Iowa Economic Development Authority (IEDA) Director Debi Durham declared, "Iowa is open for Business" at the November groundbreaking for Orascom Construction Industries' Iowa Fertilizer Company plant in Wever, Iowa. But the project has come under criticism from some who say the state is offering far to much in tax incentives and financial assistance.
Tax credits for the project add up to $57.5 million and direct assistance will total $1.6 million initially. But the potential for increases in 2014 and '15 may credit an additional $25 million each year if the company demonstrates a need. The IEDA says the incentives were necessary to woo Orascom away from Illinois, where a construction site had been considered.
The potential benefits will include 1,900 construction jobs while the complex is built and 165 permanent jobs once it is operational. In addition, the Lee County Board of Supervisors have approved a $9.9 million Revitalize Iowa's Sound Economy (RISE) grant for improvements to the roads around the site. In this way, between RISE grants and direct payouts from Orascom, Lee County will not have to pay for these pricey and necessary road improvements.
The IEDA is convinced that the generous tax incentives and financial assistance to Iowa Fertilizer Co. will return an estimated $333 million in increased personal income, $8.8 million in local tax revenue and a projected total of $153 million in state revenue over the next ten years. Property values are expected to increase in the surrounding area and the IEDA believes the benefits from this deal will ripple across Iowa's economy.
"On the front end, Iowa Fertilizer Co. will inject $1.4 billion of capital investment into our state and create at least 165 permanent jobs and thousands of construction-related jobs. Now we know that the benefits of that project will serve Iowans for years to come," said Durham.
Since breaking ground, survey crews have uncovered archaeological artifacts including bits of pottery and spear points at the site. Construction has been put on hold until the state Archaeologist's office can examine the findings. A full scale archaeological excavation may need to take place, and Orascom would foot the bill.
The Lee County Board of Supervisors is set to hold a public hearing on the county's proposed budget at 9:01am Tuesday, March 12 at the Lee County Sheriff's Office meeting room. The public is invited to take part in the conversation.
The State of Iowa remains enthusiastic for the project and recognizes the possible benefits of a nitrogen fertilizer plant deep inside corn country, where it is needed most. The Iowa Fertilizer Co. may be privy to what critics call 'excessive incentives', but if the numbers work, Lee County and the State of Iowa stand to come out on the long end. Iowa Fertilizer Co. promises increased revenue for the State and Lee County, job growth in an area that has struggled economically and improved access to vital nitrogen fertilizers for growers in the region.
Photo Credit: D. Michaelsen