MIDDLE MARKET HIGHLIGHT, MAY 2006

COUNCIL BLUFFS, IOWA
Karen Stone, CCIM

Council Bluffs, Iowa, a city of approximately 60,000, is becoming home to a new coal generation plant.  Des Moines, Iowa-based MidAmerican Energy Company is building a $1.2 billion, 790-megawatt, coal-burning plant that will serve a four-state area. “The plant will take 3 or 4 years to build,” says Mark Norman, vice president of the Pottawattamie County Growth Alliance. “It will employ about 1,400 people during the process with a payroll of more than $300 million.”  Located 4 miles south of Council Bluffs along Interstate 29, the new plant is being built next to an existing energy plant that has been operating since the 1970s.

This is just one of many new developments and expansions that have come to Council Bluffs, a bedroom community to Omaha, Nebraska, during the past several years. According to Don Gross, director of community development for the Community Development Department of Council Bluffs, approximately 40 to 45 percent of Council Bluffs residents work in Omaha, which lies just to the east across the Missouri River.  Manufacturing, gaming, tourism and retail are the strongholds of Council Bluff’s economy, and each of these areas has been in an expansion mode throughout the past several years.

In addition to the new energy plant, the manufacturing sector had another big addition at the beginning of 2006. In January, Omaha Standard, a truck service body manufacturer, completed construction of a $20 million, 192,000-square-foot plant. The new plant is located at South 11th Street and Highway 275 in the southwest quadrant of Council Bluffs.

“We are also running a capital campaign to raise money for a 110 million-gallon ethanol plant that will have a tremendous impact on the region,” Norman says. The $130 million project will be built and operated by Southwest Iowa Renewable Energy on a site 5 miles south of Council Bluffs in Southwest Iowa Industrial Park. The facility will employ 45 to 50 people and will use up to 50 million bushels of corn annually. Groundbreaking for the facility is expected to occur in fall 2006 or spring 2007.

Several existing manufacturers have recently expanded. Federal Express Ground opened a new $10 million, 68,000-square-foot package and handling facility in July 2005. The facility is located in the new, 53-acre South Point Business Park in southwest Council Bluffs at South 19th Street and Highway 275. The Council Bluffs Industrial Foundation, a non-profit organization, developed the park in 2005. In May 2005, Automated Concepts, a robotics integration company, opened a $6 million, 66,000-square-foot facility in Mid American Commerce Park.

The retail sector has also been experiencing a growth spurt. “In the past several years, we have gone from a deficit retail community to a surplus retail community, and we are attracting a strong group of retailers,” Norman says. One of the most noteworthy additions is the new Bass Pro Shops superstore that opened in November 2005 at the intersection of I-29 and Interstate 80 in the southwest part of town adjacent to the $80 million Mid America Center complex, the area’s arena and convention facility that was completed in 2003.  The 130,000-square-foot, $24 million store is expected to draw 2.5 million visitors annually, creating an annual economic impact of more than $75 million.

The gaming business in Council Bluffs is a vital part of the area’s economic base. Just to the east of the Mid America complex, Horseshoe Casinos just completed an $85 million expansion of the Bluffs Run Casino and Greyhound Track. “The three casinos in the area, each of which employs between 1,000 and 1,200 people, are our top employers,” Norman says, “Together, they draw approximately 8 million visitors per year.” 

Several projects have been identified to fuel growth in Council Bluff’s downtown sector.  These projects will primarily be funded by The Downtown Development Fund (DDF), which received its first round of funding from the Iowa West Foundation in January.  The Iowa West Foundation distributes proceeds received from casino operations.  “We received $10 million that we will leverage with an additional $40 million in private funding,” Norman notes.

One of the first projects that will benefit from DDF funding is the $2.6 million renovation of the Daily Nonpareil newspaper building, which will be refurbished and become home to a financial institution. Construction on the project should begin in the summer and the historic 37,000-square-foot building will be reconfigured into 16,000 square feet of leasable space with on-site parking.

Council Bluffs is also preparing its community for future growth.  The East Beltway, a new connector road that will benefit the eastern edge of the city, is under construction and will be completed in sections by 2011. Norman predicts this will open a new corridor for residential and commercial development. Gross believes the next significant commercial growth corridor will be around the 24th Street exit of combined I-80/I-29, the first exit on the Iowa side of the Nebraska/Iowa line.

Also, starting in 2009, the Iowa Department of Transportation will begin a complete reconstruction of the combined I-80/I-29 corridor. “This is the second busiest two-lane interstate section in Iowa, with 82,000 cars passing in each direction every day,” explains Norman. The road project, which is estimated to cost up to $1 billion, will expand this area of highway to ten lanes, and it is anticipated traffic through this improved corridor will double over the next 25 years. Council Bluffs is also becoming easier to access by air.  The airport is undergoing a $22 million renovation that includes the addition of a new 5,100-foot runway designed to serve corporate jets and a $3 million upgrade of the existing terminal.

Gross feels Council Bluffs is doing very well commercially and that this trend will continue in the future. As Omaha has expanded to the west, it has become somewhat underserved and Council Bluffs is benefiting by picking up some service and retail sales dollars.  “We are now pulling shoppers from southwestern Iowa and eastern Nebraska,” Gross explains. “We have also seen some gains in residential growth; we have been averaging approximately 400 new residential units per year since 1995.” 

Gross predicts 2006 will also be a good year for multifamily.  “In summer 2006, we will begin constructing 80 units in the downtown area that will house seniors on a fixed income. The complex will also feature 6,000 square feet of ground floor commercial space,” he says. Lamar, Iowa-based Prime Development will build the project, which should open in the summer of 2007. In addition, construction on a 190-unit apartment complex to be located on 12 acres directly across the river from downtown Omaha is scheduled to begin this spring, with completion scheduled for mid-2008. Located at Interstate 480 and 41st Street, the project will be built by Omaha-based Broadmore Development.

“We are very excited about what is happening in the Council Bluffs area,” says Norman. “Our community is transforming daily.  We are proud of what we have accomplished over the past decade and we are very excited about the future and expecting an increased number of good things and continued growth.”

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