E. College St., which now houses Velvet Coat and Modus Engineering and will soon include FilmScene’s Scene 1 as an example of that movement.

Further, upscale living spaces remain in demand.

“It’s not like there’s a line at a food bank looking for the next available square foot [of space downtown], but with the new floors in Park@201 being highly sought after, I’m extremely encouraged by the interest in the office sector,” she said.

For one University of Iowa official, however, the move by Panchero’s isn’t adding up.

“What it’s showing you is the value of the property per square foot is increasing,” UI economics lecturer Patrick Barron said about the new upper-floor redevelopment projects taking place downtown.

“If you turn it into offices or apartments, retail space, it’s going to start producing more value.”

While it is difficult to identify how large the market downtown is for above-first-floor use, he said, it is likely downtown visitors will see new construction buildings take a back seat to historic properties.

And although Travis maintained that the move to eliminate the restaurant’s above floor spaces was not for a decline in store revenue, Barron disagrees, noting that the space above the popular restaurant is too valuable to sit underutilized for long. “It’d be very surprising if they don’t [develop it] at some point.”