Cedar Rapids City Council backs plan to redevelop former car dealership site

Site to be used for commercial, residential space

Cedar Rapids City Hall on the corner of 1st Avenue and 1st Street East. (file photo)
Cedar Rapids City Hall on the corner of 1st Avenue and 1st Street East. (file photo)

CEDAR RAPIDS — The City Council on Tuesday backed a North Dakota company’s request to redevelop an old McGrath dealership into new commercial and residential space.

KC Land Holdings LLC’s proposal calls for a $17 million investment to redevelop 4001 First Ave. SE by demolishing three commercial buildings, building two new ones and constructing a 104-unit multifamily building. The site formerly was a McGrath Ford and Hyundai dealership, and most recently served as home to the Iowa Derecho Resource Center before it moved.

Cedar Rapids Economic Development Analyst Caleb Mason said the commercial components would include a Tommy’s Express Car Wash and a Hy-Vee Fast and Fresh, described as a hybrid grocery and convenience store.

Mason said the property’s current value is $4 million and city officials estimate it will rise to $13.9 million with the commercial and residential components.

The development would generate $4 million in taxes over 10 years, he said, and of that $1.7 million would be exempted as an incentive under the city’s Brownfield/Grayfield Redevelopment program. Officials estimate the project will create 20 jobs.

“This is a great opportunity to redevelop kind of a tired old site,” council member Scott Overland said.

As it stands, he said the site lacks green space and he encouraged creating more of it in the redevelopment so multifamily building residents have better access to a parklike setting.

“I think it would be great opportunity for the city to really do some incentives to really retain some of the water on site but also create some green space for a better environment,” he said.

Council member Ann Poe, who chairs the council’s Development Committee, voted against the proposal. Poe said she did not like the planned placement of garages and suggested potentially placing them behind the housing units.

“With all of our design standards, I feel like we’re still missing the mark here,” Poe said.

While Mason pointed out some green space in the proposal, Poe said more of it would enhance the development “immensely.”

‘Mega site’ gets $4 million grant

The City Council also approved a memorandum of understanding with the Iowa Land and Building Company, a subsidiary of Alliant Energy, for the company to provide a one-time $4 million grant to the city to enhance public infrastructure at the Big Cedar Industrial Center.

The center is a 1,931-acre “mega site” available for business development located near Interstate 380 and The Eastern Iowa Airport. The Iowa Economic Development Authority in 2018 certified it as the state’s first and only such site so far to attract commercial and industrial development.

The city will use the funding for improvements at the site or to directly serve the Big Cedar Industrial Center. The city would design, build, own and maintain the infrastructure.

Mason said this positions the property for post-pandemic industrial prospects, “which we anticipate to see an increase in as economic conditions improve.”

The funds are to be used by Dec. 31, 2025, under the agreement.

“I’m still confident there will be projects,” Mayor Brad Hart said. “Get the first one and others will follow, so I think it’s going to be a terrific long-term project for Cedar Rapids.”

Comments: (319) 398-8494;

Give us feedback

We value your trust and work hard to provide fair, accurate coverage. If you have found an error or omission in our reporting, tell us here.

Or if you have a story idea we should look into? Tell us here.