MidAmerican Aerospace seeks tax break

A Cedar Rapids aircraft parts supplier is asking the Cedar Rapids City Council to approve a property tax break for remodeling of the former Kmart building in southwest Cedar Rapids.

MidAmerican Aerospace, 280 Blairs Ferry Rd. NE. purchases and dismantles retired aircraft and sells or leases their engines and parts of the aircraft that are replaced periodically, overhauled and returned to service.

The city council on Tuesday set a July 14 public hearing on the company's request for an urban revitalization property tax exemption designation for the proposed renovation of the 120,000-square-foot building at 2727 16th Ave. SW.

The $5 million project qualifies for the city's commercial reinvestment program.MidAmerican Aerospace will move its corporate headquarters and production to the new location.

Documents filed with the city call for 10,000 square feet of office space, 6,000 square feet for an employee fitness area and the remainder of the building to be used for processing, imaging and a climate-controlled room for avionics and other sensitive equipment.

The partial tax exemption would be a 10-year, declining scale exemption averaging 44 percent per year, applied only to the increased property valuation. The 2015 assessed value for the property is $2.6 million.

Based on the scope of the proposed project, the increased assessed value for the facility is estimated at $3.5 million. The renovation would generate an additional $133,000 in property tax revenue annually.

Over a 10-year period, $744,800 would be collected in tax revenues and $585,200 would be deferred as tax exempt.

John Huey, MidAmerican Aerospace managing director, said the company's existing building has just under 20,000 square feet of warehouse and inventory storage space. Huey said the new building will more than quadruple that area, enabling the company to handle more parts for larger airliners.

'The landing gear are three times as big as what we have been handling,” he said.