Cedar Rapids supported more economic development deals in 2012, mayor says
Corbett: Look for more big deals, similar to Westdale, in 2013
Mayor Ron Corbett says a giant change has taken place at Cedar Rapids City Hall in 2012, and you might have missed it.
The City Council, he says, has turned its focus from investing public dollars to renovate and replace public buildings in the wake of the cityís historic 2008 flood to providing incentives for private-sector investment in the city.
"Itís been really a phenomenal shift in what our agenda was dominated by to what our agenda is dominated by today," Corbett says. "Now weíre working on development agreements with private companies. Thatís whatís dominating our council agenda every week. And these private-sector investments that are taking place are pretty significant ones."
The latest came on Dec. 14 when local Realtor Scott Byers announced that he and a group of investors are buying the long-troubled, half-empty Westdale Mall and developer John Frew announced that he will demolish most of the mall and invest at least $90 million to build a "multiuse destination and neighborhood" with housing, office, stores, restaurants, trails, a park and a hotel.
"People might have thought that someone at some point might spend $10 million to $15 million for a mall makeover, but the fact that itís going to be a complete master plan and $90 million is kind of eye-popping to a lot of people," the mayor says.
These days City Hall ends up in the middle of notable private-sector commercial investment because investors have come to insist on city incentives. In Cedar Rapids as in many Iowa cities, the incentives typically consist of a reimbursement of property-tax revenue to the developer for a number of years, revenue the city would not be taking in but for the new investment.
Corbett notes that the need to do something about the failing Westdale property has prompted the city to extend the property-tax incentive ó called tax increment financing or TIF ó for the Westdale project to 12 years, which he called "unprecedented" for the city. "Normally, we donít go out that far," he said.
Two weeks before, the council approved a five-year TIF incentive for developer Joe Ahmannís $34-million upscale office and retail project, which he calls The Fountains and which he will build on 19 acres east of the Transamerica campus at Edgewood Road NE and Blairs Ferry Road NE.
On the same day, the council also approved a 10-year TIF incentive for developer Fred Timko, whose project across the Cedar River from downtown will consist of the renovation of both the flood-damaged and historic Louis Sullivan-designed bank and the office tower next door and the construction of a residential condominium next to the bank.
In November, the council signed off on another economic-development incentive when they agreed to sell Penford Products Inc. the city park next door to allow the company to pursue a plant expansion.
Corbett adds to the list the City Hall incentives provided in 2012 to developer Steve Emerson, who just opened his new three-story office building at 600 Third Ave. SE, and to Intermec Technologies Corp., which is building a new building at 601 Third St. SE.
Corbett also pointed to a $20 million investment by Cargill in its Seventh Street NE plant and to Raining Roseís new plant on what had been a vacant industrial site at 3015 First Ave. SE.
In addition, he notes that the city is seeking proposals for two commercial sites in New Bohemia, the former Iowa Steel site and the site that had housed Brosh Funeral Chapel. Geonetric Inc., a local health care software and services company, said in November that it is interested in building a new facility on the Iowa Steel site, and Corbett said there is at least one significant development proposal for the Brosh site.
"There is an excitement in Cedar Rapids. Cedar Rapids didnítí become a dead zone after the 2008 flood. The tax base is growing, more jobs are being created," Corbett says.
The mayor suggests that the private-sector investment is coming, at least in part, because the City Council was willing "to stick its neck out" and take on some public-spending projects like the new convention center and the cityís purchase and renovation of the downtown hotel next door.
"Those were not Ďslam dunks,í" he says. "They came with some controversy. But we believed in this community enough so we were willing to step out and explain why the public-sector investment was critical."
Corbett says that kind of City Hall risk-taking has not gone unnoticed by the likes of Byers, Frew, Timko and Emerson and companies like Intermec, Raining Rose and Cargill.
"Theyíve taken notice of what Cedar Rapids has done, to the point where they believe in Cedar Rapids and they now are making multimillion investments here," the mayor says. "And I donít know if we would have seen the private sector doing that amount of investment it is doing today if there had not been some of that public-sector investment."
Corbett says Cedar Rapids is different today than it was in the months after the 2008 flood when he says the city was "kind of kicking the dirt little bit and had its head down." The city is flush with a "quiet confidence," he says.
Corbett credits the experience of Jeff Pomeranz, Cedar Rapidsí city manager, with helping to bring together the economic-development deals that the city has seen in 2012. Economic development, the mayor says, is Pomeranzís "wheelhouse," and he says itís why city hired him away from fast-growing West Des Moines in 2010.
"Economic deals is really who Jeff is," Corbett says. "And his position is always, ĎDrive the best deal for the city, but get the deal done.í"
The coming year, 2013, is a City Hall election year and Corbett is seeking a second, four-year term.
The cityís mayoral legend, Don Canney, nearly always had a substantial economic development announcement at the approach of elections, which were held every two years in his time as mayor from 1969 to 1992."There will be deals in the pipeline that will be as significant if not greater in 2013 than we had in 2012," Corbett promises.