Cedar Rapids in line for $35 million Events Center

Crowne Plaza Five Seasons hotel and convention center

The city is in line for a $35 million federal grant for a new Event Center, and the council will decide today how to fund the local obligation.

The $67 million project would upgrade the U.S. Cellular Center and build a convention hall next to the arena and struggling Crowne Plaza Five Seasons Hotel. Some $15 million in state I-JOBS funds already has been secured.

The city has been awaiting word from the U.S. Department of Commerce's Economic Development Administration on a grant up to $35 million to help fund the project. City leaders learned in December the project “merits further consideration,” a status that requires the city to say how it would provide local funds.

Mayor Ron Corbett said Tuesday he will ask his council colleagues to commit part of the city's hotel/motel tax revenue to help fill the up-to-$17 million gap. The 7 percent tax generates $2.5 million a year. The city would sell bonds and use hotel/motel revenue to pay off bonds, Corbett said.

Corbett also expects the local private sector will help.

Also, the City Council will ask the Iowa Legislature to let cities levy a 9 percent hotel/motel tax. Such an increase would raise an additional $700,000 a year for Cedar Rapids.

Doug Neumann, president/CEO of the Downtown District, said without that increase, local organizations that depend on a slice of hotel/motel revenue, include some non-profits, might suffer if their share vanishes.

Corbett said using the tax revenue for this building project make sense because, once completed, the facility will bring more visitors to Cedar Rapids and increase hotel/motel revenue.

A precedent for this funding option exists. Neumann said past councils sold bonds for capital projects at the Ice Arena and Paramount Theatre and have paid them off or are paying them off with a portion of the city's hotel/motel tax revenue.

Another funding route would be selling city bonds and paying them off with property-tax revenue, but Corbett has rejected the idea.

Neumann noted that community leaders have been trying to build a new convention center downtown since at least 1994.

Plans for the Event Center call for closing Third Street NE at First Avenue East, and placing the it there. One version extends the center to the Roosevelt building on First Avenue NE, and another keeps the parking ramp next to the Roosevelt in place, with much of the center built along A Avenue NE between Second and Third streets, Neumann said.

Jessica Palmer, director of marketing and research at the Cedar Rapids Convention and Visitors Bureau, said the city could see $7.7 million annually in new, direct spending and $24 million a year in overall economic impact with a new convention center and upgraded arena.

Corbett said the investment would position Cedar Rapids to compete for convention and entertainment business it has ceded to cities like Des Moines and Dubuque, each of which has new convention center. “This is going to help us be a player again,” he said.