MIDDLE MARKET HIGHLIGHT, MAY 2006

DAVENPORT, IOWA
Karen Stone, CCIM

Davenport sits on the southeastern edge of Iowa, along a unique part of the Mississippi River that runs east/west instead of its usual north/south course. With a population of 98,000, Davenport is the largest of the cities in the Quad Cities MSA, which also includes Bettendorf, Iowa, and Rock Island and Moline, Illinois, and has a combined population of 320,000.

According to Tom Hart, CEO of the Quad City Development Corporation, the economy of the area has shifted significantly during the past several decades, incorporating its strong heavy manufacturing roots into a more diversified, service-oriented economy.  During that time period, two major geographic corridors have seen significant growth: the central business district located along the riverfront and the Interstate 74 corridor. In addition to manufacturing companies, businesses involved in logistics and warehousing, financial services, and food production and machinery have become much stronger contributors to the economic growth of the area.

Clayton Lloyd, director of the Department of Community and Economic Development for the city of Davenport, notes some other major contributors to the economy.  “The United States Department of Defense employs approximately 8,000 people at the Rock Island Arsenal, which is located on Arsenal Island in the middle of the Mississippi River.  Other significant employers include Deere & Company, Alcoa and Nestle-Purina. In addition, Davenport is also the retail center for the surrounding areas.”

Hart describes the current economy as “healthier, more sound and more resilient” than it was in the past. According to Renay Robison-Scheer, senior vice president of Economic Development for DavenportOne, and Amy Behning, vice president of the DavenportOne’s Downtown Partnership, Davenport is definitely on the other side of the recovery curve.  “We have seen more activity in the past 6 months than we have seen since 2001,” Robison-Scheer notes. 

“Our economy has been quite hot for the past 12 months,” Hart says. “During 2005, we worked on 17 significant projects.”  The largest new development to be announced is a hog processing plant that will be built in east Moline, Illinois.  Plans for the proposed $150 million high-tech facility, which would be located off of Interstate 5/Interstate 88 in the northeast quadrant of the market, are currently going through the approval process.

In April, MMS Thermal, an advance manufacturing company, began construction of a $6 million, 17,000-square-foot manufacturing facility in Eastern Iowa Industrial Center, a 320-acre industrial park located along Interstate 80 on the north side of Davenport. Cedar Rapids, Iowa-based Storey Construction is building the facility, which should open by late fall. East Iowa Industrial Center is a shovel-ready park designed to house large distribution centers; parcels generally range from 20 to 30 acres.

Significant retail growth is occurring in the area around 53rd and Elmore streets, which lies along I-74 near its intersection with Highway 61. Russell Construction, a local construction company, is currently building the Duck Creek Shopping Center that will feature 20 stores when it is completed. Russell was also involved in the construction of several new medical facilities, including the $72 million, 200,000-square-foot Trinity at Terrace Park Hospital, which opened in this corridor in early 2004. 

“DavenportOne is very focused on making sure our entire community is viable for development,” Behning says. “To accomplish this, we have placed a strong focus on revitalization and development in our downtown district.” Davenport’s downtown is uniquely connected to the river.  “Because we rely on a flood-control system rather than a flood-wall system, the river actually ‘meets’ the city,” Behning adds. In 2000, DavenportOne, the city and private investors embarked on a comprehensive $113.5 million River Renaissance project to capitalize on this beautiful, accessible amenity. 

The project contains several components, including the renovation of the historic Redstone Building that was built in 1892 and today sits at the center of downtown. It is now home to The River Music Experience, a center celebrating the history of music along the Mississippi, a coffeehouse and the Centro Restaurant. Estes Company, which is headquartered in Davenport, was the contractor.

A second major component, the Skybridge project, connects the heart of downtown with the riverfront. The five-story suspension bridge features light shows and music and was designed by Chicago-based Hollaband & Root. A third component, the $30 million Figge Art Museum, opened in August 2005. The 115,000-square-foot, monolithic glass structure was designed by London-based architect David Chipperfield and is located just west of the Redstone Building. Russell Construction was the contractor.

Some new residential developments have also begun to pop up in downtown, as it has emerged as an arts and cultural district.  The Alexander Companies of Madison, Wisconsin, is converting historic, abandoned warehouses to The Davenport Lofts. “[There are] 72 units currently completed and additional phases are in the works,” Behning says. “The River Renaissance is truly a success story that will continue to create momentum for our downtown and our city.” 

According to Lloyd, “Davenport has a strong package of amenities that make it a great place to live and to do business, including a strong work force, an education system that is ranked one or two in the nation, and a reasonable cost of living.”

According to Robison-Scheer, the amount of development and the strong growth trend Davenport is experiencing is occurring because, during the last 5 years, the Davenport Commission has really stepped up to the plate to make development happen. “20 years ago, we were an economy in distress,” Hart adds. “Today, Davenport is a vibrant community with a growing economy that has risen over hard times through diversification and a strong commitment to rebuilding its communities.”

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