BAE plans $139M defense facility in SW Cedar Rapids

By CBJ News Staff
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BAE Systems and Ryan Companies are proposing a $139 million classified defense facility in southwest Cedar Rapids that will consolidate military GPS manufacturing operations that Collins Aerospace has long operated in Coralville and Cedar Rapids.

Ryan Companies proposes to develop a 200,000-square-foot building on a site at the southeast corner of Sixth Street and 76th Avenue SW, which is on the opposite side of I-380 from Prairie High School. BAE Systems, which is in the process of acquiring the military GPS business from Collins Aerospace, proposes to have 650 full-time equivalent positions at the facility.

The Cedar Rapids City Council will consider the first steps toward a big incentive package for the project at its virtual meeting on Tuesday, including authorization for city officials to negotiate a development agreement and support for state financial incentives. BAE and Ryan Companies will seek a 20-year, 75% property tax exemption under the state’s High Quality Jobs incentive program, a state RISE grant for unspecified off-site improvements, and a local tax abatement subject to maintaining specified employment thresholds.

The proposal calls for work on the project to begin in October and be completed in September 2022, pending the necessary state and local approvals, according to a memo to the city council from Caleb Mason, economic development analyst in the city manager’s office.

Collins Aerospace was required to sell off the profitable military GPS business to satisfy antitrust concerns surrounding the merger of its former parent company, United Technologies Corp., with Raytheon Technologies, which also has a military GPS business. Products range from handheld GPS devices used by ground troops, to embedded GPS devices used in aircraft, ships and ground vehicles.

BAE, which is based in Farnborough, England, reached an agreement with former Collins Aerospace parent company United Aerospace to acquire the military GPS business in a $1.92 billion deal. The business began in Cedar Rapids and has long been located in the Corridor. BAE said at the time that it planned to maintain operations here rather than relocating or leaving behind hundreds of employees.

About 675 employees worked in the business at the time the deal was announced, the vast majority of them already located in Coralville or Cedar Rapids. However BAE’s consideration of other potential sites for the project outside Cedar Rapids is the main rationale for employment-based incentives to develop the project locally.

Separately, the city council will consider a resolution of local support for state incentives for a $15.9-million expansion project for JRS Pharma at 725 41st Ave. Dr. SW. The project calls for a 9,200-square-foot production facility and associated tank farm. It will create an estimated 18 jobs.

The projects are to be considered by the Iowa Economic Development Authority Board on July 17. CBJ

CORRECTED 7/13/20 2:30 p.m.: This story has been updated to remove an incorrect reference to the Cedar Rapids Metro Economic Alliance in relation to the BAE project.