116 3rd St SE
Cedar Rapids, Iowa 52401
Cedar Rapids projects get $3.4 million boost from state workforce housing tax credits
Other Corridor projects awarded incentives in Marion, Tiffin
Several housing projects in the Corridor will get a boost from workforce housing tax credits recently awarded by the state — adding 458 residential units in the area, with Cedar Rapids projects driving the influx of housing.
Gov. Kim Reynolds and the Iowa Economic Development Authority recently announced $38 million in workforce housing tax credits across 59 statewide housing projects, supporting the creation of more than 2,000 residential units in Iowa, according to a news release.
“When Iowans have the opportunity to live where they work, our people, communities and businesses thrive,” Reynolds said in a statement. “Building a strong continuum of housing across the state supports our workforce, attracts new residents and grows our economy.”
Six Cedar Rapids projects were awarded $3.4 million combined, supporting 320 new housing units — more than any other city received in value, and equal to Des Moines in number of projects. The awarded projects in Cedar Rapids include:
- First and First West: The $967,903 in tax credits will support the construction of 51 market-rate housing units at a $12.9 million mixed-use building on the site of First and First West, the $81.5 million project that will add hotel rooms, a plaza, Big Grove Brewery and Pickle Palace bar and grill over the coming years at First Street and First Avenue West. The six-story building, at Fifth Street SW and First Avenue West, will include first-floor retail with the 51 units on top, near another mixed-use building that is nearly complete on the site.
- The Oak Hill townhomes: Butterfield Holdings, an entity led by local developer Jason Rogers, is looking to transform 1003 and 1007 Sixth St. SE across from Linn County Public Health into a $1.8 million development featuring four two-story townhomes. The project received $97,974 in tax credits. The buildings will be 1,945 square feet featuring four bedrooms and three bathrooms, with a terrace or patio. Each unit will have an attached two-stall garage in the rear. City officials estimate the project will generate $152,000 in taxes over 10 years, of which $120,000 would be reimbursed.
- Ellis pocket neighborhood: LTRI, an entity led by Chad Pelley and Matthew 25, is planning to redevelop property at Ellis Boulevard between J and K avenues NW into a $4.4 million eight-rowhouse structure containing 24 market-rate units. The project is anticipated to generate $500,000 in taxes over a 10-year period, of which $475,000 is exempted. It was awarded $487,537 in tax credits.
- Sinclair on Sixteenth: Coralville-based developer Watts Group was awarded $604,011 in tax credits to build its $10.8 million, 29-unit multifamily building at 615 16th Ave. SE. That includes three for-sale condos on the fifth floor as well as the construction of two four-plex townhome buildings. All units are market rate. The city will reimburse 100 percent of the tax increments up to a net present value of $2 million, or 20 consecutive annual payments.
- Westdale housing: As Frew Development Group redevelops Westdale Mall, the developer was awarded $1 million in tax credits to build Parkway West Apartments — four multifamily buildings at a cost of $34 million. The facilities will add 200 total units: Three 52-unit buildings, one 44-unit building. The project will create 104 one-bedroom units, 80 two-bedroom units and 16 three-bedroom units.
- Warehouse on Oakland: West Side Wolf Pack IV, an entity led by Kory Nanke, was awarded $234,000 in tax credits for a $1.5 million adaptive reuse of the existing 7,000-square-foot commercial warehouse building at 550 Oakland Rd. NE in the College District. The project would add 12 market-rate units: eight one-bedroom and four two-bedroom units.
“It’s a diverse, different group of housing projects but all very positive for the continued growth of our housing stock and development, so we’re very appreciative that the state is supporting us to this level,” City Manager Jeff Pomeranz said.
Using multiple layers of financial assistance such as state tax credits and city financial incentives is key to making development projects happen, Pomeranz said.
“These resources are very critical to keep these projects moving forward right now,” Economic Development Manager Caleb Mason said, especially on more complicated and costly infill projects that are difficult to finance as interest rates remain high.
Other projects
The only Linn County project outside of Cedar Rapids awarded tax credits was in Marion, where 1277 8th Ave. was awarded $1 million for the 66-unit Bell Tower Place project.
One Johnson County project was awarded tax credits for $1 million toward the 72-unit Grove Park project in Tiffin by 443 Marengo Road.
Other Cedar Rapids projects were not awarded tax credits in this round, including developer Steve Emerson’s proposal for an adaptive reuse of the three-story Dragon Building at 329 Second Ave. SE and Dave Drown’s proposal for a multifamily housing complex at the UnityPoint Health office building, 3851 River Ridge Dr. NE, that was destroyed in a 2021 fire.
Mason said city staff have not regrouped with the developers yet but “we want to take a look at the overall scoring and see where they landed.”
In the future, Pomeranz said the city’s recent designation as a “Thriving Community” by the IEDA and IFA will allow city projects to receive extra points in the state’s scoring process when Cedar Rapids developers apply for tax incentives, so that could help these projects and others down the line.
IEDA received 107 applications seeking $70 million in tax credits. Of the $38 million available, $20 million was set aside for projects in small communities — those in Iowa’s 88 least populated counties. The large-city category included awards for $17 million in tax credits across 27 projects.
“Housing is a critical part of efforts to strengthen the quality of life statewide,” Debi Durham, director of the IEDA and Iowa Finance Authority, said in a statement. “The awards … will help more communities thrive and more families move where opportunities await them.”
Comments: (319) 398-8494; marissa.payne@thegazette.com
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