Cedar Rapids buys downtown site for $1M

CEDAR RAPIDS — The city of Cedar Rapids has acquired a prime downtown site for temporary use as parking during construction of a flood wall, but in the long run the property purchase will allow the city to seek redevelopment proposals to transform the vacant land.

The Cedar Rapids City Council earlier this month signed off on the $1.025 million purchase of property at 320 and 330 First St. SE, two empty lots owned by Iowa City developer Jesse Allen’s group Aspen Ventures.

It’ll allow for temporary parking space to curb the impact of parking lost during construction as part of the city’s approximately $1 billion flood control system that will fortify the city against rising Cedar River waters.

GLD Commercial first listed the property for sale for about $2.5 million in 2022. It was most recently listed for sale at $1.95 million. Cedar Rapids hasn’t yet closed on the purchase, so the listing still is up.

Given there’s little empty downtown land, GLD Commercial Vice President Adam Gibbs previously said the property was priced “based on the opportunity it presents.” The lots used to contain office buildings that sustained heavy damage in the August 2020 derecho and were torn down.

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City Community Development Director Jennifer Pratt said when the property no longer is needed for flood control construction, “the city will use our standard property disposition process — requesting competitive proposals — as an opportunity to encourage redevelopment and private reinvestment.”

As Cedar Rapids looks to execute its Downtown Vision Plan, a five-year guide to revitalize the urban core, having control over the fate of this site gives the city the ability to entice development that “could also strengthen the tax base” in the long run, according to council documents.

The listing suggests the site could host a large mixed-use development such as a hotel, office, restaurant, multifamily or condo project with on-site parking or a parking ramp.

This property is next to vacant city-owned land on First Street and Third Avenue SE where a proposed high rise long had been anticipated to shape the downtown landscape before the pandemic put the project on ice.

Steve Emerson, downtown Cedar Rapids' most prolific developer, in July 2018 was the only applicant to bid on that prominent city-owned land that is used for parking near the Paramount Theatre.

What flood control work will be done?

This property purchase allows the construction contractor access to larger segments of the area behind downtown buildings along First Street SE at one time, Flood Control System Manager Rob Davis said.

The estimated $40 million project builds a flood wall from Eighth Avenue to First Avenue SE, between the federal courthouse at 111 Seventh Ave. SE and City Hall at 101 First St. SE. Construction is slated to start next summer and could carry into 2027.

When complete, it’ll connect to the Third Avenue floodgate, the permanent flood wall built into the CRST building and the First Avenue roller floodgate.

This flood wall will include the city’s first removable flood wall section. The combination portions — a mix of permanent and removable flood wall — will have an approximately 3.5-foot-high base wall, with the removable one stacked on top. “We don’t want to block the view of the river from downtown,” Davis said.

Davis said the city particularly is challenged for parking on the strip behind the area stretching from Fourth to Fifth avenues SE, which serve businesses including Chophouse Downtown, Northwestern Mutual and GLD Commercial.

The redeveloped Smulekoff’s building, which houses apartments and Craft’d coffee shop, also has parking touching Fourth Avenue SE.

“Parking is really important to the businesses down there,” Davis said. “It’s important to the city as well that those businesses be successful.“

Initially, staff were planning for crews to build the flood wall in three separate phases to keep parking active, but Davis said it’s “inconvenient and expensive” to do so. Buying these lots allows parking to be relocated in one stage.

“That should save construction time and dollars to be able to build it all at once,” Davis said. “It’s probably safer for the tenants, patrons, as well as our employees because they wouldn't be right next to construction zone. They'd be across the street from it.”

How was this property purchase funded?

City staff negotiated the price down after getting it appraised at just under $1 million, Davis said.

A $252,000 portion will be covered by the local share of flood control system dollars, funded through property tax dollars. This number is based upon what the rental rate would be for a three-year period of construction, as determined by the appraisal.

The rest will be funded using tax-increment financing dollars, he said.

“Our designers feel the staging implication to get rid of multiple phases to be able to build this consistently will result in a reduced cost of construction more than the ‘rent’ we’re paying for the land,” Davis said. “It’s a really good deal.”

It took crews four years to build the Quaker Oats flood wall north of there because it had to be done in pieces, Davis said. By doing this project in larger chunks, he said staff estimate it’ll save an “order of magnitude” — at least $1 million.

“It’ll be good to get the flood control system built, and be good to do it in a way that keeps the adjoining businesses safer,” Davis said.

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