Cedar Rapids council approves incentives for two new projects, with some dissent

The City Council approved economic-development incentives this week for two new projects, a new West Side Transport facility and a speculative warehouse development.

The first was by unanimous vote while the second came with two dissenting votes.

The dissents came from council members Scott Olson and Don Karr, who opposed granting a partial, 10-year property-tax break for two speculative warehouse buildings on 6.38 acres of property at 4700 Bowling St. SW. The property is in the process of being sold by The Gazette Co.

Olson, a commercial Realtor, held up a T-shirt with a Wendy's restaurant ad slogan on it that he picked up from a recent ribbon-cutting at a new Wendy's in Cedar Rapids.

"Where's the beef?" the T-shirt said.

Olson said it didn't make sense to provide a City Hall property-tax break to a speculative building development without knowing who might occupy it and how many jobs it might create.

Warehouse owner Jeff Busse objected to providing City Hall incentives in a market that doesn't need them to get warehouse buildings built. The incentives would harm his existing warehouses, Busse said.

Olson said incentives for speculative buildings would hurt the local real estate market. Karr said the incentives might just lure tenants from existing warehouses elsewhere in Cedar Rapids.

However, Realtor Dave Drown, who represented the unnamed project developer, said that the $4.7-million Bowling Street Flex-Space project would provide new upscale warehouse space that is not now available in the Cedar Rapids market. The extra cost to build the higher quality project required the property-tax breaks or the project wouldn't get built, he said.

Drown acknowledged that a smaller tax break exists specifically for shell buildings in industrial areas, but the incentive was too small, Drown said.

During a council discussion a month ago on the project, council member Monica Vernon looked at photos of the proposed warehouse development and said she wasn't convinced it was that different from what already was on the market.

However, she voted on Tuesday with the 6-2 majority to grant the incentive. It will allow Bowling Street Flex-Space to keep 44 percent of the property tax on the improvements or an estimated $480,000 over 10 years. The company will pay $620,000 in property taxes based on the improvements.

No one on the City Council objected to providing a partial, 10-year property-tax break for a proposed new headquarters for West Side Transport on the city's far south side along Interstate 380.

The new West Side Transport facility at 11160 High Life Ct. SW, will feature an office building, 20,000 square foot in size, a dorm for truck drivers, 34,587 square feet in size, and a 30-000-square-foot maintenance shop.

The project cost is $13.25 million, the city said.

The city estimated that the new facility will generate $3 million in new property tax revenue over 10 years, $1.7 million of which will be paid and $1.3 million of which will be exempt with the 10-year incentive.