MIDDLE MARKET HIGHLIGHT, MAY 2008

Council Bluffs, Iowa
Kevin Jeselnik

Council Bluffs is a city of approximately 60,000 located in southwestern Iowa just across the Missouri River from Omaha, Nebraska. The city, which is the county seat for Pottawattamie County, has steadily grown its commercial sector over the past 2 decades, as it evolved from a community driven primarily by the agricultural industry into a diverse, modern economy.

“We’ve experienced an economic renaissance over the last 15 years,” says Mark Norman, vice president of economic development for the Pottawattamie County Growth Alliance. “The city council decided that it needed to make the business environment conducive to new investment, and the effort has paid off.”

The first major catalysts that pushed Council Bluffs to new heights were introduced in the early 1990s. The arrival of the gaming industry brought increased income and job growth; the city currently has three casinos, which together employ approximately 1,000 people and have been significant economic drivers.

“In the early 1990s, Council Bluffs started to become a retail surplus community, a regional retail draw for southwest and western Iowa,” Norman says. “Currently, we are reporting activity at about 140 percent of expected sales based on population.”

The efforts of the city council, the Chamber of Commerce and the Growth Alliance have established the area as a formidable retail destination, a feat all the more impressive when you consider its location just east of Omaha.

“We don’t feel we are competing with Omaha, instead we are complementing and building upon what occurs there,” Norman explains. “People from southwest Iowa, who once may have driven through Council Bluffs to shop in Omaha, now stop here to shop. Also, eastern Omaha is probably underserved on the retail side. As Omaha continues to grow west, all of the retail development follows; many of our shoppers are from eastern Omaha.”

The community is focused on building upon its retail strength, and there are many fundamentals that reveal Council Bluffs as conducive to further growth. In the past 5 years alone, the area has had more than 2,000 housing units built, primarily in the single-family home market.

Two expansive retail developments are coming online in Council Bluffs this year, and are expected to increase the city’s status as a regional shopping node. The Marketplace – Council Bluffs opened this spring along South 24th Street and Interstate 80. Developed by Omaha-based Magnum Development, the shopping center is anchored by a 104,000-square-foot JC Penney, and features 222,000 square feet of in-line retail, 26,000 square feet of specialty retail space, and seven outparcels for sit-down and fast food restaurants. Near Interstate 29 and US Highway 275, Kimco Realty Corporation is developing Metro Crossing, a 430,000-square-foot power center anchored by Target, Kohl’s and Hobby Lobby. Additional tenants include PetSmart, Bed, Bath & Beyond, and Famous Footwear.

While each of the new shopping centers are expected to positively impact the city, no activity is drawing as much attention as the Google data center that is currently underway. In June of last year, Google announced that it would be building a large data center at South 11th Street and Highway 275 that represents a $600 million capital investment in the community. The project is expected to be complete in 2009, and will eventually employ approximately 200 people with a payroll of approximately $10 million, according to Norman.

All of the development occurring on the perimeter of the city has not drawn focus away from the downtown area, where the Growth Alliance is in the midst of a multi-million dollar revitalization. Recently, Bayliss Park, the town square located in the heart of downtown, was refurbished. The organization also has capitalized a $4 million revitalization fund, which to date has leveraged at least an additional $8 million in capital investment.

Artspace USA is developing the $11.5 million Harvester Artist Lofts, a 36-unit live/work community in a redeveloped building located on Main Street in Council Bluffs, Iowa.

Council Bluffs Savings Bank is moving into an existing building that recently went through a $2.1 million redevelopment, and Prime Development of Le Mars, Iowa, is in the midst of developing a $12.5 million, three-story senior housing community on South Main Street. The 71,646-square-foot International Harvester building, which is located at 1000 South Main Street downtown, is being converted to 36 live/work lofts for artists. Artspace, a leading Minneapolis-based non-profit developer for the arts, is redeveloping the five-story property into the $11.5 million Harvester Artist Lofts. Construction is expected to begin this September, with completion and occupancy expected by October 2009.

The city is also receiving welcome help from the Department of Transportation, through a $1.2 billion, 10-year endeavor to reconstruct Council Bluff’s interstate system. The project is already underway, with a new 10-lane bridge being built over the Missouri River on I-80. The widened roadways should help ease the city’s burden of accommodating the increased traffic that is sure to result from the expansive development efforts underway across the market.

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