CEDAR RAPIDS — City Manager Jeff Pomeranz on Friday called it “a statement building” and promised it will change the city’s skyline dramatically.
Pomeranz was reacting to trucking company CRST International Inc.’s announcement Friday that it will move forward on its proposal — first floated publicly a year ago — to build a $37-million, 11-story office tower on the downtown riverfront for its corporate headquarters.
The company said construction of the building is slated to start in August and be complete by January 2016 with the help of state and city financial assistance.
The state approved $1.7 million in incentives last month, and Cedar Rapids City Council is slated to approve a development agreement with incentives at its meeting on Tuesday.
With its Friday announcement, CRST released drawings of what the building, designed by OPN Architects Inc. of Cedar Rapids, will look like, and it said that Bankers Trust will serve as an anchor tenant in the building and occupy its top two floors plus retail space on a lower level.
CRST’s headquarters will occupy two floors of the building as well.
The 11-story building will include eight floors of office space and three floors of parking with some retail space on one of the floors of parking.
“All of the financial pieces and the partnerships we’ve been working on for many months have finally aligned to make construction of the new building a reality,” John Smith, CRST’s board chairman, said on Friday. “… CRST is extremely excited to join the downtown business community.”
Bankers Trust will be moving from its current location downtown to the new CRST building, which will provide it 50 percent more office space than it now has so it can expand its business.
“Bankers Trust is proud of the Cedar Rapids community and excited to be a part of this signature project,” said Patrick Deignan, president and chief executive officer of Bankers Trust Cedar Rapids.
City Manager Pomeranz said Smith and CRST did not have to build a headquarters in downtown and easily could have built on the company’s westside Cedar Rapids campus.
“But John Smith and (wife) Dyan and CRST have decided to make a very exciting commitment to downtown with the addition of this beautiful building,” Pomeranz said. “It will be great to see it rise from what is now a parking lot. It’s not every day that we have an 11-story building built in downtown.”
Pomeranz and Jennifer Pratt, the city’s interim development director, spelled out the specifics of the city’s proposed development agreement and incentive package for the building project.
The agreement calls for CRST to invest at least $31 million in the building’s construction and for the building to have a minimum property value of $18 million on which to base property taxes, they said. The CRST project also must add 80 full-time employees.
In return, the city will return to CRST 100 percent of the property taxes it will pay on the property for 15 to 20 years, the exact length dependent on the changing taxable value and the amount of property taxes generated each year.
The amount of returned taxes, which would not be generated but for the CRST investment, will be $8.35 million in today’s dollars, Pomeranz and Pratt said.
CRST is building on the former site of the city-owned First Street Parkade, which had been slated for demolition at the time of the 2008 flood and since has been demolished.
CRST will pay $499,217 for the property, which includes a payment of $37,557 to pay off an existing lease for the surface parking lot now at the site.
At the same time, the city will pay CRST $368,778 to remove additional foundations on the site that were not removed when the city-owned parkade was demolished after the flood.
The CRST-city agreement also calls for CRST to incorporate a flood wall into the building’s lower-level parking area and to build a stormwater vault in the structure as well. The city subsequently will lease or purchase the flood-protection elements.
The city also agrees to convert Second and Third avenues SE in the heart of downtown from one-way streets to two-way streets — which the City Council has talked about for some years — to provide better customer access to the CRST building.