Cedar Rapids adopts set of incentive expectations

CEDAR RAPIDS - Many companies looking to come to town or those here who want to expand aren't shy about asking about tax breaks or other economic-development incentives.

This week, the City Council voted unanimously to better define and target what incentives it will offer for certain kinds of projects so companies know what to expect as they consider investing in the city.

In so doing, the council created four different categories of projects with differing incentives:

Downtown and MedQ District housing: a property-tax break of 100 percent for 10 years.

Targeted development projects: a property-tax break of 44 percent to 50 percent for 10 years. This would include projects that create 10 or more quality jobs; result in development in downtown, the MedQ District, New Bohemia or Czech Village; consist of large master plans; or involve historic preservation or the removal of blight.

Commercial reinvestment projects: a property-tax break of 44 percent for 10 years. This would include big-box commercial stores and strip centers.

Community benefit program: a variable incentive depending on long-term benefit to the community.

Jennifer Pratt, the city's interim development director, told the council that the incentive targets are in line with recent incentives handed out by the City Council.

She said better defining and publicizing incentives would allow the city to better promote them as it markets the city to companies here and those looking to come here.

At the same time, she said the program comes with flexibility because 'ever deal is a little different.”

Pratt said her department reviewed incentive packages provided by 13 cities, seven in Iowa and six others in the Midwest.

Pratt said the incentive program is one of several steps the city has taken recently to beef up its economic development effort, she said. Others have included adding a Development Services Department and hiring an economic development liaison, she said.

Council member Ralph Russell said the city has plenty of water and wastewater treatment capacity, and he wondered if the city should consider offering incentives on those services to attract grain-processing companies that depend on those city services. Pratt said the city currently does offer those kinds of incentives, and Russell thought the city ought to market their availability as well.

Council member Scott Olson, who has been critical of a few of the tax breaks that the council has handed out in the last year, said providing guidance to businesses on incentives has been 'long overdue.” At the same time, he said the city needed to 'be careful” that incentives don't adversely impact existing businesses.

Doug Neumann, vice president of the Cedar Rapids Area Metro Economic Alliance, told the council that the program of targeted incentives will help market the city because the program provides predictability for investors.