Two companies renovating facilities in Cedar Rapids hope to get some property tax relief.
Auxiant Inc., a third-party administrator of self-funded employee benefits plans, and Fleck Sales Co., a beverage wholesaler that distributes alcohol to 21 counties in East and Southeast Iowa, have requested an Urban Revitalization Property Tax Exemption designation.
Projects with this designation can receive a tax exemption for all or a portion of the value of new developments or renovations. Cedar Rapids City Council has set a public hearing for March 11 to consider their requests.
Auxiant plans to renovate the former Chamber of Commerce building at 424 First Ave. NE. The $1.8 million project is adding a second floor to the property, which has been empty since July 2012 when the Metro Economic Alliance moved into new offices at 501 First St. SE.
The company bought the building in June 2013 and anticipates construction to be complete by this summer.
Brian Beck, Auxiant director of operations, said in June that the new building will expand Auxiant’s office space by about 50 percent, giving the company room to grow.
Fleck Sales will add 30,000 square feet to its 83,000-square-foot facility at 11125 High Life Court SW. The $2 million project would allow the distributor to consolidate some of its West Burlington operation into its Cedar Rapids location and give it more warehouse space.
“We’re not necessarily selling more (product) just a more diverse group of product,” said Dudley Fleck, president and CEO.
He added that the increasing popularity of craft beer has lead to the company carrying more brands.
Fleck said he hopes to start construction as soon as proper permits are obtained and the frost is off the ground.
“The design is done, we’re just figuring out when to pull the trigger,” he said.
If approved, Auxiant and Fleck Sales would receive a partial tax exemption over a 10-year period, averaging 44 percent per year. The tax exemption only would be applied to the increased property valuation generated by the new additions.
The city of Cedar Rapids estimates that the second-floor addition to Auxiant’s new building could increase the building’s assessed value by $1.3 million, which would generate an additional $50,000 in property tax revenue annually.
This would generate $500,000 in collected revenues over 10 years, with $220,000 deferred as tax exempt, according to the city.
Fleck Sales’s development would increase the property’s value by $1.4 million, which would generate $53,500 in property tax revenue annually. An additional $535,000 in revenue would be collected over 10 years with $235,000 deferred as tax exempt.