New Office Building Coming to Downtown Cedar Rapids

CEDAR RAPIDS, Iowa — Downtown developer/architect Steve Emerson is investing at least $5.4 million in a new downtown office building now going up on the former site of the People’s Church, 600 Third Ave. SE.

As is commonplace, Emerson is seeking economic development assistance from City Hall in exchange for his investment. Only this time, the City Council is raising questions about just how generous it wants to be.

“There ought to be something in here for us,” council member Justin Shields said this week.

The current incentive proposal put together by the city’s planning staff and Emerson calls for the city to return to Emerson’s company, Progression LC, 75 percent of the new property-tax revenue that will come in from the site over 10 years as a result of the company’s minimum investment of $5.4 million in the new building.

The city estimates that the new investment will generate $1.366 million in new property-tax revenue for the city over 10 years, and under the incentive proposal, $1.024 million would go back to Emerson with the city keeping $342,000.

The new building will retain the jobs of 106 employees and result in the creation of 9 new jobs, according to the proposal.

City Council member Scott Olson, a commercial Realtor who said he supported the Emerson project, nonetheless, wondered why the council was being asked to approve economic incentives now with a building that is already under construction. Olson said, too, that the city needed to pay attention to incentives in the downtown and how that might impact owners of other buildings vying for tenants. The city needed to be careful it wasn’t simply shuffling tenants from one owner’s building to another owner’s, he said.

Council members Monica Vernon, Chuck Swore and Justin Shields wondered why the city couldn’t make some requests of a developer as part of a development agreement in which the city is providing financial incentives.

Swore and Shields said they wanted some way to know if Emerson or other developers seeking incentives are using local contractors and local suppliers while Vernon wondered what design review the city might be allowed to have to ensure that a developer isn’t building “a pole building” in the downtown.

“We ought to have some say,” Shields said. “What do you get for a million dollars?”

In response to the council’s questions, Mayor Ron Corbett asked Jim Flitz, the city attorney, to provide the council with an analysis of what the council may or may not ask of developers.

The council then moved the incentive package ahead for further negotiations between the city and Emerson before the council votes on a final development agreement for the project later this month.

On Wednesday, Emerson said he is not alone among developers in beginning a project even as City Hall is working on an incentive package with the developer. The package now under review by the City Council has been in the works for some time, he said.

Emerson said he needed to start building the new building, which should be open in September, to meet the deadlines of his new tenants.

In terms of the amount of his request, Emerson said he has presented a financial plan to the city that shows the size of the property-tax help he needs in order for the project to “financially make sense.”

“If I don’t get the money, I’m still building the building,” Emerson said. “But if I lose that money out of the project, it will just prevent me from doing developments for the next eight years in downtown Cedar Rapids. Which is not my intent. I intend to keep doing developments down there.”

In answer to Olson’s comments, Emerson said his new building will not simply result in shuffling existing downtown tenants into a new building. One of the new building’s tenants had intended to leave the downtown, one is outside of downtown now and one had left downtown after the 2008 flood and is coming back, he said.

He added that the city’s incentive will be used to pay off the extra upfront costs that have come with building the building. The incentive will not be used to lower tenants’ rents. They will pay “market-rate” rents, he said.

Emerson said all the contractors working on the project are local ones and many of the suppliers are in the downtown already.

“I’m a downtown freak,” he said. “I will use anybody associated with downtown if I can. … I don’t have contractors or suppliers coming from out of town. That’s not at all what I’m trying to do.”

Emerson said the city’s development staff has seen the design of the building, which he called a “very high-end, class A building,” and he said he would be glad to show council member’s what it will look like.

“But I don’t’ think the City Council wants to get into dictating design elements and telling architects what is good or not,” he said.

Emerson’s other projects in the downtown include the Town Centre building, the Paramount office building, the building that houses Principal and the Blue Strawberry coffee shop, the building that houses.

View original post here:
New Office Building Coming to Downtown Cedar Rapids