BAE Systems is looking to build a $139 million classified defense aerospace facility that would locate 650 jobs in Cedar Rapids, a project that city officials expect to be a boon for economic development here and throughout the state.

The proposal, which the Cedar Rapids City Council will consider Tuesday, would be complete by September 2022. Construction on the 200,000-square-foot facility on 76th Avenue SW and Sixth Street SW would start by October.

City Manager Jeff Pomeranz said a team effort by city staff helped secure the deal to proceed with one of the largest projects in city history. As a global company, BAE Systems considered many cities across the country to build a new facility, he said. He anticipates other companies will be attracted to the area because of the world-class companies here.

“We’re just thrilled that they selected us from a very competitive process and that they are going to build a very large facility that soon will have a great impact on our community in a very positive way as we continue to grow as an aerospace hub,” Pomeranz said.

Doug Neumann, executive director of the Cedar Rapids Metro Economic Alliance, said the plan is especially important considering the economic challenges of the coronavirus pandemic.

“The COVID pandemic has dealt the regional economy a gut punch, and economic development wins like this start to change the story,” Neumann said in a text message. “Bringing a global company like BAE Systems to town and retaining talented former Collins Aerospace employees is welcome and celebrated news.”

BAE Systems, based in the United Kingdom, agreed to purchase Collins Aerospace’s military Global Positioning System business in January for $1.925 billion after U.S. Department of Justice regulators asked Collins Aerospace, Cedar Rapids’ largest employer, to divest the unit as part of the merger between Raytheon Co. and Collins’ owner, United Technologies Corp.

The military GPS business produces defense electronic and communication products with anti-spoofing and anti-jamming technologies. More than 1.5 million devices are being used on weapons systems.

Collins Aerospace has about 10,000 employees in Iowa. About 675 are in its military GPS operations, which BAE Systems will acquire.

Those employees have remained working in Collins Aerospace’s facilities since the January purchase agreement.

Pomeranz said the state considers these jobs to be new, but a majority of these employees already work for the company and live in and around Cedar Rapids.

“Certainly losing something like this from the Corridor would have been very, very unfortunate for an overall employment level for not just our community, but for the state, so we’re excited about the 650 jobs,” he said.

Under the deal, the city would incentivize the $139 million project with infrastructure improvements around the facility and a 75 percent property tax exemption for 20 years. The property tax exemption, which applies to any added value to the property, is subject to approval by Iowa Economic Development Authority. IEDA will consider the measure July 17.

A spokesman from BAE Systems did not comment on the company’s plans for a new Cedar Rapids facility.

“BAE Systems looks forward to finalizing its acquisition of Collins Aerospace’s Military Global Positioning business, but cannot comment on specific details related to the acquisition process at this time,” spokesman Mark Daly said.

BAE Systems has 85,800 employees worldwide, according to its website, including 34,100 in the United Kingdom and 30,500 in the United States.

Ryan Companies US will be the developer for the project. The land is currently undeveloped.

This article was originally published by The Gazette on July 11, 2020.