116 3rd St SE
Cedar Rapids, Iowa 52401
CEDAR RAPIDS — A state panel gave final approval Friday to awarding Cedar Rapids $9 million that will give a boost to development in Cedar Rapids’ urban core, funding new recreational amenities and infrastructure that will support the area’s growth.
The Iowa Economic Development Authority board okayed the funds as part of the Reinvestment District program, a competitive program that reinvests sales and hotel-motel tax revenues produced over a 20-year period into projects that enhance the quality of life and create or expand recreational opportunities — ultimately attracting more people to a city.
Cedar Rapids received a $9 million provisional award last year. Friday’s decision makes that award final.
“This $9 million will be critical to a number of developments in downtown,” City Manager Jeff Pomeranz told The Gazette.
The development team is made up of Joe Ahmann, president of Ahmann Cos.; Nate Kaeding with Build to Suit; and Big Grove co-founder Matt Swift, whom Mason said collectively have invested about $180 million to $200 million in Cedar Rapids across several projects.
“We’re very comfortable with where we’re at,” city Economic Development Manager Caleb Mason said. “I think we’ve put together a project that we feel very confident with the part that the city is playing and the recreational components and just having a solid partner.”
Most of the millions the IEDA gave the city will go toward the $81.5 million mixed-use First and First West development that features a Big Grove brewery.
Cedar Rapids specifically will put $6 million toward a city-owned, 550-stall parking ramp to support the project. According to the development agreement approved in April, the city won’t be obligated to start construction of the ramp until there’s at least $30 million in value across the site, equivalent to the completion of about four or five buildings.
Another $1.5 million will go to an Eighth Avenue SW pump station with a mixed-use community space and festival grounds. Pomeranz said this is important to the city’s $750 million permanent flood control system.
And $1.5 million will go toward a 5-in-1 Dam bypass channel with white-water rafting and other water recreation on the Cedar River, an estimated $14.6 million project. River recreation has been a “longstanding and important priority of the city,” Pomeranz said.
Overall, city officials estimate the district will generate about $30 million in revenue.
The redevelopment of the Guaranty Bank Building and Old World Theater site into Marriott hotels and the 25-story high-rise near the Paramount Theatre were left out of the 20.58-acre district, though they were in the initial application.
City officials have said those weren’t far along enough to make the cut for state funding.
Ultimately, he and the board unanimously backed the project.
“This is part of a very much bigger redevelopment project in the downtown Cedar Rapids,” Kittrell said. “They have a lot of activities going on, and I think we came to clarity on which portions of the redevelopment in that area would be funded with this.”
When applications were first submitted in 2021, Kittrell said there wasn’t much travel happening and little desire to build new hotels, so “there’s been a change in the way that they’re looking at the hotel development.” Having a hotel is necessary for cities to capture the hotel-motel tax portion of revenue that can be generated in Reinvestment Districts.
First and First West will include one — possibly two — hotels, the city’s Mason has said. The hotel flag must be what’s considered upscale by Smith Travel Research — essentially the same level as the DoubleTree by Hilton hotel or higher, but it will be a smaller, more boutique hotel.
He previously told the board having the major anchors of the site — Big Grove and Pickle Palace bar and grill — in place at the beginning “catalyzes or attracts other investment,” setting up the city to attract other hotels.
“They’re being very pragmatic about this and I think they're going to take it a step at a time,” Kittrell said.
“They're being very methodical about how they're doing their development. They want to make sure that they've got funds coming in before they're issuing bonds.”
By the time the district commences in January 2025, Mason said there will be multiple buildings up and operational at the site and city staff will be better able to see where the revenues stand. The city will monetize the district increment revenues to service debt at that point.
The Reinvestment District award is contingent upon the city showing documentation of committed financing by:
- Oct. 1 for phase one
- Jan. 1, 2025, for the public plaza in phase two
- June 30, 2025, for the mixed-use pump station
- June 30, 2026, for the 5-in-1 Dam bypass channel
- July 1, 2026, for the entertainment center in phase three.
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