Terex heading to The Fountains after all

Tax increment financing will not be used

Terex has signed a lease to move into the latest office building erected in The Fountains. (Courtesy of Pivot Real Estate)
Terex has signed a lease to move into the latest office building erected in The Fountains. (Courtesy of Pivot Real Estate)

CEDAR RAPIDS — Terex Corp. has signed a multiyear lease to move its remaining 35 local employees to The Fountains in northeast Cedar Rapids this spring, a little over two years after a deal had appeared to fizzle.

The heavy machinery equipment manufacturer plans to relocate its engineering design, parts and sales support staff from 909 17th St. NE to The Fountains, an office and retail center northeast of Highway 100 and Edgewood Road NE, according to Craig Byers of Pivot Real Estate and Eric Cohen, senior vic president, secretary and general counsel of Terex.

Terex is expected to take possession around March 1.

“It’s always nice to land tenants and keep high-paying jobs inside Cedar Rapids,” Byers said. “They are going to be a good, long-term, viable tenant for the landlord, and with what we are trying to create at The Fountains, they fit right in.”

The 8,637-square-foot space is about one-third of the first floor of a recently completed, 50,000-square-foot, two-story office building, Byers said.

Byers described the space as high-end, class A office space designed for 35 to 40 people that will include a small research and development area.

Terex does not have plans to add employees at this time, Cohen said.

The building is the fifth of a planned six, and the second of three planned office buildings. The Fountains has restaurants, a fitness center, spa, retail offerings, some larger office tenants and parklike amenities with outdoor seating.

In 2015, Terex had requested public incentives from Cedar Rapids as the company considered The Fountains or the old Berthel Fisher location in Marion. The Marion location came fully furnished, although Marion was not offering incentives.

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City staff had recommended, with conditions, negotiating a $506,000 development agreement that would reduce the rent and provide new furniture for Terex. At a meeting in December 2015, then-Mayor Ron Corbett and City Council member Scott Olson sparred over the plan.

The City Council had already supported a five-year, 100 percent tax break in 2012 for each new building in The Fountains, worth an estimated $3.7 million, so this would essentially be a double subsidy, some felt. Olson, a commercial broker, considered the second giveaway too generous and would create unfair competition in a market with ample vacant office space. It also would not create new tax base, which would set a bad precedent for tax increment financing, council members said.

Corbett, touting an “open for business” mantra, championed the subsidy, saying it was necessary to keep Terex and its 50 jobs in Cedar Rapids. The council voted 5-3 to allow the city to negotiate, but the matter never resurfaced.

Olson explained the deal vanished because it was clear the majority of council would not support it.

“I am very pleased they decided to stay in Cedar Rapids and relocate to The Fountains,” Olson said. “I am glad it worked out.”

Cedar Rapids is not providing subsidies this time around, said Byers and Caleb Mason, an economic development analyst for the city.

Mount Mercy University bought the Terex property at 909 17th St. NE property for $200,000 in January 2017 and has been expanding its athletic campus nearby.

Terex came to the Cedar Rapids market in 1999 after buying Cedarapids Inc., which opened in 1923 and which, at one time, provided 900 jobs. In 2009, Terex announced plans it would end its manufacturing operations and eliminate 170 local jobs, leaving 50 engineering jobs.

l Comments: (319) 339-3177; brian.morelli@thegazette.com

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