116 3rd St SE
Cedar Rapids, Iowa 52401
CEDAR RAPIDS — The city is requesting $39.5 million in state funds to support 'transformational development' projects downtown that, if approved, could give much-needed fuel to multimillion-dollar developments that have struggled to get off the ground.
Several Iowa cities have pitched 10 proposals to the Iowa Economic Development Authority in hopes of tapping into $100 million the state will award to back developments through its Reinvestment District program. Cedar Rapids' proposal calls for an estimated overall investment exceeding $261 million across six projects, which the city expects would generate nearly $7 million a year in property taxes.
Cedar Rapids made the largest request of all the communities, which applied for a total $201.6 million in funding.
The program 'reinvests' sales and hotel-motel tax revenues to cities for use in developments that improve the quality of life and create or enhance recreational opportunities — and ultimately attract people from the state or region.
Cities next will present their projects to an evaluation committee, which will score each project. Those with a score of at least 70 will present to the IEDA board for approval.
While IEDA Director Debi Durham has not seen the scoring rubric, she said extenuating circumstances like the Aug. 10 derecho are 'always things that I think play well to judges.'
'The main thing we're going to be looking at is transformation,' Durham said.
Several of the projects are from Central Iowa communities, but she said the panel is sensitive to providing a geographic balance and diversity in city size among the recipients. Dyersville is the only other Eastern Iowa community to apply.
The city's proposal encompasses six projects:
• First and First West: Local developers are planning a $100 million project with a Big Grove microbrewery and restaurant, commercial and residential space, a family fun center and other entertainment venues on an 8-acre vacant city lot.
• Hotels at Guaranty Bank site: The $53 million proposal from the developer with the Heart of America Group would restore the historic Guaranty Bank Building and partially restore the Old World Theater into two hotels under the Marriott flag. The roughly 200 hotel rooms would support larger conventions at the nearby DoubleTree by Hilton Cedar Rapids Convention Complex.
• High-rise at Paramount site: This 25-story, $73 million high rise would include a main floor grocery store, a 17th-floor restaurant with a patio, 120 condominiums and 21 apartments, office space, about 700 parking spaces, rooftop gardens, electric vehicle charging stations and solar panels. The building, near the Paramount Theatre, would be the tallest downtown.
• Eighth Avenue pump station:
Evolving plans for the green space at Eighth Avenue SW include festival grounds with performance space, picnic and playground areas, sheltered outdoor space with views of the Cedar River and indoor retail or restaurant space. Those amenities would go along with the construction of a pump station and a new levee and cable-stayed Eighth Avenue Bridge, which would raise the elevation by 14 feet.
In addition to the core projects, the proposal includes a $4 million plaza on Fourth Avenue SE with a cantilevered observation deck, covered stage for small performances and informal seating areas. And there would be a $12 million 5-in-1 Dam bypass channel to improve access to water-based recreation and open a span of the Cedar River to recreational boaters.
City Economic Development Analyst Caleb Mason said the mix of offerings is key — the economics of the city's Reinvestment District are driven in part by increasing hotel stays and also commercial and retail development that would increase the sale of products in the area. It diversifies the economic base so 'not all eggs are in one basket.'
All said, the city projects this district are estimated to bring 300 jobs to Cedar Rapids and create 360 temporary construction jobs by its 20th year. And officials estimate each year there would be $102.7 million in direct spending as well as $51.7 million in indirect and household spending by that point. It would also generate almost $77 million in sales and hotel-motel taxes.
According to the city's application, 'at least $42.4 million of the district program would be subject to an unfunded gap' but state approval would open up 'necessary resources' to create a sustainable model.
Durham said availability of funding and partners to complete the projects also factors into the IEDA board's provision of an award. IEDA wants to make sure 'these are not just wish lists,' she said.
If the state approves Cedar Rapids' application, Mason said these projects — on hold for a variety of reasons, including pandemic-related disruptions and struggles to secure financing — would see a greater deal of activity.
Should the state provide less funding than the city requested or another scenario unfold, Mason said 'then we go back and really firm up details of all of those projects.'
Mason said communities anticipate hearing from the state by May if they invited to give a presentation. If the city receives the minimum score and moves forward, he said the team involved in drafting this application would work on the final version due in February 2022.
'Obviously there's a lot of competition, but we feel we've developed some momentum and that this will give downtown Cedar Rapids a needed boost,' he said.
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John Steppe of The Gazette contributed to this report.