Background:
The Sterilite Corporation, headquartered in Townsend, MA, is the largest plastics housewares company in North America and has been in operation for over 75 years. They manufacture a wide variety of goods including food storage, laundry and utility products and organizational totes. Sterilite currently has operations in six states.
Sterilite is considering the construction of a manufacturing facility and distribution center on 160 acres adjacent to the Eastern Iowa Industrial Center. The building is estimated to have 2,463,000 square feet; 384,000 square feet will be manufacturing space and the remainder distribution space. The building shall be assessed at a minimum of $55 million. The project will create 500 full time positions with 100 of the positions paying at least $18.75/hour and the remainder of the positions paying $12.00 to $16.00 per hour. All positions are supported with a benefit package.
To support this development, the proposed City assistance is the following:
· Forgivable loan of $3,000,000 paid out following the certificate of occupancy on the manufacturing facility
· Infrastructure (electric, gas, sanitary sewer and water) brought to the facility (estimated cost of $1,262,500)
· Rail spur onto project site (estimated cost of $1,800,000)
· Road and intersection improvements adjacent to and leading to site (estimated cost of $3,350,000)
· Partial rebate of property taxes paid by Sterilite for a 15 year period (estimated to be $8,361,600)
· For 15 years all property taxes paid for the assessed value portion greater than $64,000,000, net those taxes restricted by Iowa TIF law, will be reimbursed to the company.
The City is also pursuing funding assistance from the State of Iowa’s Revitalize Iowa’s Sound Economy (RISE) program to assist with roadway improvements and the Iowa Department of Transportation’s Railroad Revolving Loan and Grant Program to assist with the rail spur. These programs are anticipated to help offset a portion of the City’s cost.
As required by Iowa Code, a public hearing is required prior to the approval of an economic development agreement where the City will incur debt. In this case, the debt is the City’s obligation for a rebate of property taxes of approximately $8,361,600 over 15 years and approximately $9,500,000 for a land write down and infrastructure and road improvements leading to the site. The rebate and other costs would come through the use of tax increment financing applied to the assessed value of the improved property. The details of this financial assistance will be established and certified in an economic development agreement between the Company and the City.
Public hearing to be held at the January 18th, 2017 Committee of the Whole meeting.