Cedar Rapids approves incentives for CRST building

CEDAR RAPIDS - The City Council on Tuesday approved an economic incentive package for trucking firm CRST International Inc. that the company said it needed to build a $37 million, 11-story headquarters building on the riverfront in downtown.

With city and state incentives in place, CRST has said it expects to start construction in August with project completion expected in January 2016.

The council's two newest members, Ralph Russell and Susie Weinacht, expressed strong support for CRST and the building project.

Weinacht said the building is bringing with it a minimum of 80 new full-time jobs, and she said it will add to the already-increasing vibrancy of downtown.

Russell said the CRST headquarters was more than a building and called it a commitment from John Smith, CRST's board chairman, the Smith family and CRST to keep a 'homegrown, world class organization in our community.”

'This is a unique opportunity,” Russell said. 'This building in my opinion is really the most significant real estate project that ... will have been undertaken in this community for decades,”

The council vote was 6-1 to approve the development agreement.

Mayor Ron Corbett, who is a special projects manager for CRST, turned the meeting over to council member Monica Vernon, mayor pro tem, and did not participate in the discussion or vote.

Council member Scott Olson voted against the measure. He said the city should have charged CRST more for the property, which is the site of the former First Street Parkade between Second and Third avenues SE; should not be paying to remove foundations on the property; and should limit CRST's property tax break on the building to 10 years and not 15 to 20 years.

Olson agreed with Dennis Jordan of the Cedar Rapids Metro Economic Alliance, who spoke in favor of the CRST project, saying the CRST building will change the postcard photo of downtown Cedar Rapids.

Olson, though, called it an 'expensive postcard.”

In the development agreement between the city and CRST:

CRST agrees to invest at least $31 million in the building's construction and agrees that the building will have a minimum property value of $18 million on which to base property taxes. The CRST project also must add 80 full-time employees.

In return, the city will return to CRST 100 percent of the property taxes it will pay on the property for 15 to 20 years, the exact length of years dependent on the property's changing taxable value and the amount of property taxes generated each year. The amount of returned taxes, which would not be generated but for the CRST investment, will total $8.35 million in today's dollars,

In addition, CRST will pay $499,217 for the property, which includes a payment of $37,557 to pay off an existing lease for the surface parking lot now at the site.

The city will pay CRST $368,778 to remove additional foundations on the site that were not removed when the city-owned Parkade was demolished after the flood.

The agreement also calls for CRST to incorporate a flood wall into the building's lower-level parking area and to build a stormwater vault. Subsequently, the city will lease or purchase the flood protection elements.

The city also agrees to convert Second and Third avenues SE in the heart of downtown from one-way to two-way streets - which the City Council has talked about for years - to provide better customer access to the CRST building.

The building will consist of three levels of parking and eight levels of office space with some retail on the first floor with parking. Bankers Trust is leasing the top two floors, and CRST will occupy two of the building's floors.

Dan Thies, principal at OPN Architects Inc. of Cedar Rapids, said a portion of the building's fourth floor will reach out to the river, providing views of the river like none other in town.