Lower costs, incentives used to attract businesses

By George C. Ford, The Gazette

Editor's note: Buresh Architectural Millwork in Urbana, which is featured in this story, was significantly damaged by an early morning storm on July 11. This story was compiled several weeks in advance of publication.

When Cedar Rapids Mayor Ron Corbett set off a firestorm of protest from Hiawatha officials in June 2010 by making an 11th-hour bid for Go Daddy to redirect 300 jobs to downtown Cedar Rapids, some longtime residents may have wondered if the pot was calling the kettle black.

Using tax-increment financing - TIF - agreements and other incentives, Hiawatha has lured a number of Cedar Rapids businesses to move to the northern Linn County community since the mid-1990s.

Former corn and soybean fields along Interstate 380 and North Center Point Road have sprouted auto dealerships, printing plants and office buildings.

Hiawatha businesses that previously called Cedar Rapids home include Cedar Rapids Business Systems, Cedar Rapids Toyota, Central Systems, Entre Information Systems/New Horizons Computer Learning Center, Fisher Group, Cedar Graphics, Cornerstone Press, J&A Printing, Lithia Motors (formerly Allen Motor Co.), Newell Machinery, Principal Financial Group and YMH-Torrance.

Primahne Associates, a partnership involving Don Primus, Bob A'Hearn and Steve Nelson, is credited with kicking off Hiawatha's building boom. The group announced plans in 1988 for Hiawatha North - an $80 million commercial, industrial and residential project at Interstate 380 and Boyson Road.

Hiawatha officials, including former Mayor Tom Patterson and former City Administrator Oliver Merriam, have claimed that the city has done nothing special to recruit businesses from Cedar Rapids and other communities.

“If you drive around Hiawatha and take a look at things, it's a very attractive place to be and there's a lot of growth, so that's where the businesses want to be,” Patterson said in April 2004 after the Hiawatha City Council approved TIF agreements with Central Systems and YMH-Torrance.

“All the smart businesses are coming to Hiawatha. It may be a stampede,” Merriam said in March 1997 after the city council approved a TIF agreement with Newell Machinery that provided nearly $500,000 in tax rebates over five years.

Priority One in Cedar Rapids contends that businesses moving from Cedar Rapids to Hiawatha is not a net loss for the area as a whole. The organization, which provides economic development assistance to both communities, notes that the jobs and resulting household income are retained in the Corridor.

That's what happened when Brian and Bradley Buresh set out to find a location for their new company, Buresh Architectural Millwork, and ultimately landed in Urbana.

After the June 2008 flood inundated their original choice in Cedar Rapids, the brothers looked at potential locations in neighboring communities.

“There wasn't a lot available because the flood left many displaced businesses scrambling to find someplace to set up shop,” Brian Buresh said.

“We went looking all over for a place to rent, but we decided that we really couldn't make the numbers work if we had to pay what many building owners wanted for rent.”

The Buresh brothers were driving back from Vinton on Highway 150 when they saw the sign “Lots for Sale” at the BECCA Industrial Park, operated by the East Central Iowa Rural Electric Cooperative.

“When Greg Pavelka (BECCA area development director) quoted us a price, we asked if that was ‘per acre' and he said, ‘No, that's for the whole five acres.' I was like ‘Sign us up!'?” Brian Buresh said.

“We have talked with friends who have similar buildings in Cedar Rapids and Hiawatha. Our rent, taxes and utilities are running substantially less than what they're paying.”

Brian and Brad built an energy-efficient building at the back of the industrial park. Their late father, Dennis Buresh, had developed a reputation over 50 years for quality workmanship as the owner of Contemporary Builders Ltd. of Cedar Rapids.

Buresh Architectural Millwork, a division of Contemporary Builders, opened for business in early 2009. Although originally planning to focus on millwork for home construction, the housing market downturn and the overall economic slump forced the brothers to switch gears.

“We've been getting a lot of work in commercial construction,” Brad said. “We recently did all the millwork in Capone's, the new bar and restaurant, and all the doors for the CSPS project in the New Bohemia district.

“We're also doing a project involving a large older home near Bever Park. If we can specialize in that and do a good amount of volume, we will be all right.

“We're getting a lot of referrals from builders and others that my father dealt with over the years. We're also doing some wholesale business with area lumberyards.”

Brian said the only drawback to locating their business in Urbana has been the brothers' daily commute from their homes in Ely and Walford.

“We've done work from Dubuque to the Quad Cities, so our location really hasn't affected our sales,” he said. “We can finish an order, put it on a truck and deliver it the same day.

“It's made a difference in our credit card bill for fuel, but what we're saving in taxes and utilities makes it worth it. Maybe Cedar Rapids needs to give businesses that are starting out a tax break for the first five years.”