Escalating construction costs have prompted Cedar Rapids’ NewBo City Market to scale back its Next Level Local expansion plans.
“We’ve made major modifications to the project, just doing the fiscally responsible thing and what’s right for the Market,” said Joana Karl, chair of the board that manages the nonprofit.
Ms. Karl said work will begin this spring on a more modest remodeling project at the Market, which opened in 2012. The work, planned for completion in October, will cost about $1.5 million.
“We are flipping the bar and the coffee shop for better traffic flow,” Ms. Karl said. “The whole first floor will be remodeled, we’ll have new furniture, a new kitchen that should be a revenue generator.”
Announced in May 2024 with a $6.1 million budget, the Next Level Local project would have included a mezzanine level with outdoor patio space, coworking lounge, podcast studio, mental health clinic, food production kitchen, neighborhood grocery store and an indoor stage for live events.
The mezzanine would have added about 9,000 square feet to the present 21,000 square feet.
Eliminating the mezzanine brought most of the cost savings, said Ms. Karl, who met with major project donors Tuesday night.
“We have received overwhelming support,” she said. “Nobody is going to advise us to spend money we don’t have.”
Ms. Karl said the board decided scaling back the project was preferable to seeking more funds.
“I don’t think it would be fair to go back to the donors and say we need more money,” she said.
Instead of a small full-service grocery store that would have addressed NewBo and Oak Hill-Jackson residents’ lack of a grocery store, the new plan includes a “fresh-produce convenience store” operated by Market staff.
“That’s not your grocery-shopping destination, but it will fill that void for the neighborhood,” Ms. Karl said.
The original project received grants of $1.3 million from the U.S. Commerce Department’s Economic Development Authority (EDA), $458,767.90 from the U.S. Department of Agriculture (USDA), $30,000 from the National Endowment for the Arts, and $800,000 from the Hall-Perrine Foundation. The city pledged $100,000 from its hotel-motel tax fund.
Ms. Karl said the Market will return the EDA grant, which would have funded much of the mezzanine addition.
“They were surprised,” she said. “We are still talking to Hall-Perrine. We most likely will not need the full $800,000.”
Construction was delayed by uncertainties over Trump Administration executive orders that paused federal funding sources. Redesigns prompted by higher costs further delayed the start of work, prompting the board’s decision to reduced its scale.
“Our second set of bids came back over budget by quite a bit, over $1 million,” Ms. Karl said. “Tariffs were a big part of this. The price of everything skyrocketed. This is the economically prudent thing.”
Attendance at the market remains healthy, Ms. Karl said.
“Attendance has been up,” she said. “We’ve had to put some events on hold due to the construction. The new version will cause the least disruption to our shopkeepers and shoppers.”
The NewBo City Market also plans to add shuttle service to and from the casino under construction in northwest Cedar Rapids, set to open at the end of the year.
This is a developing story.
