A development agreement for a portion of the long-vacant former Transamerica site in northeast Cedar Rapids was approved by the Cedar Rapids City Council Tuesday, March 24, despite continuing concerns raised by neighbors and an opposing vote by Cedar Rapids Mayor Tiffany O’Donnell.
Under the agreement for the site near the corner of Edgewood Road and 42nd Street NE – now known as Edgewood Pointe – EOP Development and developer Kerry Panozzo are planning a $40 million investment for a mix of up to 10 commercial lots on the northern and eastern portions of the property, along with renovation of the two existing commercial towers on the site.
The developer also will construct public streets in the development, which will be dedicated to the city by December 2027.
Construction is proposed in phases, beginning in December 2027, with projected completion by May 2035.
Under the agreement, the developer will also provide a minimum of 100 new full-time jobs and retain 40 existing jobs, mostly from the current operations of CR Prep and Regus in the existing towers.
The 100 new jobs cannot be relocated from within Cedar Rapids, Linn County or contiguous counties to satisfy the requirement, development officials said.
The overall 40-acre property was purchased at auction in July 2022 by an investment group for $7.02 million.
The plan does not include an 18.79-acre tract on the western portion of the site. CR Prep has been negotiating with EOP Development to purchase that site for construction of a new school, but an agreement hasn’t yet been reached.
Agreement also includes potential tax rebate
The agreement — which council members noted was at least the fourth time the site had come before the council in some form — also includes a 10-year, 50% tax increment financing rebate, structured around the developer meeting specific construction and job creation benchmarks. City staff said the project is expected to generate approximately $18 million in total property taxes over the incentive period, with roughly $7 million rebated to the developer.
City staff described the development agreement, and its associated urban renewal agreement, primarily as a financing tool, noting its purpose is to allow the developer to secure bank financing and market the property to prospective tenants and buyers.
“What I’ve understood from the developer is this is just the assurance that the city, assuming he holds up his end of the bargain, that we will participate in the way we’ve said we would,” said Cedar Rapids business attraction project manager Scott Mather. “I expect the first step will be that he will begin the process of the internal streets first, and make it more developable appearing to potential users.”
Latest plan for long-vacant site
The former Transamerica site has sat essentially vacant since 2016, when Transamerica moved its operations to a new campus on C Street SW.
Two buildings on the southern portion of the site were heavily damaged in the 2020 derecho and were subsequently demolished in 2021, but two large, modern office buildings on the northern portion of the site are still standing and will be renovated as part of EOP Development’s plans.
Residents and council members alike raised pointed questions at Tuesday’s meeting about traffic impacts, particularly a possible roundabout at the intersection of 42nd Street and Georgia Avenue – one of many available tools to handle increased traffic.
“I don’t know how a roundabout on 42nd Street is going to work,” said council member Marty Hoeger, who represents the district that encompasses the Transamerica site. “At that stoplight, all the traffic backs past the first entrance every day. Roundabouts are made to move traffic, and this will be a nightmare.”
Mr. Hoeger also flagged Ushers Ferry Road — an unimproved road without curb and gutter near Xavier High School — as a likely cut-through route for drivers trying to avoid congestion, raising questions about downstream infrastructure impacts.
Concerns expressed about developer, communication
Several council members pushed back on the developer’s level of community outreach, noting that while a required neighborhood meeting was held, it occurred approximately two years ago.
“Fulfilling a requirement and actually having open and constructive dialog are two different things,” said council member Ann Poe. “I heard some great suggestions here tonight from the neighbors, and I would encourage this developer to have another neighborhood meeting and to sit down and listen to them. I would hope by the time it comes to the second reading, he’s had another neighborhood meeting.”
Cedar Rapids Mayor Tiffany O’Donnell expressed reservations about extending a financial incentive for the site, calling it a prime corner in a strong part of the city and suggesting the location alone should be sufficient to attract development without public subsidy.
“I know exactly what that property is worth. I know exactly the value of that part of town,” Ms. O’Donnell said, adding, “I have trust issues with this developer.”
Other council members defended the incentive structure as standard practice and argued it was the city’s primary mechanism to hold developers accountable for their plans.
“This holds him accountable to do what he says he’s going to do, or he doesn’t get funding,” council member Scott Olson said. “Right now it’s not in safe hands if we don’t do this development agreement — he could do the bare minimum and do a less quality development here, and we cannot say a word about it.”
Council member Dale Todd echoed that the TIF rebate does not represent a direct city expenditure.
“It’s not like we write a check to a developer to do it,” Mr. Todd said. “The development agreement simply is so that he can go to a bank, and the bank has to sign off on it, too.”
One council member raised the question of whether the development agreement was premature given the unresolved questions, but the motion to approve ultimately passed on a voice vote, with Ms. O’Donnell casting the lone vote in opposition.
Plan comes after several previous development plans
The plan from EOP Development Group, led by Mr. Panozzo – who didn’t attend Tuesday’s meeting – is the latest in a series of efforts to redevelop the former Transamerica site.
The property was previously under contract to purchase on two occasions since Transamerica’s departure – first by Hunter Companies, then by Edgewood West, a group of local investors. The deals fell through on both occasions.
A previous plan for the site showed a mix of commercial and residential developments. The new plan includes no residential elements.
Neighbors seek input through discussions
Neighbors around the site have expressed concerns about traffic, possible tree removal and other issues on several occasions as the various development proposals have surfaced.
Dave Watson, who lives near the site, founded a Facebook group called “42nd and Edgewood Save Our Neighborhood.” He acknowledged that redevelopment of the site is inevitable, but continues to express reservations about the current plans.
“We’re not opposed to development,” Mr. Watson said. “We just want something to blend, and we’re eager, and we have been patiently trying everything we can to sit down with the developer. Hopefully (he) will sit down with us and listen to what we have to say, and maybe include some of it, so that it looks like we’re all part of a big package – not just a commercial development shoved in a residential area, but one that blends with the residential area, so it looks like it’s all cohesive.”
He noted that neighbors have attempted to reach out to Mr. Panozzo, but have been largely unsuccessful.
“There’s been no contact whatsoever,” he said. “There were people there (Tuesday) night that said that they’ve tried and tried to reach back out with him. They were willing to make a purchase [of land adjacent to their homes]. Just nothing.”
Mr. Watson said he would prefer to see a plan that incorporates more green space, minimizes extraneous lighting and moves traffic away from 42nd Street and onto Edgewood Road and North River Boulevard.
“”Leave some green space so that it’s warm and inviting and people want to go — not just a big concrete jungle,” he said. “Most of the upper-scale places that you really want to go have a lot of landscaping and green space.”
Mr. Watson also said his group will remain active as plans for the site continue to unfold.
“Between email and Facebook, we have over 1,000 people that are interested in what’s going on,” he said. “The group is not planning on going away. Like the city council suggested, we’re still trying to do everything we can to reach out to the developer to sit down with us and continue to try to make the property an amazing development.”
