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Council also approves agreements for FedEx warehouse, Terex site redevelopment

CEDAR RAPIDS — Michigan-based Alro Steel Corp. is pursuing construction of a regional distribution facility in Cedar Rapids’ southwest quadrant, a fast-growing area experiencing a boom in warehousing construction thanks to its shovel-ready land and easy access to transportation via the airport and highway network.

The Cedar Rapids City Council on Tuesday approved city incentives for a $20 million, 199,200 square-foot office, warehouse and distribution building at 9400 Earhart Lane SW for Alro., a company that would be new to Iowa, with developer FH Development LLC.

The project qualifies under the city’s High Quality Jobs economic development program. Overall, the development is expected to create 40 jobs, with at least 10 positions at or above the state’s High Quality Jobs wage threshold, which is $24.20 an hour.

The city agreed to standard incentives, providing a 10-year, 50 percent rebate of increased taxes generated by the project. The project is expected generate $5.2 million in total taxes over a 10-year period, with $1.9 million being rebated.

City Economic Development Manager Caleb Mason said a development agreement finalizing incentives and project terms should come to the council for consideration in December or January.

Council member Scott Overland, chair of the council’s Finance and Administrative Services Committee, said that Alro Steel Corp. — a distributor of metals, plastics and industrial supplies — brings a product to the area that differs from what Cedar Rapids already offers.

“We’re attracting a new business to Cedar Rapids going along with our big emphasis in attracting large warehousing organizations,” Overland said. “Cedar Rapids is really becoming a hub for warehousing on a national basis.”

Developer Scannell Properties will build a $108.5 million FedEx Ground Package System Inc. warehouse that will create over 400 mostly part-time jobs.

A development agreement outlining project terms that the council approved Tuesday calls for the creation of 359 part-time jobs and 75 new full-time positions, of which 35 jobs will be at the high-quality wage threshold of $23.20 an hour.

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Of the overall $108.5 million investment, $64.5 million comes from the developer’s construction of the building, while $44.024 million will result from the employer’s spending on machinery and equipment, according to the agreement.

Cedar Rapids will reimburse 50 percent of the increment taxes the project generates for each respective building for 10 years. Those payments are subject to annual employment thresholds.

The 479,000 square-foot warehouse and distribution facility at 1035 Commerce Park Dr. SW is slated to be finished by December 2022.

As part of the project, the city will convert a portion of Walford Road SW adjacent to the project from rural gravel to an urban cross section. Scannell Properties and FedEx will cooperate with the city on an application to the Revitalize Iowa’s Sound Economy program.

The council on Tuesday also approved a development agreement for a $32.6 million mixed-use complex at the former Terex site, which will bring 186 new housing units online — a mix of one-, two- and three-bedroom units.

The Hub LLC, an entity of Hiawatha-based Ahmann Companies, is slated to have all three buildings that make up the approximately 200,000 square-foot development at 916 16th St. NE, near Mount Mercy University, finished in 2025.

This development will include 6,400 square feet of commercial space, a rooftop patio and first-floor parking. It will include two new buildings, and the third existing commercial building will be an adaptive reuse.

Construction will start in phases later this year and wrap up by May 2025.

Cedar Rapids will reimburse 100 percent of the increased taxes generated by the project for each respective building for up to 20 years.

The project also received $1 million in workforce housing tax credits from the Iowa Economic Development Authority in September for the project. Those credits are capped at 114 of the overall housing units.

Comments: (319) 398-8494; marissa.payne@thegazette.com

Cedar Rapids government reporter, The Gazette

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