City Proposes Reimbursing Company for Investing in New Office Building

CEDAR RAPIDS, Iowa City Hall is proposing to reimburse Intermec Technologies Inc. half of the additional property-tax revenue it will pay the city as a result of the companys investment of $12.5 million in a new two-story, downtown office building at 601 Third St. SE.

Intermec, based in Everett, Wash., will begin construction on the new facility which company executives have called a world-class design and testing center on April 2 with expected completion by June 2013, the city reports.

The company will move from its current nearby location at 550 Second St. SE once the new 78,000-square-foot building is ready. Intermec earlier obtained approximately $2.8 million in state economic development incentives in the form of forgivable loans and tax credits in exchange for its investment and building plans. The local property-tax reimbursement to the company represents the citys required local match for the firm to obtain state incentives, according to a city staff report to the City Council.

The city estimates that Intermecs new investment will generate $2.2 million in new property-tax revenue over 10 years, with the city keeping half and reimbursing the company half. As part of a development agreement with the city, Intermec agrees to retain at least 200 jobs in the city. The city characterizes the Intermec jobs as high-quality ones with average annual salaries of $85,533 plus benefits.

Intermec is the maker of rugged mobile computers and hand-held computers used in warehouses and elsewhere for inventory control. Earlier this month, the City Council said it supported local incentives for companies and developers who build new office buildings in the downtown. In so doing, the council agreed then to provide local developer Steve Emerson with a 75-percent reduction in property taxes over 10 years in exchange for his investment of $9.6 million in a new, three-story office building at 600 Third Ave. SE.

City officials estimated that Emersons new 45,000-square-foot building will generate $1.366 million in new property tax revenue over 10 years, and 75 percent of that money -- $1.024 million will be returned to Emerson to help cover his cost to develop and build.

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City Proposes Reimbursing Company for Investing in New Office Building