CEDAR RAPIDS — A Cedar Rapids logistics company is proposing nearly 800,000 square feet of new warehouse and distribution space and creating at least 25 jobs in the southwest part of the city.
Specifics have not been announced, but information released in a Cedar Rapids City Council agenda packet show Midwest Third Party Logistics has proposed investing $30 million to build three new warehouse facilities at 4645 20th Ave. SW.
Cedar Rapids Mayor Ron Corbett said it would be a good thing for Cedar Rapids.
“More jobs and more property tax base,” Corbett said.
When it meets at 4 p.m. Tuesday at City Hall, 101 First St. SE, City Council members will consider granting conditional approval of $2.3 million in tax breaks for the project over 10 years under the city’s high quality jobs exemption of its economic development program.
Midwest Logistics is a warehousing, transportation and supply chain management company with headquarters in Cedar Rapids at 4515 20th Ave. SW, Suite C. The company is owned by Rick and Marsha Stickle and has two other locations in Cedar Rapids and a location in Savanna, Ill.
The first proposed building would be 227,500 square feet in the northwest corner of the plot bound by 20th Avenue SW, Wilson Avenue SW, Jacolyn Drive SW and city land. The second to be built would be in the northeast corner and measure 192,500 square feet. The third would take up the lower half of the land and would be 367,500 square feet.
The structures would be built in phases.
The 10-year, 50-percent tax break is based on a post-development assessed value of $18.75 million. The land for the development is split in two parcels, which both are owned by the Stickles. They have an assessed value of a combined $1 million.
The southern most of the two parcels was reclassified from commercial to agricultural land in 2017 causing the property assessment to dip from $768,300 in 2016 to $70,000 in 2017. This creates more room for incremental growth in property value, which in turn expands the potential for how much taxes are reimbursed to the company.
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Company officials predict 10 jobs or more at each facility will meet the $20.76 per hour threshold for a high quality job. The city would require only 10 meet the state of Iowa’s high quality wage threshold for the Cedar Rapids labor area to qualify for the incentive, according to city documents.
The City Council also will consider directing staff to begin the process of designating a new urban renewal area. This is the mechanism for creating a tax increment finance, or TIF, district, through which the city can provide tax breaks for a property owner. The city’s economic development program allows taxes from new tax value to be waved or rebated if a developer achieves certain city objectives, such as creating new jobs and expanding target industries. The property owner still must pay taxes on value before the property was improved.
City staff are backing the proposal, although they are seeking a timeline for the phases of project, specifying job creating requirements and tying tax rebates to job creation for each respective building.
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