CEDAR RAPIDS — One of the city’s largest employers wants to pump $40 million into its southwest Cedar Rapids campus as it consolidates employees to one location.
Transamerica and its parent company, Netherlands-based AEGON, plan to make two buildings in the 6000 block of C Street SW the home base for 2,600 employees in the city.
To do so, the insurance and investment company will renovate about 480,000 square feet of space, which includes Transamerica’s existing C Street offices and currently vacant space once occupied by Hibu. The company also plans to build a two-story, 51,000-square-foot addition that will connect the two buildings.
Cedar Rapids City Council Tuesday gave preliminary approval on providing Transamerica with financial assistance for the project. That assistance would be a 10-year tax exemption of the increased value of the property, starting at an 80 percent exemption and ending at 20 percent.
The tax exemption would be valued at $4.7 million over the 10-year period, but Transamerica is expected to pay $23.5 million during that time, according to council documents.
Cedar Rapids has the largest concentration of Transamerica employees in the United States, Transamerica President and CEO Mark Mullin said in a statement.
“Transamerica and AEGON have had a long history in the Cedar Rapids area, and today’s announcement further demonstrates our commitment to the city. The renovation and re-engineering of our Cedar Rapids campus will reflect how we plan to be working 10 years from now, and will increase our ability to be agile and foster greater collaboration,” Mullin said.
The renovation is expected to take about two years. Once complete, Transamerica employees will work out of the building at 6400 C St. SW while AEGON Asset Management and AEGON Global Technology employees work out of 6300 C St. SW.
City officials said they view the renovation as good news for the city and potential growth engine for southwest Cedar Rapids.
“We anticipate that there would be some ripple effects of this investment in the area through other commercial or residential investments in the area with this much of an economic driver in that area of the city,” Economic Development Analyst Caleb Mason said at the council meeting.
Transamerica has telegraphed the changes for its Cedar Rapids offices for months as they have indicated they want to move out of their offices at 4333 Edgewood Rd. NE properties.
More recently, Transamerica shifted more than 860 employees to a different company, Tata Consultancy Services, as it outsourced administration of its insurance and annuities business. Employees who have moved to Tata Consultancy will continue to work at the Edgewood Road NE building.
Tata Consultancy also has said it plans to make Cedar Rapids its “North American insurance hub” and has a long-term lease for Transamerica’s Edgewood Road NE building.
The about 860 former Transamerica employees officially will transition to Tata Consultancy on Monday, a Transamerica spokeswoman said Tuesday.
In other business, City Council also approved a development agreement for a 36-unit apartment complex at 5650 Muirfield Dr. SW, known as Sonoma Square. The $7.2 million project will have 32 affordable units and four market-rate units and is expected to start construction June 1 and be complete by the end of August 2019.
The city of Cedar Rapids will provide about $863,000 in financial assistance, including reimbursement of 100 percent of increased taxes on the property for 18 years. The apartment project is a joint venture between High Development Corp. and Hatch Development Group.
In other action the City Council:
l Approved rezoning 3.6 acres of property at 555 French Court SW to make way for a new 7,120-square-foot truck wash by A First Class Solution Truck Wash LLC.
l Approved downtown street closures for the 2018 session of the Cedar Rapids Downtown Farmers’ Market, to be held May 26, June 2, June 16, July 7, July 21, Aug. 4, Aug. 18 and Sept. 1.
l Comments: (319) 398-8366; matthew.patane@thegazette.com