A pair of new warehouse development projects in southwest Cedar Rapids are expected to bring dozens of new jobs – and new economic development opportunities – to the community.
The Cedar Rapids City Council agreed this week to approve resolutions of support for standard financial incentives to both projects under the city’s Master Plan Development – Economic Development program.
One project, being developed by 380 Commerce Park LLC, comprises a $15 million investment on a 19-acre site south of BAE Systems, between Sixth Street SW and Interstate 380. It includes three commercial buildings – two 50,000-square-foot warehouses and a 120,000-square foot warehouse.
Expected to create 50 new jobs, the project will begin construction in March and be completed by March 2030. It will receive a standard financial incentive of a 10-year, 50% rebate of increased taxes generated by the project. In this case, the project is expected to generate $5.8 million in new taxes over 10 years, of which $2.1 million will be rebated to the developer.
The second project, being developed by 1145 Industrial Avenue LLC, comprises a $21.5 million investment on 19 acres east of Edgewood Road SW and south of 64th Avenue SW, near the planned Google data center project. It includes a total of nine commercial buildings – seven 11,000-square-foot warehouses, a 70,000-square-foot warehouse and a 60,000-square-foot warehouse.
This project, which is expected to create 80 new jobs, will also begin construction in March, with completion set for March 2031. Under standard financial incentives, the project qualifies for a 10-year, 50% rebate of increased taxes generated by the project. In this case, the project is expected to generate $7 million in new taxes, of which $2.4 million will be rebated to the developer.
Economic development coordinator Scott Mather said the projects are important for the city’s economic development because they will offer warehouse sizes not readily available in the community.
“On a monthly basis, if not more often, the economic development team receives inquiries from outside companies, or even local companies looking to expand,” Mr. Mather said. “A lot of times they want something that’s available that they can move into in relatively short order and not have to wait for the construction cycle to occur, and we’ve had to respond back on a few recently where we really don’t have a lot of options currently available. So having some of these in place, we feel, will really be a way to provide for growth in our community, where companies can choose Cedar Rapids and get in relatively quickly.”
Mr. Mather also noted that the city’s financial incentives for projects like this include an employment threshold requirement.
“We have a process for an annual certification of employment,” he said. “We reach out and require the developer or company, whoever we have that development agreement with, to show proof of how many employees on average that they have on a monthly basis for the prior 12 months. And depending on the language of the development agreement, if they don’t meet that threshold, they may not be eligible for that year’s incentive.”
While voting with the council to approve the incentives, councilmember Dale Todd sounded a note of concern about the rapid growth of similar commercial projects in the city’s southwest quadrant.
“I want to make a little bit of an analogy to what happened out on 33rd Avenue (SW) when we created (the) hotel district,” Mr. Todd said. “That happened organically on its own to a degree, and we really didn’t have a master plan (about) how things were going to fit together, what type of infrastructure was going to go in, where the sidewalks were going to connect. And so now, since you’re starting to get a little bit more mass out there, it’s probably time to step back and say ‘how are we going to connect all these campuses together so that they make sense?’ Where are you going to put the stores, the commercial piece for people to eat lunch, if they want to walk around a pond, or something along those lines. Maybe it’s now time to start thinking about a little bit of a master plan.”
Both projects are expected to return to the council in March for approval of formal development agreements.
The council also approved financial incentives for a reconstruction project at 2055 North Towne Lane NE, an industrial building that formerly served as a warehouse for RS Hanline, a produce wholesaler.
The building was heavily damaged in the 2020 derecho and has since sat vacant. Neighbors had expressed concerns about the safety of the building, which has “unfortunately resulted in repeated vandalism and trespassing,” Mr. Mather said.
The $1.25 million project includes renovation of the 62,000-square-foot building, including replacing the roof, broken windows and damaged siding, and new electrical service.
Construction is expected to begin in April and be completed by December, creating 10 new jobs. The project is being pursued by Cedar Rapids Industrial Property LLC. It qualifies for standard city incentives under the Brownfield/Grayfield – Economic Development program, which authorizes a 10-year, declining scale exemption of increased value and taxes created by the project. The project is expected to generate $815,000 in total taxes over 10 years, of which $245,000 will be exempted.
Council member Ashley Vanorny said the building represents the long-term impacts of large-scale disasters such as the 2020 derecho.
“Just because it may not be making the news anymore, it doesn’t mean that it’s not still ongoing,” Ms. Vanorny said. “Almost five years later, this is still something that we’re reeling from. I’ve passed by this many times and wondered what was to come of it. I appreciate the city’s efforts to find something for this to be used for, and I know that it’s not an easy process.”
