Business

Financial decision led to Cedar Rapids First Ave. McDonald's closing

Franchisee says he'll work with city to improve area

A driver turns into the McDonald's, 1530 First Avenue NE, in Cedar Rapids in 2019. (Jim Slosiarek/The Gazette)
A driver turns into the McDonald’s, 1530 First Avenue NE, in Cedar Rapids in 2019. (Jim Slosiarek/The Gazette)

The franchise owner of the McDonald’s at 1530 First Ave. NE in Cedar Rapids has closed the restaurant, but he wants to work with city officials to develop options for improving the area.

Kevin O’Brien of Creative Management in Coralville said the building has some significant structural issues along with damage caused by the Aug. 10 derecho.

”The amount of reinvestment to get the building up to my standards was substantial,” O’Brien said.

“The building structurally has some significant issues. We were at a decision point with the company (McDonald’s) and, rather than put a lot more money into that site, we decided to close it.”

O’Brien, whose family has a 62-year history with the fast-food chain, became the operator of the First Avenue NE restaurant in August 2019 when his company bought four Cedar Rapids and a Marion McDonald’s location from longtime franchisee Jerry Mrozinski of Cedar Rapids.

When O’Brien bought the property, there was hope among city officials for revitalizing the area.

“We invested a lot of money in the other (McDonald’s) restaurants that we bought last year,” O’Brien said this past Friday.

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“We just completed the overhaul of the restaurant on Dry Creek Lane NE and now we are working on the one on Edgewood Road NE.

“It’s a significant outlay, and at this point we couldn’t make the economics work.”

O’Brien said the restaurant’s employees were offered positions at other McDonald’s locations in Cedar Rapids and Marion.

“We always try to keep our people so there is no disruption for them,” he said.

McDonald’s owns the 4,700-square-foot building on First Avenue NE, which was built in 1987.

O’Brien said he wants to work with city officials and McDonald’s to develop options for the building and the surrounding area.

“We had a great conversation,” O’Brien said after a telephone meeting on Friday with City Manager Jeff Pomeranz, City Council member Dale Todd and Economic Development Manager Jasmine Almoayyed.

“We are all committed to working together.”

Almoayed said the city would like to see something develop with the McDonald’s property that is beneficial to the neighborhood.

“Right now, we’re in the brainstorming mode, kind of looking at some of the potential options for that area based on some of the studies that have been done and how the city can move some of that along,” Almoayyed said. “The fact that it is in an opportunity zone, depending on whether the building can be redeveloped or possibly demolished for something new to come in.

“It’s nice that we have a businessman who is connected to the property owner and is proactively reaching out to the city.”

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While the McDonald’s has closed, a building across the street, at 1341 First Ave. SE that was formerly a Kentucky Fried Chicken restaurant, has been remodeled and will soon house a Starbucks Coffee shop.

Almoayyed said the Starbucks originally was scheduled to open at the end of August, but the derecho pushed back the opening date.

Almoayyed also noted that local businessman and developer John Khairallah recently has completed construction of a multi-tenant building on the same side of the street at First Avenue and 15th Street SE.

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