In the alternate reality, Riverside Shipyard was the Starfleet Shipyard 2-1A construction facility located in Riverside, Iowa, Earth. The USS Enterprise was constructed there in the 2250s. The shipyard was also an embarkation point from where cadets for Starfleet Academy would travel to their training facilities. (Star Trek)
According to co-writer Roberto Orci, the shipyards were constructed in Iowa in honor of George Kirk's sacrifice on the USS Kelvin: "Shortly after the heroic death of George Kirk, the Iowa shipyards were erected by Starfleet to honor and commemorate the sacrifice. Hence, the Kelvin salt shaker in the diner, etc...." 
The novelization of the film suggests that the decision was more a matter of location, as central Iowa was close to the Mississippi River and a still-industrial Midwest, but sufficiently isolated that a catastrophic accident would endanger few people outside of the shipyard itself – though such a vague setting as "central Iowa" does not contradict the suggestion that Riverside was specifically chosen in George Kirk's honor.