Cedar Rapids considers tax break to keep 50 jobs from Marion

CEDAR RAPIDS — Terex is looking for a new home for its 50 local employees, and the equipment manufacturer has told city officials it would like a financial incentive if it is to stay in Cedar Rapids rather than move.

With the corporate request, Cedar Rapids finds itself trying to hang on to jobs so they go not to another state or even to Des Moines or Waterloo or Davenport — but next door to Marion.

Competition in the metro area for jobs and tax base apparently is alive and well.

At its meeting at 4 p.m. Tuesday, the Cedar Rapids City Council will consider providing Terex with a property tax break worth an estimated $506,000.

The proposed incentive is something of a first for the city, Community Development Director Jennifer Pratt said Monday.

It is new, she said, because the tax incentive would go to a tenant in an office/retail development, The Fountains, the developer of which already has received a five-year, 100-percent tax break to build the six-building complex at Edgewood Road NE and Blairs Ferry Road NE.

Pratt said the incentive for Terex is to meet another of the city's development goals — to retain high-quality jobs.

She said this does not open the door for every tenant of every new building to seek a city incentive after the developer already has received one.

'This just happens to be a very specific, longtime Cedar Rapids business,' Pratt said.

She said Terex's local employees, many of whom are engineers, have an average annual salary of $60,000.

In a letter to the City Council, Terex said it needs the incentive if it is to stay in Cedar Rapids so it can move from its spot at 909 17th St. NE to The Fountains.

Chris Bruck, a controller for Terex, said the company also looked to move to a building at 701 Tama St. along Highway 100 in Marion that the Berthel Fisher financial services company is leaving in the months ahead as it moves to a new building in Cedar Rapids.

Berthel's new building also has received Cedar Rapids city tax incentives.

Terex's Bruck said the Marion building has the advantage of being furnished and nearly ready for occupancy, while the office location at The Fountains is not furnished.

However, he said the Cedar Rapids incentive, if approved by the City Council, would allow for a lower lease cost and new furniture at The Fountains. The changes are sufficient to allow Terex to choose The Fountains location and 'ultimately choose to stay within the Cedar Rapids city limits,' Bruck said.

In 2012, the City Council approved a five-year, 100-percent property tax break for the $34 million Fountains development. The tax break was estimated to save the developer $3.7 million over five years on the new investment. The oft-used incentive, called tax increment financing, is premised on the idea that the investment would not occur without the incentive.

The city's Pratt said the added incentive for Terex would come by extending the five-year break for another one and half to three years on one of the six buildings in The Fountains development.

Terex Minerals Processing Systems purchased Cedarapids Inc. in Cedar Rapids in 1999. At one time, Cedarapids Inc. employed some 900 employees in the city, including 640 production workers.