CEDAR RAPIDS — Cedar Rapids and state officials are financially backing a new 120-acre industrial park near Eastern Iowa Airport, where a developer aims to invest millions in boosting the city’s profile as a hub for business attraction and growth.
The so-called Midwest Commerce Park is planned to start with a 250,000-square-foot food-grade warehouse and distribution center, at 9940 Atlantic Dr. SW. It will have space to expand up to an additional 100,000 square feet, for an approximate $11 million.
Worley Warehousing, a Cedar Rapids-based provider of ambient and temperature-controlled warehouses, will expand into that space.
The property also holds land for at least three more warehouse facilities, totaling 800,000 square feet of additional construction, for projected total capital investment valued at $57 million.
The park’s value could grow if the city or developer Midwest Commerce I, a Skogman Commercial affiliate, is successful in enticing business prospects to set up shop there.
Cedar Rapids’ current 2.9 percent vacancy rate for industrial space has restricted economic growth, both for area companies seeking to expand and new companies hoping to locate in the area, city officials wrote in a recent grant application to the Iowa Department of Transportation.
“We’ve heard from multiple entities that there’s interest in developing warehouse space in Cedar Rapids,” said Jeff Pomeranz, Cedar Rapids city manager. “That’s coming from developers that have determined the need, based on their own research.”
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Demand for that space in Cedar Rapids has increased over the past few years, as more companies have seen value in the city’s proximity to 72 million consumers within a day’s drive, said economic development manager Jasmine Almoayyed.
“This market for a very long time has been build to suit, so we’ve not historically had a ton of available spaces sitting empty,” she said.
The developer is working with “numerous” potential clients to occupy at least three properties in the project area, and interested parties continue requesting information on warehousing and distribution space from regional economic development agency ICR Iowa, the city’s grant application says.
Among the companies the application lists as likely candidates for growth at the park are General Mills, Cargill, International Paper, Red Star Yeast and Quaker Oats.
Those two parks combined total approximately 2,000 acres, and industries attracted via large economic development projects there will need facilities for raw supplies and finished products, per Cedar Rapids’ grant application.
Across the nation, commercial warehousing dramatically increased in recent years, from 49 million square feet of construction started in 2010 to an estimated 283 million square feet in 2018, a March report from Dodge Data and Analytics found.
The New York City-based construction insights company said the upsurge could be attributed in large part to the advent of online shopping, or e-commerce, and the resulting need for distribution centers in the product delivery process.
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Cedar Rapids will develop road access to Midwest Commerce Park, with help from the Iowa Transportation Commission, which on Nov. 12 awarded the city a grant of up to $819,076, under its Revitalize Iowa’s Sound Economy, or RISE, program.
The grant covers half the city’s $1.64 million cost in creating 2,100-foot Commerce Park Drive and a right-turn lane on Sixth Street SW. Work is scheduled to take place between April and October 2020 and create access to approximately 75 acres of the park.
Development plans also call for the creation of Midwest Park Drive and an extension of Atlantic Drive SW to boost accessibility.
Cedar Rapids City Council members on Tuesday also approved a 50 percent reimbursement on taxes generated at the new Worley Warehousing center over a 10-year period, as the local match for the state’s High Quality Jobs program.
The city’s incentive will reimburse Midwest Commerce I $1.6 million on $4.2 million in total taxes generated.
The project is expected to create 18 new jobs, including four at or above the state program’s hourly wage threshold of $22.27.
The Iowa Economic Development Authority Board on Friday morning approved High Quality Jobs tax benefits worth $400,000 for the 250,000-square-foot warehouse, which it said would create three jobs at or above the wage threshold and amount to $3.7 million in capital investment.
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