Government

Cedar Rapids doubles down on 'aggressive' approach to economic development

The city estimates it would provide $800,000 in tax subsidies over 10 years to the three-story Skogman building, at 427
The city estimates it would provide $800,000 in tax subsidies over 10 years to the three-story Skogman building, at 427 First Ave. SE in downtown Cedar Rapids. The building opened in 2019. (Liz Martin/The Gazette)
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CEDAR RAPIDS — The city of Cedar Rapids is expanding its economic development forces and at the same time tightening oversight for awarding public dollars to private organizations helping on similar fronts — underscoring an aggressive approach to a service that 10 years ago was handled externally but is now a top municipal priority.

Cedar Rapids City Manager Jeff Pomeranz’s economic development experience was seen as one of the top skills he brought in 2010 coming from West Des Moines to help Iowa’s second-largest city rebuild from an historic flood. It’s an area of expertise he values.

“Cities have a direct interest in who’s coming to the community from an economic development perspective and who stays in the community,” Pomeranz said. “We have grown (those efforts) over time and become more aggressive.

“Most progressive communities’ city governments are very involved in economic development. It’s not unique to Cedar Rapids.”

Starting not long after Pomeranz arrived, Cedar Rapids launched an economic development office. That slowly has grown and taken on more duties in recruiting and retaining businesses, helping existing businesses expand, adding tax base and growing the workforce, which this year will hire a workforce development specialist.

Officials say they don’t anticipate the city’s expanding role will duplicate efforts with groups such as the Cedar Rapids Metro Economic Alliance, which in current and previous incarnations under different names has been organized to lead economic development efforts in Cedar Rapids and surrounding communities.

“Particularly as it relates to workforce, there is plenty of work for everybody to do and plenty of needs from our business standpoint that we don’t have any issue at all with that,” said Doug Neumann, executive director the Economic Alliance. “We work together a lot and it is a strong relationship.”

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Neumann and Pomeranz noted the Economic Alliance has a regional focus, while the city pays attention to its own needs.

“We applaud regionalism, but also need to focus on the city of Cedar Rapids,” Pomeranz said. “We are not trying to do other people’s work, but there is definitely a void from our perspective ... .

“We are not trying to replace them. We work with and support these organizations. We just needed to improve our own work.”

Cedar Rapids is the largest investor to the Economic Alliance. The city paid $75,000 in membership fees this year. The city also has a memorandum-of-agreement with the Economic Alliance for economic development services that has shrunk from $120,000 in fiscal 2018 to $105,000 in fiscal 2019 to $95,000 in fiscal 2020.

The city has financial agreements with the Economic Alliance on a number of fronts in addition to the MOA and was working to pull those numbers but they were not available in time for this article’s deadline.

City officials provided several data points to support that their approach is working. For example, since 2016, employment in Cedar Rapids has expanded by 3,256 net new jobs, the city’s total assessed value had increased by 17 percent from 2015 to 2018, and public-private projects — in which the city used tax incentives to leverage investment or job creation — grew from three projects worth a total of $60.9 million in capital investment in 2010 to 19 project worth $181.8 million in 2019.

‘The No. 1 issue’

The city’s economic development office started in 2013 with the hiring of Jasmine Almoayyed, the city’s economic development manager. With the workforce position, for which the hiring process is underway, the office is increasing to four people.

“Persistently, the No. 1 issue on visits with employers tends to be their struggle to find people to fill middle to low skill jobs,” Almoayyed said.

The new workforce specialist, she said, could identify commonalities in skill gaps and work on solutions with organizations such as Kirkwood Community College or the Catherine McAuley Center.

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Caleb Mason, an economic development analyst long based in the community development department helping negotiate public-private partnerships, has been reclassified under the economic development group, which is part of the city manager’s office. This move is largely symbolic as there is no change to Mason’s job responsibilities, pay or even his office.

A third change in the works is a new application process to guide that the city awards economic development funds to groups that understand and can meet the city’s specific goals identified in its strategic plan.

This is under development and would go before the City Council for review and approval, perhaps this summer.

The city didn’t have the latest numbers available but in the past has had a pool of $320,000 to award to a handful of organizations, including the Economic Alliance, Entrepreneurial Development Center and NewBoCo. Those groups typically appear each year before City Council to report their progress at the time their agreements with the city are renewed.

“I think it will formalize the process, and perhaps more specifically identify goals the city expects to achieve with its investments,” City Council member Tyler Olson said. “I think the main goal here is to match dollars with outcomes.”

Comments: (319) 398-8310; brian.morelli@thegazette.com

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