Business

Joe Ahmann's $120 million plan at Highway 100

Designer-turned-developer has invested in several Edgewood Road NE site

Joe Ahmann looks through the floor plan for the second floor of The National building on 12th Ave. SE in Cedar Rapids on Friday, Dec. 7, 2018. The National currently houses Brewhemia, Caucho and HBK Engineering. Ahmann, who owns Ahmann Companies, the parent company to Compass Commercial Services, Fusion Architects, Ahmann Design, and Pivot Real Estate, has redeveloped major swathes of land in Cedar Rapids like the NewBo district. (Rebecca F. Miller/The Gazette)
Joe Ahmann looks through the floor plan for the second floor of The National building on 12th Ave. SE in Cedar Rapids on Friday, Dec. 7, 2018. The National currently houses Brewhemia, Caucho and HBK Engineering. Ahmann, who owns Ahmann Companies, the parent company to Compass Commercial Services, Fusion Architects, Ahmann Design, and Pivot Real Estate, has redeveloped major swathes of land in Cedar Rapids like the NewBo district. (Rebecca F. Miller/The Gazette)
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HIAWATHA — Joe Ahmann carries a set of blue folders from his office at his Hiawatha headquarters, some of them inches thick from the stacks of documents and drawings inside. He wears a quarter-zip sweater with the sleeves pushed up to just below the elbow.

“It’s the way I think, with papers in front of me,” he said, as he unfolded property maps and building renderings on a conference room table during a discussion earlier this month about his businesses.

Ahmann, through his four companies, has built one of the widest footprints of any commercial developer in Cedar Rapids, along with several projects in Iowa City, Coralville and elsewhere.

Now, he’s taking a slow approach to a critical phase of his biggest set of projects yet — a retail build-out of the northernmost point of Edgewood Road that’ll reach into the nine-figure range.

From farm to drawing table

Ahmann, 52, was the fourth in a family of nine children on a farm in Dubuque County. He was nearing his high school graduation in the midst of the Farm Crisis and didn’t want to get into the family business — but he didn’t feel the urge to go to a four-year college and was planning on staying near his home and working construction.

He did have a penchant for drawing and shop class, and at a teacher’s suggestion, he enrolled in Kirkwood Community College’s drafting program and graduated in 1985. While studying, he took a part-time job for a residential construction firm in Marion and took an interest in designing single-family homes.

“I think at the time, they were designing one of the most expensive homes ever built in Cedar Rapids at the time, something like $350,000, and I thought, ‘Oh, my God, this is such a big deal, this is so cool,’” he recalled.

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After stints in Texas and in other jobs, he started Ahmann Design Inc. to sell his home designs nationwide through catalogs. One of his home plans won national attention by winning a home design competition held by the American Institute of Building Design. A profile in a Better Homes and Gardens specialty magazine came soon after.

entry into commercial development

Ahmann was pretty pleased with where he was during this past decade’s latter half. The design company was booming, as was any company involved in residential homebuilding in that time frame, from people using cheap credit to build and buy homes at a blistering pace.

Looking back, Ahmann said he didn’t fully realize the warning signs of what was to come beginning in 2008, when the housing bubble burst, affecting much of the global economy.

Housing starts across the country slowed to a crawl. Ahmann Design had to shed jobs to stay afloat, going from about 27 people to five.

“Sometimes I look back and wonder how we survived that because it was brutal,” he said.

Ahmann needed to diversify his business out of the residential sector if the company was to survive. He was working in a coffee shop when a construction superintendent from Regency Homes, then the biggest homebuilder in Iowa, walked in and told him it was filing for bankruptcy.

Ahmann hired him on the spot, he said, and started his construction company, Compass Commercial Services, shortly after.

Ahmann’s developments at the time were concentrated in Hiawatha. He didn’t have an interest in developing in Cedar Rapids at the time, saying it took too much effort to get building plans approved by city officials.

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keeping busy

Today, Ahmann oversees four companies — Ahmann Design, Fusion Architects, Compass Commercial Services and Pivot Real Estate, all based out of his Hiawatha offices.

He draws his constant endurance for work from his childhood on a farm, where he and his siblings each covered a share of the chores.

“When I first moved to Cedar Rapids to go to school, I was sitting around at nine o’clock in morning feeling like I should be doing something,” he said. “ ... I couldn’t sit still, something felt wrong.”

Ron Corbett, then-mayor and now business retention and expansion strategist with the Cedar Rapids Metro Economic Alliance, said Ahmann was one of several developers to start building in earnest after the floods, noting he focuses heavily on details of his projects.

“He’s not a flamboyant individual, he’s just a meat-and-potatoes developer,” Corbett said.

Ahmann said he doesn’t have a lot of hobbies outside of work. He golfs when weather permits, but his main pastime out of the office is remodeling interiors, whether it’s in his own home or helping out friends and neighbors.

“It’s therapy, you go and you don’t have to think about anything,” he said.

highway 100

Ahmann’s biggest play is around two points in the northeast quadrant of Cedar Rapids, between and near the intersection of Blairs Ferry Road NE and Edgewood Road NE and the Collins Road-Edgewood Road NE interchange.

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The area includes the 19-acre Fountains development, the 21-acre Peck’s Landing, two lots south of Highway 100 and the recently proposed Edgewood Town Center.

Ahmann estimates he’ll put about $120 million over the next decade into building a series of retail and office developments, backed by an investment group.

Cedar Rapids officials are close to capping off years of efforts to connect it to U.S. Highway 30 and form a beltway across western Cedar Rapids through town and into Marion.

That makes the intersection of Edgewood Road NE and Blairs Ferry Road NE a target for long-term development. If housing spurs along Highway 100, drivers likely would take Highway 100 into the area and drive by the intersection to reach businesses farther east on Blairs Ferry Road NE, or to access shops on Edgewood.

The Iowa Department of Transportation estimated about 7,800 vehicles per day where driving on the open portion of Highway 100 when officials last counted in 2017. The Corridor Metropolitan Planning Organization, which sets transportation policy for the region, projects that figure will rise to 12,000 per day by 2040 as housing is built along the road.

Hy-Vee operates a store in the Fountains, which draws customers from Cedar Rapids and Hiawatha.

Ahmann previously told the city a new-to-the-area retailer is under talks to fill a 200,000 square-foot anchor building in Edgewood Town Center.

The development also would feature a number of smaller retailers, offices and possibly some residential units built over the subsequent five to 10 year, Ahmann said during a Nov. 13 Cedar Rapids City Council meeting.

“This is one of the larger mixed-use single development projects that has been brought forward to the city in quite some time,” Ahmann said at the meeting.

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He hopes to have secured the retailer in time to announce it sometime in the late first quarter or second quarter of 2019.

Portfolio driven

After a period of aggressive commercial construction over the past few years, Ahmann is shifting his focus on projects already in his portfolio.

Interest rates have climbed steadily over the past two years following the Federal Reserve’s lead, construction costs are rising and various tax credit programs are starting to expire, he noted.

But his bigger concern is finishing projects faster than retailers can fill them. Unoccupied buildings eat into capital quickly, and Ahmann is rolling back speculative moves on project leads.

“I think people see all this (large development projects) and think it’s going to happen overnight,” he said. “That’s not the plan, nor do we want it to.

“Honestly, I keep telling our guys to slow your roll. Go listen to that Brothers Osborne music, ‘Slow Your Roll,’ because we’re not in a hurry.”

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