Cedar Rapids’ southwest quadrant seeing ‘explosion’ of development

CEDAR RAPIDS — It began in the Cedar Rapids city manager’s conference room.

When U.S. Department of Justice regulators asked Collins Aerospace in October 2019 to divest itself of the Global Positioning Systems unit, the impending ownership change had a significant impact on Cedar Rapids, where hundreds were employed in the operation. The move came as part of the merger between Raytheon Co. and Collins Aerospace' owner United Technologies Corp.

Not long after the merger was set in motion, BAE Systems, an international aerospace and defense company based in the United Kingdom, shared intentions to establish a presence in Cedar Rapids as the new owner of the GPS unit. City Manager Jeff Pomeranz said the city team called the company to establish a relationship and met in that room, where they learned the company was looking across the nation for a place to locate a new facility.

The spread of COVID-19 turned into a season of uncertainty for city staff as they worked remotely. Economic Development Manager Jasmine Almoayyed said they chipped away that “bizarre” summer on pandemic projects, with the prospect of BAE Systems’ facility coming to fruition here motivating the team to press on.

In July, the deal became reality — the Cedar Rapids City Council approved a development agreement for a 200,000-square-foot classified defense aerospace facility worth over $170 million that would locate 650 jobs in the city.

The multinational business had options to locate in communities across the nation, and Cedar Rapids hadn’t even offered the largest incentive package, Almoayyed said. So what sold the company on Cedar Rapids?

“It was the location, ultimately, that sold them — that southwest quadrant of Cedar Rapids, because it is easy to get to,” Almoayyed said.

Company officials looked at layered heat maps showing where their workers lived. For Coralville employees and for workers on Cedar Rapids’ north end, access to Interstate 380 “is a game changer,” Almoayyed said.

BAE Systems is far from the only company taking notice of what Cedar Rapids has to offer — particularly east and west of I-380 as well as along and south of Highway 30.

Ease of transportation access through The Eastern Iowa Airport and surrounding highways, as well as availability of land primed for development, is fueling a boom of activity in the city’s southwest quadrant. Given the area’s growth potential, companies are shifting or expanding their footprint to this part of the city — which city officials say is the result of years of planning on their end and a dream brought to life by the private sector.

City officials estimate that over the last five years there has been an overall investment of $1 billion completed or underway in the area, including both privately led projects and nearly $714 million across 30 developments the city has awarded incentives.

“This area sort of has been waiting to explode, and now that is occurring, and we're just seeing the benefits of years of really these properties sitting there waiting to be developed in different ways, and now it's kind of all coming together in a very, very positive way,” Pomeranz said, “but is really the result of planning, and now we're seeing the reality of that planning.”

To City Council member Ann Poe, chair of the council’s Development Committee, that $1 billion figure means “an explosion of economic development for our community, and those are dollars that are reinvested — all that payroll is reinvested back into our community. That to me continues to keep our economy in Cedar Rapids strong.”

That investment across the city-incentivized projects has resulted in the retention of 1,884 jobs and created 892, according to data provided by the city.

“I would continue to hope that more of the many thousands of acres that are intended for this type of development, more of that develops and brings high-quality jobs to our community,” said council member Scott Overland, chair of the council’s Finance and Administrative Services Committee.

Intentional growth

Indeed, this growth did not happen by accident, said Community Development Director Jennifer Pratt.

Southwest Cedar Rapids was identified in the city’s EnvisionCR future land use plan as a growth area. The plan specifically calls for “dedicating land for industrial projects and establishing a network of streets for emerging neighborhoods” in this region.

“When developers come in looking for different places, they love seeing the fact that we're shining a spotlight on that area because they know, No. 1, the infrastructure is there — which again, we've made lots of investments out in that area for water and sewer, we've made lots of investments in roadways and we continue to do that,” Pratt said. “So having it identified as a growth area is a huge pull.”

This corridor has seen infrastructure improvements in recent years with the Iowa Department of Transportation approaching completion of its four-lane expansion of Highway 30 and, in 2018, the opening of a four-lane divided Highway 100 connecting the northeast and southwest quadrants of Cedar Rapids. Plus, work remains underway to expand I-380 to six lanes in the area in an effort to ease the flow of traffic for commuters who rely on the road and attract new development with the improvements on both ends of the Corridor.

The city also works closely with the Iowa DOT to plan for traffic impacts of new projects and make road improvements accordingly, Almoayyed said.

Cedar Rapids is in the process of drafting an overall traffic model to better brace for the systemwide impacts of rapid development in the southwest quadrant. Already, though, City Economic Development Analyst Caleb Mason said roads have been installed and converted from gravel, and the city has extended water and sewer so companies have those utilities available.

“We know there'll be significant infrastructure improvements made in order to accommodate the growth and development,” Pomeranz said.

‘Never seen anything like this’

Council member Scott Olson, a real estate broker, has been in the business for nearly three decades. But in his experience, he said, the development boom in the southwest quadrant to this scale is unprecedented.

“I've never seen anything like what is happening in the southwest quadrant, around the airport specifically,” he said.

Olson attributed the uptick to the amenities this area of town offers, including a high amount of shovel-ready land. The land availability and readiness for development now is a sharp contrast from many years ago, he said.

Almost every piece of land around The Eastern Iowa Airport has been optioned or is under contract by developers, Olson said — and they're all doing it in anticipation of growth in the distribution industry.

Cedar Rapids just last week celebrated the opening of UPS Inc.’s new 53,800-square-foot cargo facility, an $18 million project that is expected to hire 100 employees.

With that facility opening, officials are eyeing the potential for The Eastern Iowa Airport to become the main cargo airport for the state. Airport Director Marty Lenss said about half of all of Iowa’s air cargo traffic now comes through it — up from what used to be only 35 to 40 percent of the state total.

Following that projected uptick in transportation and logistics-oriented companies seeking to expand their footprints, Cedar Rapids has approved tax incentives for a $108.6 million, 479,000 square-foot FedEx Ground Packaging Systems Inc. warehouse and distribution center on a new road in the southwest quadrant.

A development agreement remains in the works for the project, which would create 434 mostly part-time jobs. It would support FedEx’s St. Paul, Minn., hub while expanding its local ground service network.

“When we look at development trends — not just in Cedar Rapids but really across the state and country — warehousing and distribution are becoming more and more important, and these are facilities that cities and other governments are seeking because of their impact from an economic perspective as well as from an employment perspective,” Pomeranz said.

For several companies that have long been located in Cedar Rapids, Mason said, the future growth options available on the sprawling land of the southwest quadrant are drawing some to relocate there.

Rexco Equipment, a construction equipment supplier located on Blairs Ferry Road NE, is one such company that is making the move to the southwest quadrant and away from a commercial corridor where there are more site constraints, Mason said. Other companies that have similarly relocated there include Lil’ Drug Store Products, Road Machinery & Supply and Future Line.

The city also in recent years has seen an expansion of large industrial users that already had a footprint in Cedar Rapids, such as JRS Pharma, General Mills, International Flavors & Fragrance, Diamond V Mills and Bio Springer.

“Some of that is through physical improvements,” Mason said of those expansions. “Other times it's modernizing their facilities with equipment, so we don't necessarily always see a tax base, but it's a significant investment to increase their capacity and operations, and there's usually job creation components with those.”

And new companies are increasingly attracted to look at Cedar Rapids for its two certified sites — Big Cedar Industrial Park and the Air and Land Super Park, which collectively offer 1,472 acres of shovel-ready space. City staff are “always seeing an influx” of requests for information coming through from the state, which markets the sites, Mason said.

A state-certified site offers relevant data and documentation about the spot, such as site characteristics and information about utilities so companies don’t have to do predevelopment work. Locating on one of these sites carries a lower risk to the company.

“We're sort of trying to run the gamut of attracting, aiding existing industries with expansion, and even attracting more smaller companies,” Mason said.

Supporting these new developments and job creation with housing is another layer, Mason said.

Among the city’s estimated $1 billion sum of recent investment in the southwest quadrant are some affordable housing projects as well as the phased $64 million mixed-use American Prairie development by APD LLC, which will be among the largest city residential projects — bringing about 400 residential units online.

As the new commercial and industrial developments create new jobs, Overland said the housing projects generated from those investments will further turn Cedar Rapids’ economic wheel.

“It spins off a lot of other good things,” Overland said.

Vision ‘coming together’

This is hardly the beginning of Cedar Rapids’ efforts to expand its tax base, Poe said.

With more developments springing up in the southwest quadrant, Poe said she hoped the city could work with developers to bring more services to the area, such as a grocery store or instant care facility.

But time will tell what other types of businesses are lured into the quadrant as these projects come online.

"As employers are actually filling those buildings, it'll start to become a place where retailers are going to want to go because they want to capture that consumer base that's there,” Almoayyed said.

The mix of residential, commercial and industrial is generating the growth of this part of town, Pomeranz said — and it’s all been a vision years in the making.

“A number of these properties have been out there undeveloped for a long period of time,” Pomeranz said. “And now, based on all the effort that's been put in, it's all coming together into this really positive growth and development for the community, and in particular this area.”

Comments: (319) 398-8494; marissa.payne@thegazette.com