116 3rd St SE
Cedar Rapids, Iowa 52401
CEDAR RAPIDS — The City Council this week awarded Cedar Rapids-based construction equipment supplier Altorfer Inc. tax incentives to build a $40 million corporate headquarters facility in the fast-growing southwest quadrant.
The council signed off on a term sheet outlining preliminary terms with Altorfer to build a 150,000 square-foot office, sales and service facility at 8400 Sixth St. SW, which would relocate its existing corporate headquarters on Sixth Street SW between 33rd and Wilson Avenues SW, and roughly double its size.
“It's great to see a home business expanding here in Cedar Rapids,” Mayor Tiffany O’Donnell said.
The project is slated to start by Oct. 23 and wrap up by October 2023. A development agreement finalizing the deal is expected to come to the council early this fall.
City Economic Development Manager Caleb Mason said the financial incentives are subject to maintaining employee thresholds — the retention of 40 jobs and creation of 15 jobs. Ten of those new jobs would be at or above the high-quality wage threshold, putting their annual salaries at approximately $50,000.
Altorfer will receive a reimbursement of 50 percent of the increment taxes generated by the project up to either a net present value of $3 million or 17 consecutive payments, whichever comes first. Mason said that $3 million is roughly equivalent to a 10-year, 100 percent tax abatement.
The current facility could then be redeveloped or resold, Mason said, but specific plans are uncertain at this time.
The deal also calls for off-site improvements to support the new development.
Under the proposed agreement, the company will allow routing of a new road to be extended west of Sixth Street SW to align with St. Martin Blvd. SW. As part of the intersection improvements at St. Martin Blvd. SW, Cedar Rapids will extend a new road to provide access to the facility.
As the city works to iron out other projects on approximately 180 acres nearby, Mason said city staff are considering future growth as they plan infrastructure developments in the area.
“It was important as we looked at the overall vision of this area that we took the whole picture in mind,” Mason said.
The developer also will cooperate with Cedar Rapids on any potential grant through the Revitalize Iowa’s Sound Economy program, if the city is eligible and applies for the program.
Cedar Rapids has attracted growing manufacturing, warehousing and logistics and distribution companies, among others, in the southwest quadrant thanks to easy access to The Eastern Iowa Airport and the rail and highway networks.
The city for three consecutive years has landed projects exceeding $100 million each in the southwest quadrant.
Staff plans to bring a development agreement forward soon with Wisconsin-based refrigeration and high-end appliance company Sub-Zero, which is looking to build a $140.6 million light manufacturing facility on Sixth Street SW.
Other major investments nearby, slated to wrap up this year, include a $108.6 million, 479,000-square-foot FedEx Ground distribution center on Commerce Park Drive SW, as well as a 200,000-square-foot classified defense aerospace facility worth more than $170 million from multinational aerospace company BAE Systems.
To accommodate growth generated from these projects and new housing construction, the Iowa Department of Transportation in June accelerated plans to reconfigure an interchange at Interstate 380 and Wright Brothers Boulevard SW.
Council member Tyler Olson said he appreciated the Altorfer family expanding its commitment to the community and working with staff on the redesign in the quickly growing part of town.
“There's been a lot of attention to new businesses that we've been attracting to the community out in that area, but it's just as exciting to see a homegrown business … expanding and really growing their presence here in Cedar Rapids,” Olson said.
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