Government

Now bigger, redevelopment site seeks more Cedar Rapids tax breaks

Former Nash Finch property to attract 300, not just 70, new jobs

Customers park outside the Northtowne Market, a strip center built on the former Nash Finch food company property along Blairs Ferry Road NE in Cedar Rapids. The developer has acquired more land and plans to increase the number of jobs there to 300, a more than fourfold increase from initial plans. (Jim Slosiarek/The Gazette)
Customers park outside the Northtowne Market, a strip center built on the former Nash Finch food company property along Blairs Ferry Road NE in Cedar Rapids. The developer has acquired more land and plans to increase the number of jobs there to 300, a more than fourfold increase from initial plans. (Jim Slosiarek/The Gazette)
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CEDAR RAPIDS — Gander Mountain is out and a Rockwell Collins day care and Collins Community Credit Union headquarters are in.

The pieces are shifting in what Hunter Companies of Cedar Rapids pitched a few years ago as a commercial development called Northtowne Market, the new use for the since-demolished distribution center for the Nash Finch food company at 1201 Blairs Ferry Road NE. Ultimately, the market in the northeast quadrant will be a bit bigger and could become more valuable than initially promised.

“It’s morphing but it is great to see development continuing,” said Cedar Rapids City Council member Scott Olson. “With the things being considered for the site, it will be an enhancement to the northeast quadrant.”

The council voted unanimously Tuesday evening on a resolution to negotiate an expanded tax incentive plan for Northtowne Market. The plan won’t be finalized until a later date.

The new incentives, in part, would support improvements and agreements that already had been made.

The proposed terms would expand upon a 2015 development agreement between the city and Hunter. Changes include creating 300 jobs, up from 70 in the original pact; developing an assessed value of $40 million, up from $13.2 million; increasing the developer’s investment from a minimum of $20 million to a minimum of $55 million; and extending Sammi Drive to connect with Rockwell Drive NE. Olson in particular touted the importance of the road connection helping with traffic flow.

So far, the property has seen limited redevelopment, including a stand-alone Burger King and a strip mall with Domino’s, Jimmy John’s, Elevate Salon and Spa, Moe’s Southwest Grill and U.S. Cellular. among others. The project has been billed as a $70 million development since at least 2016.

The original tax break allowed Hunter to forego 100 percent of payment of property taxes on the value of the new investment for five years, worth about $2.1 million.

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Hunter has requested an additional incentive of $3.56 million, which would extend the reimbursement one to two years, said Caleb Mason, the city’s economic development analyst.

Hunter representatives did not return messages seeking comment for this article.

Mason, in recommending the amendment, noted the scope had grown. Hunter had acquired railroad right of way and the old Lehigh Cement Co. property, growing the size of the development from 25 to 32 acres, he said. Hunter acquired the Lehigh property in 2016 for $1.1 million, and purchased railroad right of way at the south edge of the property for $395,630 in April.

Hunter bore the costs for demolition, remediation and clean up associated with demolition of the Lehigh space. Those costs were “over and above the original budget and contingencies,” Mason said, as part of the justification. Changing the road alignment could prove costly, and the new master plan includes a recreational trail along the old railroad right of way, he said.

“This change in scope did include increased demolition costs, but also generates an increased intensity of uses — Collins Credit Union headquarters and Rockwell Daycare,” Mason said. “The proposed amendment is commensurate with the increased investment and employment commitments.”

The property’s value has increased from $2.2 to $20 million, and it is on track to reach $46 to $50 million, Mason said.

Generally, the higher the value the more taxes the property generates for public use once the tax breaks end.

In August, Collins Community Credit Union announced plans to build an 86,000-square-foot headquarters in the plaza with completion by spring 2020. The credit union had said 200 of its 300 employees in Des Moines and Eastern Iowa would relocate there.

Rockwell has agreed to lease a 52,000-square-foot space at 1215 Skylee Drive NE for its Child Development Center, which supports 300 to 500 children. That could open in early 2019. The space originally was designed for Gander Mountain, which backed out before ever moving in after filing for bankruptcy protection in 2017. Gander Outdoors has reopened where it used to operate at 2140 Edgewood Road SW.

Council member Ann Poe said she is pleased to see someone take on the old Nash Finch site.

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“I love to see the revitalization of this awful site,” she said. “It was an eyesore for so many years. I appreciate Hunter is going in an making it an asset to the community.”

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

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