CRST takes steps for downtown

Council to back state aid application

By Rick Smith, The Gazette
Published: May 11 2014 | 12:01 am in Business Rotator, Cedar Rapids, City Council, Development, Government, Government Rotator, Local News,

CEDAR RAPIDS — No downtown on the move wants a prime piece of riverfront development land to stay a sprawling asphalt parking lot forever.

The future of just such a downtown parking lot across from the Alliant Tower on First Street SE has gotten a little shakier as Cedar Rapids trucking company CRST International has taken a fresh new step in its plan to build an 11-story company headquarters on the site.

On Tuesday, the Cedar Rapids City Council is slated to back a Business Financial Assistance application to the Iowa Economic Development Authority for economic development assistance for CRST's proposed $36 million world headquarters building.

The company — with about 7,000 employees including truck drivers nationwide and more than 500 office employees in Cedar Rapids — is seeking $1.355 million from the Iowa Economic Development Authority in investment tax credits and $401,580 in state sales tax refund money to support the building's construction, according to a report from the city's Community Development Department to the city council.

A required city match of state funds would come from the reimbursement of property-tax revenue to the company that will result from the company's investment, the city report noted. The report said the city department now plans to present a formal development agreement between the city and CRST to the council at its June 10 meeting.

Sending a message

“The plan calls for a very attractive, significant building that will add a lot of excitement to the downtown and will add to the job base and tax base,” Monica Vernon, mayor pro tem and chairwoman of the City Council's Development Committee, said on Saturday. “Kudos to CRST for looking to invest in our community once again.”

City Council member Scott Olson, a commercial Realtor with an office downtown, on Saturday said CRST's proposal “sends a message” that it makes sense to invest and build in the downtown even though additional flood protection is not yet in place.

John Smith, CRST's board chairman, on Saturday said he hopes is the company can break ground on the downtown office tower this fall, and he is “cautiously optimistic” that construction will take place.

At the same time, he said several steps related to financing the project, including securing state economic development support, needed to be taken before construction is assured.

One of those steps is to sign lease agreements with corporate tenants to help fill up the new downtown building, he said.

“Let's put it to you this way, until somebody commits to signing something, we may be talking, but it doesn't mean anything,” Smith said. “ I'm talking to lots of people about coming downtown into our potential building, and once we get some signatures — I'm not suggesting I have to fill the building up, but I need some major tenants — and once we get all the financing all set up then will make a decision to go.”

Smith said CRST's plans call for the riverfront tower to have three floors of parking, which will eliminate flood risk to the building, and eight floors of offices.

He said CRST would use two floors of the office space and lease out the rest.

'Come downtown'

It was a year ago when Smith first floated the concept for a new downtown headquarters, and he said Saturday he had hoped to start construction by the end of 2013.

“These are very complicated things, we're working with lots of different people and they all have to come together,” Smith said.

Smith said CRST has considered building a new headquarters building near its campus, which itself has been expanding on 16th Avenue SW in Cedar Rapids, and he said the company also looked “very seriously” at purchasing farmland property near The Eastern Iowa Airport.

At the same time, though, he said Tom Aller, recently retired president of Alliant Energy's Iowa operations and longtime executive of the downtown development entity 2001 Development Corp., “has constantly hounded me to come downtown.”

Smith now is chairman of the 2001 Development board of directors, and he said he is a believer that a strong Cedar Rapids depends on a strong downtown.

“As a chairman of 2001, I want to see that downtown really develop,” Smith said. “And when I found out that the last office building of any size was the Great America Building and that was (built in ) 1998 or 1999, I said, 'Wow,' I shook my head, and I thought, 'That's too slow. (We've) got to move this thing ahead a little bit.'

“And so, I really felt it was important for the community, if there was the demand, to build a Class-A building. So I've been working on it for quite a while.”

Smith said locating CRST's headquarters downtown won't have a “huge direct impact” on the health of a 48-state truck and logistics company such as CRST.

“But absolutely, in terms of being a community person. I want to see the downtown develop,” he said. “I think it's crazy important for Cedar Rapids' growth ... . So we want to make this thing go if I get the finances right.”

The proposed CRST headquarters building will go up on what had been the riverfront site of the First Street Parkade, which had been slated for demolition before the 2008 flood and since has been demolished. For more than two years, the site has been a surface parking lot, which city council member Vernon called “a holding ground” until someone like CRST comes along to build on the site.

“We're looking to fill in the missing teeth in our core area,” Vernon said.

She said she especially liked that CRST's plans for the building incorporate parking into the structure and provide space for a trail between the office tower and the river.

Olson said work already is underway to arrange parking in downtown ramps for those who now use the surface lot, so they are ready if and when CRST begins construction.

CRST's Smith is one of the seven members on the board of casino investor group Cedar Rapids Development Corp., and he said Saturday that the decision by the Iowa Racing & Gaming Commission last month to deny a state gaming license to the Cedar Rapids casino project across the Cedar River from downtown had no effect on CRST's deliberations about building an office tower downtown.

Last week, the casino investor group's board decided to remain intact and look for the next opportunity to bring a casino to reality at the Cedar Rapids site, Smith said.

“I agree, let's don't go out of business,” he said. “ We decided there is enough of a chance that this could turn around, and if there's an opportunity, we'll get at it.”

l Comments: (319) 398-8312; rick.smith@sourcemedia.net


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