Cedar Rapids council backs three TIF deals

CEDAR RAPIDS - Three tax increment financing or TIF incentives were endorsed this week by the City Council.

The projects that will benefit include The Hunter Companies' project to build a $12 million office building for Berthel Fisher & Company with retail space and a restaurant at Edgewood Road NE and 42nd Street NE; the Hunter Companies' $16 million project to demolish the former Nash Finch distribution center at 1201 Blairs Ferry Rd. NE to make way for a new commercial development called Northtowne Market; and New Pioneer Cooperative Society's $5.5 million renovation of a vacant building at 3338 Center Point Rd. NE.

Each of the incentives will allow the property owner to forego the payment of property taxes on the value of the new investment for five years.

In the Berthel Fisher project, the city estimates a tax savings for the property owner of $1.6 million over five years and the payment of $4.79 million in property taxes to local jurisdictions over the next 15 years.

On the Nash Finch property, the city estimates a tax savings to the property owner of $2.1 million for five years and the payment of $6.4 million in property taxes over the next 15 years.

The New Pioneer project will see $731,500 in tax savings to the property owner over five years and the payment of $2.2 million in property taxes over the next 15 years.

All the properties currently generate some level of property taxes for local jurisdictions, and that base tax level will be paid during the five-year, tax-break period of the incentive.

During public hearings this week on the Nash Finch and New Pioneer projects, Dennis Jordan, economic development strategist for the Cedar Rapids Metro Economic Alliance, told the City Council this week that the development projects were important for the city.

Jordan said The Hunter Companies was taking on risk at the vacant Nash Finch property, the demolition and redevelopment of which likely would not take place without city incentives, he said. The property once was at the edge of town, but now is on a major commercial artery in the city, he said.

City Council member Monica Vernon said the Nash Finch property was a vacant industrial brownfield 'in the middle of the city,” and she doubted that a developer would come forward to redevelop the property but for a city incentive.

Jordan said the council's incentive for the New Pioneer project may serve as a catalyst for other investment in the Center Point Road NE commercial corridor, he said.

Council member Scott Olson said New Pioneer already was renovating the Center Point Road NE building, and he asked Jennifer Pratt, the city's interim development director, why the city was being asked to provide a property-tax break on a project that already was proceeding without it.

Pratt said the city had been in discussions with New Pioneer for some time, but she said the business's move to renovate and open has outpaced the Community Development Department's ability to get the incentive package to the City Council. New Pioneer has said it hopes to be open by the end of the year.