HIAWATHA — Fresh and fetching, high-end — and available.
What sounds like a can’t-miss profile on an online dating site is actually an attractive brick office building in the still-new Longfellow Square commercial development in Hiawatha, a development that is helping to fuel a new bout of anxiety at Cedar Rapids City Hall over Cedar Rapids’ ability to attract and keep businesses.
Cedar Rapids Mayor Ron Corbett has been sufficiently envious of owner Jon Dusek’s Longfellow development — and his other development options in Hiawatha — that he has been forced to take a page out of Dusek’s and the city of Hiawatha’s playbooks.
Dusek, president/CEO of Armstrong Development Co. with headquarters in the family’s former downtown Cedar Rapids department store, says he has learned to spread his risk in the last decade or more.
Not every business, says Dusek, wants to locate in downtown Cedar Rapids — or for that matter in Cedar Rapids at all. Some, he says, have come to like the suburban feel and the easy access to Interstate 380 that Cedar Rapids neighbor Hiawatha has to offer.
As a result, Dusek, 56, a grandson of former department store owner Robert Armstrong, has bought and built on 30 acres of land at the Boyson Road interchange to Interstate 380 at Hiawatha and now has begun to develop another 54 acres there to the north along Tower Terrace Road, where a new interstate interchange is expected to be built in the future.
“I tried to keep them downtown,” he says of some former downtown Cedar Rapids office tenants, such as the Northwestern Mutual company, which now occupies an upscale, brick-and-glass building in his Longfellow Square development in Hiawatha.
“Look, people have different cars,” he says. “They all do the same function. But people pick different cars for different reasons. And that’s the way I look at it.”
Corbett seems to be listening.
Corbett says he has been courting an out-of-state firm of late to move into Cedar Rapids, only to have been told that Cedar Rapids currently does not have an available, high-end, “Class A” office building to match Dusek’s available building in Hiawatha.
Hearing that, Corbett now is proposing to provide property-tax breaks to local developer Joe Ahmann, who says, with the economic help, he will invest more than $30 million in an upscale office park called Fountains, which will include restaurants and retail shops at Edgewood and Blairs Ferry roads NE — in Cedar Rapids.
The current City Hall incentive proposal calls for providing Ahmann a 100 percent property-tax break for five years on taxes that result from his new investment — an approach called tax increment financing, an option widely used in Iowa.
In fact, Ahmann, like Dusek, has a successful development in Hiawatha, and Corbett repeatedly has pointed out that Hiawatha regularly has used tax increment financing to attract such building.
“When you’re told several times that your community doesn’t have the class of office space that meets our minimum requirements and we’re going to a different community next to yours, it stings a little,” Corbett says.
For his part, developer Dusek says “it’s a little bit of silliness” for cities in the metro area to be squabbling over one another’s economic development wins and losses.
“It’s true, on an individual project or company or building, somebody wins and somebody loses,” he says. “I get that. But I also believe that things that are good for Hiawatha are good for Cedar Rapids (and the entire metro area).”
Dusek, Cedar Rapids council member and commercial Realtor Scott Olson, and Hunter Parks, a local developer, all have criticized the extent of the incentive package for Ahmann’s proposed Fountains project, suggesting that the incentives will simply allow Ahmann to lower rents and steal tenants from other developments.
Olson, for one, is suggesting a building-by-building incentive for Ahmann so the city has some feel for whether he’s attracting new businesses to the city.
Longtime Hiawatha City Council member Dick Olson says some members of the Cedar Rapids council have given Hiawatha a bad rap. Hiawatha, he says, never has gone out and recruited a company from another Cedar Rapids metro area to move to Hiawatha.
“Everybody who has come out to Hiawatha has come out on their own,” Olson says.
Companies that locate in Hiawatha, he says, like the city’s easy access to Interstate 380 and the smooth process that the city has in place to get a building plan approved at City Hall.
He notes that the Iowa Legislature has imposed new reporting and transparency requirements on cities and counties that use tax increment financing for economic development, but he says the “anti-piracy” language that suggests Iowa communities are “at war” with one another needs to be revisited.
Olson, too, thinks that any time Hiawatha lands a new commercial business — such as the expansion of Go Daddy’s presence in the metro area back in 2010 after a heated competition with Cedar Rapids — the entire metro area benefits.