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Despite challenges, Cedar Rapids has seen post-flood business growth

June 10,2018 11:39

(Liz Martin/The Gazette) Steve Novak rebuilds an alternator at his shop, Novak Automotive on Second Avenue SW in Cedar Rapids, earlier this month. Novak's shop is the last business left along two blocks of the avenue after his neighbors took flood buyouts.and more »

CEDAR RAPIDS — A decade after the 2008 flood, Steve Novak’s auto repair shop is the last business along two blocks of Second Avenue SW between the Cedar River and Third Street SW.
The city now owns every lot but Novak’s on those two blocks after his former neighbors — including a church and an appliance business — took post-flood buyouts.
The city since has held on to the land in hopes of landing a casino.
“After the flood, a lot of them got bought out, and then the only reason I’m here is because the casino didn’t go through,” said Novak, the owner of Novak Automotive, 220 Second Ave. SW.
In that regard, Novak’s block mirrors the changes Cedar Rapids’ business community saw in the aftermath of 2008.
Some businesses took buyouts and moved elsewhere. Others, such as Novak, have stuck it out in areas affected by the flood — from large companies such as Quaker Oats and Alliant Energy to small businesses, including Downtown Tailoring.
“I just told my wife, the Monday morning when we got (back) in the building, ‘We’re going to go for it, we’re going to clean her up and we’re going to put it back together,’” Novak said.
Meanwhile, the city’s attempts to land a casino were similar to City Hall’s larger push to foster private sector investment across town. The casino attempt failed, but city staff soon will start a redevelopment process for the site.
Except for flood protection, Cedar Rapids Metro Economic Alliance Executive Director Doug Neumann said flood recovery is rarely a discussion point with businesses today.
“Development projects now are going to succeed or not go forward for reasons unrelated to the flood,” he said.
Cedar Rapids’ economy is better than it was before the flood. The area’s unemployment rate is lower while its total nonfarm jobs count, total population and annual gross domestic product are higher.
A large percentage of flood-affected businesses also survived the ordeal. A Cedar Rapids Chamber of Commerce report in early 2012 estimated only about 18 percent of the 940 businesses affected by overland floodwaters had failed, far below federal estimates.
“You’ve got a lot of success stories from those flooded businesses that now are employing more than they ever have,” said Bimm Ridder Sportswear President Gary Ficken, who was president of the Cedar Rapids Small Business Recovery group after the flood.
The report did estimate 2,500 jobs had been lost, including from large employers that pulled completely out of Cedar Rapids, such as Norwood Souvenir, Swiss Valley Farms and Silliker Laboratories.
Some neighborhoods also have yet to recover their depth of businesses. Kingston Village, Czech Village and Time Check all have fewer commercial properties than before the flood, city assessor data shows.
New businesses are cropping up in those areas, however, such as a new coffee shop — Dash Coffee Roasters — and brewery — Thew Brewing Co. — in Kingston. Plus, some companies have moved to or built offices even closer to the river, such as TrueNorth Cos. and CRST International
Geonetric did so in 2014 when it moved to a new building in the NewBo District, even though the website design company had been safe in 2008 along Glass Road NE.
Geonetric co-owner Ben Dillon said the company wanted to plug into the energy in NewBo that became more invigorated after the flood.
“There are people who have been pushing this direction for decades. I think it really took shape when they was a clean slate where things were able to happen. It’s never the way you want those things to happen, but ultimately this city has made a lot of lemonades from lemons in the last couple years,” Dillon said.
Geonetric’s three-story building now houses the company’s 85 employees, other business tenants, a co-working space and NewBoCo, the entrepreneur and start-up development not-for-profit started by Dillon’s business partner, Eric Engelmann.
The flood and the destruction it caused also created a sense that Cedar Rapids no longer could treat its economic development efforts in the same way.
“The damage was so significant in June 2008 that you couldn’t, you weren’t ever going to go back and do things like they were. It wasn’t just a restart, it had to be a complete reset,” Neumann said.
The city’s growth in financial incentive awards is an example.
From 1997 through 2008, the city awarded less than $40 million in incentives to just 28 projects in Cedar Rapids, according to a database provided by city staff.
From 2009 through May 2018, it awarded more than $129 million in incentives — a 226 percent jump — to 105 projects. Most of those incentives were given through tax increment financing or property tax exemption programs.
Ficken said he doubted Cedar Rapids would have seen the growth it has without the push required by flood recovery. He also credited infusion of government funding post-flood and the resiliency of Cedar Rapidians for the city’s comeback.
“From a personal standpoint, if I was downtown with my wife pre-flood at night, it was a ghost town. Now downtown is a happening place at night,” Bimm Ridder Sportswear’s Ficken said.
“Being a lifelong Cedar Rapidian, it just makes me proud, knowing what happened and just seeing how far we’ve got.”
l Comments: (319) 398-8366; matthew.patane@thegazette.com

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