116 3rd St SE
Cedar Rapids, Iowa 52401
The booming Southwest Growth Area in Cedar Rapids
More than $1 billion in industrial development tallied since 2017
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CEDAR RAPIDS — For decades, Cedar Rapids’ south end drew industry for its quick access to transportation — rail, highway and then The Eastern Iowa Airport.
The neighborhood was built on the city’s historic status as a hub for food processors, warehousing and distribution services.
Now, a handful of projects such as BAE Systems’ aerospace electronics plant (opened in 2022) and computer data centers could be harbingers of what’s next for what the city calls its Southwest Growth Area.
“We’re looking at a modern economy now, where these companies are helping to shape the future,” said Biswa Das, Iowa State University associate professor and Extension economist in community and regional planning. “Cedar Rapids has always been big in ag processing. With tech driving a lot of growth and change, it’s a good moment for a city to focus on that.”
The industrial corridor along Sixth Street SW and 76th Avenue SW, encompassing the airport and extending south toward Swisher, has drawn more than $1 billion worth of industrial development since 2017, according to city staff. The projects accounted for 949 new jobs and nearly as many listed as “retained.”
“The proximity to Interstate 380, Highway 30, The Eastern Iowa Airport, and six national and local railroad companies creates a hot spot for manufacturing, distribution, and other commercial developments,” city staffers wrote in a presentation to the Iowa Department of Transportation Commission in April.
“The growth trends down there have tended to align pretty well with our target industries,” said Bill Micheel, Cedar Rapids’ economic and development services director. “Logistics and distribution, warehousing, trucking. Our economy is resilient, if there’s downturns in one area.”
The southwest industrial corridor’s development reflects a confluence of demographic and economic trends over recent decades, according to Das.
“Iowa is a slow-growth state,” he said.
Only a third of Iowa’s 99 counties, all centered on its five largest metro areas, saw population growth between 2010 and 2020, according to the U.S. Census. Linn and Johnson were among the six counties keeping pace with the nation’s 7.4 percent growth, nearly double Iowa’s 4.7 percent rate during the decade.
“Look at the population growth centers across the state,” Das said. “Central Iowa is a big place, and Cedar Rapids is the next big city.”
Whether it’s cause or effect, the area’s draw on young people from the surrounding region gives it a workforce advantage.
“For Cedar Rapids, what works well is having a good partnership with the local community college, a big asset for the community, and you have Coe College and Mount Mercy,” Das said. “The business is confident that workforce can be trained in the community.”
Data centers, information economy
The information economy is driving development in Alliant Energy’s Big Cedar Industrial Center north of 76th Avenue SW and west of Edgewood Road.
At $576 million, Google’s data center under construction at 76th Avenue and Edgewood Road SW was briefly the biggest industrial project in city history. That was until plans were announced in September for two more data centers worth a total of $750 million. The projects will occupy most of the 1,391-acre Big Cedar.
QTS Cedar Rapids LLC purchased 615 acres in Alliant Energy’s Big Cedar Industrial Center from an Alliant subsidiary in October for $25.6 million. The new project’s end users haven’t been named, but a similarly named Kansas company, QTS Data Centers, operates data centers in the U.S. and the Netherlands for banks, financial firms and other companies and government entities.
Data centers, which house computer servers, storage drives and related hardware to support storage of digital data, are voracious consumers of electricity and water for cooling. Power-supply issues around the country have brought attention to Iowa’s stable electrical grid and competitive land prices.
“Generally speaking, these (questions) include, is there land available, and how expensive is it?” Micheel said. “Is there water available, and is there power?”
QTS has told city officials it plans a closed-loop cooling system for its facility, easing its demand on the city supply. The planned data centers’ energy needs prompted discussion of reopening the Duane Arnold nuclear plant near Palo, which was decommissioned in 2020.
“They require a huge amount of energy,” Das said. “With the abundance of wind energy and renewable energy, those businesses feel a lot more comfortable here.”
Cedar Rapids is extending a water main at the Big Cedar Industrial Center, supporting potential development at the site serving some of the city’s larger water users. The $3.036 million project is funded by Alliant ($1.5 million) and $2.1 million from revenue generated in water-service fees — standard practice for industrial sites.
The city also is extending sewer lines to Big Cedar and plans to improve 76th Avenue SW, currently a gravel road west of Edgewood, to be a three-lane urban road. The roadway improvement likely will be in the city’s next application to the Iowa Department of Transportation’s Revitalize Iowa’s Sound Economy (RISE) program.
“The city will get the water and wastewater (lines) to the edge of the development property,” Micheel said. “From there, the land owner or the developer is responsible for getting it to the part of the property where it needs to be.”
City staff estimates the Big Cedar projects will generate $1 billion in property taxes over 20 years, with $529 million returned to its developers as incentives. Once the centers are operational, they’ll employ fewer than 40 people each.
“There’s not a lot of job creation when it comes to the data centers, but the one area they do contribute is to the local tax base,” Das said. “There can be some sort of balance there — they can contribute to the local community, and the city can provide some incentives.”
BAE, Sub-Zero
Development east of the Big Cedar Industrial Center is dominated by manufacturing and distribution and businesses supporting those activities, drawn by ready access to road, air and rail.
FedEx’s $108 million distribution center at 1035 Commerce Park Dr. SW, employing more than 400, opened in 2022.
That was the same year BAE Systems, which bought part of Collins Aerospace, consolidated its military GPS production at a new $173 million facility on Sixth Street SW.
“Everything from design through manufacturing of these products is performed in the Cedar Rapids facility,” Luke Bishop, BAE’s director of navigation and sensor systems, wrote in an email.
The plant at Sixth Street and 76th Avenue SW employs about 650 people in a range of roles, including engineering, manufacturing, finance, supply chain, quality, program management, contracts, business development and human resources, according to Bishop.
“There is a long history of technology innovation and manufacturing of GPS and navigation solutions in Eastern Iowa,” Bishop wrote. “This location was a great choice because of access to a talented workforce with the skills needed to support business operations.”
Construction continues nearby on a $140.6 million manufacturing plant for Wisconsin-based appliance company Sub-Zero at 10015 Sixth St. SW, The plant will employ around 200 people when it opens in late summer.
The area’s prospects are partly the result of city planning over the past 20 years.
“These decisions were made a couple of decades ago to have excess capacity just for the reason of economic development,” Micheel said. “That’s paying dividends. The data centers that are going in down there are helping us to pay for expanding that capacity.”
Supporting growth
Planners also expect residential growth east of I-380, Micheel added, including the $64 million American Prairie Project that will add 400 houses, with dozens of town houses and condos, over the next nine years. The development is south of Wright Brothers Boulevard and west of Kirkwood Boulevard.
“There will be some more neighborhood-type commercial development happening there,” Micheel said.
Corridor development is expected to continue to push annexation — the expansion of city limits — and extension of city services.
“When we run utilities, (the property) is either already annexed, or the other option is to ask for an annexation agreement,” Micheel said. “When you’re able to hook up, you will.
“We are starting to see development pressure south of the airport, and we’ll have to extend utilities down to that area. We know south of there, there’s going to be more development for the future.
“We’ll pay the difference to put in a larger (capacity). That’s one of the planning activities we engage in, making sure we’ve got the infrastructure for future growth.”
The Southwest Growth Area also is prompting road improvements.
The busy Wright Brothers Boulevard-Interstate 380 interchange is being redone as a diverging diamond interchange. Wright Brothers will be widened in the $112 million upgrade, and the interstate will be widened to six lanes from Highway 30 to the Swisher/Shueyville exit. The city will improve the Sixth Street SW and Earhart Lane SW intersections with Wright Brothers.
Grading already has begun on the project, with completion expected in 2027.
“That’s something the city identified a number of years ago through a traffic study, given all the development pressure and the likelihood that a lot of that’s going to the truck traffic serving the logistics and warehousing in that area,” Micheel said.
The people factor
Keeping the area competitive means drawing on more than its geographical advantages.
“Cities and regions compete not only for economic development and resources, but for people,” Micheel said. “That’s why we have a focus on quality of life and workforce recruitment.”
The effects can be seen in such unexpected places as the city’s growing network of cycling trails and streets that are more friendly to bikes and pedestrians.
“There’s been somewhat of a shift in economic development strategy across the country toward quality of life and workforce challenges,” Micheel said. “We’re thinking about creating jobs, but is the quality of life in your area such that we’re going to attract people? The trails that were started 12 to 15 years ago are really starting to pay off. None of those on their own create big advantages, but the sum of all those things is helping create a more dynamic downtown.”
“It’s been a deliberate effort on the part of lot of communities that when people come to a place, they really like the place,” Das said. “If they see a lot of biking trails, they get excited.”
Along those lines, Das said he was impressed by Cedar Rapids’ efforts during a visit last summer.
“NewBo Market, when we visited there, we thought that was really a cool idea,” he said. “These small storefronts and coffees shops and that, these are the things that influence you when you come to a community.”
That’s how big-ticket industrial projects can support smaller neighborhood-scale activity.
“You’re promoting small businesses and entrepreneurs,” Das said. “The city’s emphasis on quality of life would pay off in the long term. When a business comes to a place they’re not just talking about business. Good schools, nice streets, infrastructure all contribute to your experiences and how you feel about a place. That’s working out well for Cedar Rapids.”
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