In 1894, it was decided that Grace Church needed a new and larger church. Under Rev. Lewis Thurber Guild the church became a center for civic and religious gatherings.

The pastor appointed a committee of five members charged with the duty of formulating definite plans for a new church building. The old frame building had been there for 15 years.

The Grace Church neighborhood extended in all directions from the corner of 19th and Crocker. This included the Sherman Hill area to the south, which was filled with large beautiful homes. A streetcar line passed through the corner of 19th and Crocker, and extended to the University Place and Drake University.

The church was dedicated on January 26, 1902. Despite a terrible blizzard the new church was filled to capacity morning, noon and night. Pledges were taken for the remaining monies owed for construction of the new church, and by the end of the night there was over $2,000 in surplus pledges taken.