Iowa's efforts to attract business are paying off, and the results of pro-growth policies implemented in the mid-90s are now tangible.
Combined with its traditionally high quality of life and education, the Hawkeye State is cashing in with new jobs being created by existing companies and others from businesses relocating to the state.
Rewarding companies for new jobs
One measure of success is the New Jobs and Income Program. Since its inception in 1994, almost $2.2 billion in new manufacturing investments have been made, creating over 2,000 jobs in the process.
Companies that create higher paying jobs, with benefits, and make a new plant investment of at least $10 million, are eligible for the program.
| Pioneer Hi-Bred International is adding a 130,000 square foot research and laboratory center and an expansion of its existing Carver Center in Johnston. The combined cost of the two facilities is $32 million, and the expansion will create 115 new jobs. |
Foremost are property tax exemptions at the local government level, along with state tax credits.
Companies are also eligible for a refund on any sales taxes spent on construction of a new building or expansion of an existing structure. Job training funds are also available.
One company benefiting from the jobs initiative is Pioneer Hi-Bred International. Pioneer, a producer of corn, soybean and oil-based seeds, announced earlier this year an addition of a 130,000 square foot research and laboratory center and an expansion of its existing Carver Center in Johnston.
The combined cost of the two facilities is $32 million, and the expansion will create 115 new jobs.
Pioneer uses technology to create special hybrids, which are then marketed for food, feed and industrial uses. The company began in Des Moines in 1926, and
has grown to employ thousands of people in Iowa and other states, as well as 65 countries.
"Our base of operations is here as well as our research center, so it just made sense to expand here," said Tim Martin, director of corporate communications for Pioneer.
Martin said the new facility will improve Pioneer's data-handling capabilities as well as the genetics technology used in developing corn.
"This is a central location," Martin said. "Being in Iowa is a big reason why we've been so successful."
Loan program spurs growth
| "This is a central location. Being in Iowa is a big reason why we've been so successful."
-- Tim Martin, director of corporate communications, Pioneer Hi-Bred International. |
A second program impacting the landscape in Iowa is the Community Economic Betterment Account, which provides loans to cities or counties to use on business expansion projects. The loan is forgivable if the project goes as planned.
Rupp Industries, based in Burnsville, Minn., has purchased an existing building in West Union to produce commercial indirect heating units. The 50,000 square foot facility will employ 160 people. The state approved $480,000 in Betterment Account funds to help the $2.5 million project.
Eric Estergren, president and CEO of Rupp, cited a tight labor market in the Minneapolis-St. Paul area as the main reason his firm expanded to Iowa. Rupp will produce new products at its Iowa plant, while continuing its current lines in Minnesota.
The program is also helping a small computer systems company to expand. NewMonics, which began in 1996, will add 31 new jobs at its Ames facility. The company was founded by then-Iowa State University Professor Kelvin Nilsen. Nilsen, who has a doctorate in computer science, now concentrates full-time on the company.
Enterprising incentives
Iowa's Enterprise Zone program is also getting off the ground. Begun this year, the program is used to attract manufacturers to areas targeted for revitalization.
Zone benefits can include a 10 percent investment tax credit, 13 percent research credit, refund of sales tax on construction, and training funds. To date, 46 Enterprise Zones have been created.
Two major projects, an upgrade to Case Corp.'s plant in Burlington, and improvement to a Farmland Industries plant in Maquoketa, have already been approved.
Midwest living
Not only does Iowa offer a strong package of incentives, but its overall business climate is extremely competitive. This year, the state enacted a 10 percent income tax cut. Its unemployment insurance rate for new employers is the lowest in the country. And, its average workers' compensation costs are the fourth-lowest.
Iowa also ranks high in affordability. The median price for a home in Des Moines, Iowa's capital, is $93,600, compared to the national average of $118,200.
The violent crime rate in Iowa is also 44 percent lower than the national average. Reader's Digest tabbed two eastern Iowa cities, Cedar Rapids and Iowa City, as two of the best 50 places in the nation to raise a family.
These factors helped bring Olympic Steel, based in Bedford Heights, Ohio, to the state. When the company decided to expand its Minneapolis division to better serve the Midwest and South, Olympic chose Bettendorf, Iowa.
The company's new building includes a temper mill, which produces flat sheets of steel. John Deere is one of the larger companies that receives materials from Olympic Steel, which sold 1.2 million tons of steel in 1996.
The 190,000 square foot building will open in mid-September with 80 new employees. That number should rise to 200-250 within a few years, said Iowa plant General Manager Timothy Morrison.
"We have a customer base out here, and being in Iowa allowed us proximity to supply routes," Morrison said, pointing out Bettendorf's location on the Mississippi River, access to two rail lines and the short distances for truck routes to Chicago.
Iowa has two major interstates, Interstate 80 running east-west through major cities Council Bluffs, Des Moines, Iowa City and the Davenport-Bettendorf area, and Interstate 35, which cuts through Des Moines and Ames, and connects to Minneapolis and Kansas City, Mo.
"We also really liked the idea of having an Iowa address," Morrison said. "Not one of our competitors has an Iowa address, and we felt like this would help us with a lot of people in Kansas, Missouri, and those areas. Sometimes when they hear Illinois, they think Chicago, which is good in a lot of cases, but some of them like doing business with someone in Iowa. When people hear of Iowa, they get a good image."
Morrison said the biggest plus to doing business in Iowa is the work force.
"The most pleasant surprise was the quality, attitude and skill of the workers here," he said. "This is also a tremendous place to live. I moved here with my family to Bettendorf, and we love it."
International attraction
| "We also really liked the idea of having an Iowa address. Not one of our competitors has an Iowa address, and we felt like this would help us with a lot of people in Kansas, Missouri, and those areas. When people hear of Iowa, they get a good image."
-- Timothy Morrison, general manager, Olympic Steel, Iowa plant |
International businesses are also discovering Iowa. Schieffer Inc., a German-based maker of high-pressure hydraulic hoses on construction and agricultural equipment, opened a plant in April in Peosta, 10 miles west of Dubuque in northeast Iowa.
Jeff Theis, company president, said the presence of Iowa's foreign trade office in Frankfurt, Germany, helped in the process.
"This was the company's first entry into the U.S.," Theis said. "Being in Iowa, that gives us a central location to our customers, who are scattered across the country."
Schieffer received help with a $50,000 grant from the state.
"That (incentive) was really icing on the cake," he said. "We had basically already made our decision."
Theis said low corporate tax rates and the quality of life in the area were key factors.
"We were able to attract good people," he said. "We've had no problems filling any openings with good workers."
Building momentum
Iowa hopes to capitalize on the momentum it has created toward the end of the 20th century.
Factory exports are now at a record level of $4.1 billion, compared to agricultural exports of $4 billion.
Agriculture will always be the staple of Iowa's economic diet, but a variety of other industries are increasingly finding the state attractive.
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