Iowa

MidAmerican Energy to Invest $1.9B for Iowa Wind Generation

Des Moines, Iowa-based MidAmerican Energy Company announced that it plans to invest $1.9 billion to install up to 656 new wind turbines in Iowa by 2015 with the intention of adding an additional 1,050 megawatts of wind generation capacity.

$1.9 billion MidAmerican Energy wind generation project - largest in Iowa history

$1.9 billion MidAmerican Energy wind generation project (photo -iowa.gov)

This is the biggest investment project in Iowa’s history, and will create 48 permanent jobs and another 460 construction jobs.

The project will generate $360 million in new property tax revenues over 30 years, in addition to annual payments generated for landowners worth $3.2 million.

The exact locations where the turbines will be sited has not been decided, but it will be in areas which already have wind farms.

The expansion increases MidAmerican’s wind power capacity, as a percentage of its total capacity, to 39 percent. The company said the cost of the project will not be transferred to customers in the form of higher rates.

On the contrary, they claim it will help stabilize rates and promised a rate reduction worth $3.3 million in 2015 when the project’s power become available, and ramp that up to a total rate reduction worth $10 million by 2017.

MidAmerican did not receive any tax credits or economic development incentives from Iowa.

It’s notable that this announcement comes so soon after Facebook’s decision to select Altoona, IA as the location for a billion-dollar data center. MidAmerican will be supplying energy to the Facebook data center. The availability of wind energy in Iowa was one of the deciding factors that helped Facebook choose Iowa over a competing site in Kearney, Nebraska.

MidAmerican Energy Company is a subsidiary of MidAmerican Energy Holdings Company, which in turn is controlled by Omaha, Nebraska-based Berkshire Hathaway.

Greg Abel, chairman, president and CEO of MidAmerican Energy Holdings Company, thanked Iowa Governor Terry Branstad and other state officials for creating an environment that allowed them to make this significant investment in Iowa.

He also thanked the state’s congressional delegation for their support of the extension of federal wind energy production tax credit, which Abel said created the opportunity for this investment and maintained the environment that makes such investments in wind energy possible.

Bill Fehrman, president and CEO, MidAmerican Energy Company, said that in addition to cementing Iowa’s position as a leader in wind generation capacity and the rate reductions for customers, the project would also help reduce the company’s own carbon footprint by 10.3 percent.

MidAmerican Energy already has 1,267 wind turbines in Iowa, which represents a total of 2,285 megawatts of wind power generating capacity and $4 billion in investments prior to this latest expansion.

Facebook Announces $300M Data Center in Altoona, Iowa

Facebook has officially announced that it has chosen Altoona, Iowa as the site for its third data center in the United States and fourth in the world, following existing data centers in Prineville, Oregon and Forest City, North Carolina, in addition to another one in Luleå, Sweden.

Rendering of Facebook data center in Altoona, IA

Rendering of Facebook data center in Altoona, IA (photo – Facebook)

Facebook will invest a minimum of $299.5 million for the project, which is expected to create 31 jobs at average hourly wages of $23.12.

This investment will be for the first phase of the project, and will be used to build a 476,000-square-foot energy efficient data center with an outdoor cooling system.

Facebook has applied for and got approval from the City of Altoona for a total of three such phases.

The total investment for all phases combined at this time is estimated to be a billion dollars, with the possibility of the project being further expanded to 1.4 million square feet for a total investment by Facebook of $1.5 billion.

Facebook is planning for a green design for the building that will enable it to apply for LEED Gold certification.

Altoona Mayor Skip Conkling said he wanted to thank all parties involved for helping the city secure the project.

The Iowa Economic Development Authority (IEDA) held a meeting today during which it approved $18 million in incentives for Facebook under the state’s High Quality Jobs program. This includes $8 million in sales tax refunds for equipment and construction material purchase, and another $10 million in tax credits.

The City of Altoona has additionally agreed to a 20-year property tax abatement.

Jay Parikh, vice president of infrastructure engineering for Facebook, said that they were excited about having found a new home in Iowa with its plentiful wind energy and a great talent pool that would help them build and operate the data center.

Facebook will break ground on the site this summer, and will have the facility operational by next year.

Iowa Gov. Terry Branstad was also on hand for the announcement in Altoona, and said that Facebook’s selection of Altoona for its data center would further cement Iowa’s status as a destination for tech companies.

Coincidentally (or not…), the same IEDA board meeting also approved a request by Google for more tax credits for another $400 million expansion of its Council Bluffs, Iowa data center.

This will be on top of the initial $600 million investment and the $300 million expansion announced last year by Google, for which the state had approved $9.6 million in tax incentives. Google had applied to have it increased to $16.8 million to facilitate this latest $400 million expansion.

Altoona, IA Inches Ahead in Bid for $1.5B Facebook Data Center

It was revealed during the weekend that the mysterious company scouting sites in Iowa and Nebraska for a $1.5 billion data center is actually Facebook.

Facebook data center in Oregon

Facebook data center in Oregon (photo – facebook.com)

Until now, this massive project with three $500 million phases had only been known as Project Catapult in Altoona, Iowa and Project Edge in Kearney, Nebraska.

The company has been considering its options and negotiating with local and state authorities in both states since early last year.

Facebook already has similarly large multi-facility data centers in North Carolina and Oregon, and is looking to add one in the middle of the country.

In plans filed with Altoona, the owner of the 200-acre Catapult Data Center site is listed as Hubbell Properties II, LC. The initial plan included three buildings, each between 350,000 to 380,000 square feet in size. The first phase was to involve construction of one 382,252 square feet building.

This plan was approved by the Altoona City Council in June 2012, extended in Dec 2012 and then re-approved in Feb 2013. Then the company filed an amended plan which further expands all three buildings to 466,500 square feet each. This amended plan was approved by Altoona in March 2013.

This week, both the Altoona City Council and the Iowa Economic Development Authority Board will be holding meetings to consider incentives for this project. Facebook has also apparently requested wind energy tax credits from Iowa, which will require new legislation.

Details about the incentives and jobs likely to be created by the data center, assuming Altoona lands the project, should be made clear after the meetings this week.

Meanwhile, back in Nebraska, Kearney has already spent close to $2 million to purchase and prepare a 165-acre site for the Project Edge data center. They are calling it the Tech oNE Crossing technology park.

Nebraska legislators have approved and passed legislation authorizing incentives for the project, including tax refunds for sales tax for construction material and equipment purchase, property tax exemptions, and other tax incentives. Lawmakers also directed Nebraska Public Power District to offer Project Edge low-cost power.

However, based on the flurry of activity by state and local officials in Iowa coupled with the company’s recent interest in getting approval for modified plans in Altoona, it looks like Iowa seems to be getting ready to snatch Facebook away from Nebraska.

Iowa Hi-Tech Demonstration Fund Impact Study

Iowa Governor Terry E. Branstad released a study on the economic and fiscal impact of the state’s Demonstration Fund.

Iowa Innovation Corporation

Iowa Innovation Corporation (photo – iowainnovationcorporation.com)

This fund provides technical and financial assistance for small and medium scale companies in the IT, advanced manufacturing and biosciences industries to turn prototypes and conceptual stage ideas into commercial products.

The report, authored by Econosult Solutions Inc., was commissioned by the Iowa Economic Development Authority (IEDA) in partnership with the Iowa Innovation Corporation and Iowa Innovation Council.

Econosult collected data to determine how large the funded companies were now, and compared this data with historical data from the pre-investment stage. All companies funded in between 2007-12 were included in the study.

The Demonstration Fund handed out $13 million through 127 investments in between 2007-12. Since 13 firms received two awards from the fund, four others rejected it and nine have shut down, the total firms left to study were 101.

Out of the 101 companies still in operation, 79 responded to an Iowa Innovation Corporation survey. These 79 received a combined $8.7 million from the Demo Fund.

Highlights of the ROI (24 percent) for Iowa, as per the study:-

- The number of jobs has grown from a combined pre-investment headcount of 596 to 1,262 at present.

- Annual revenues have grown from a combined $86.60 million to a current total of $167.10 million.

- $2.1 million in combined tax revenues were generated in 2012 alone by the 79 survey respondents.

- Economic Impact on the state of $153 million, which created another 1,074 jobs and $49 million in earnings.

Chris Nelson, a board member of the Iowa Innovation Corporation and president and CEO of Kemin Industries, said that they quickly learned the real value of the fund to applicants was the mentoring they received, with the dollars as a close second.

Governor Branstad said it important for the state to have the tools required to support high-growth innovation-based companies succeed, and the Demo Fund was one of these tools. He added that the report quantifiably proves that the state is getting a return on its investment.

Read the full Iowa Demonstration Fund impact study – Download (pdf)

IL, IA Competing for $1.2B Cronus Fertilizer Project

The siting process for a $1.2 billion fertilizer plant has once again zeroed in on Illinois and Iowa, engaged in high-stakes bidding over who can offer higher incentives.

Tuscola, IL

Tuscola, IL (photo – tuscola.org)

Officials for the company, identified under the code name of Project Cronus, spoke at a hearing in the Illinois legislature about the benefits of a large scale urea manufacturing plant – a $500 million investment, 150 permanent jobs, and more than 2,000 construction jobs.

The site they are looking at in Illinois is in Tuscola, near Champaign. Adam Brown, state representative for Champaign, has already introduced legislation that would provide Illinois “a level playing field” in their bid to secure Project Cronus.

H.B. 2496, an amendment to the Illinois Enterprise Zone Act, would approve the company for $12 million in property tax abatements, along with a whole list of other state tax credits and exemptions including for utilities, investments, personal property and sales tax.

Brown said the legislation was necessary because under current Illinois law, the company does not qualify for many of these incentives which require a project to create at least 500 jobs that are permanent.

Iowa officials have not said anything, but officials in Illinois pushing to secure incentives for the project claim that Iowa has already offered Cronus a $35 million incentives package. The Iowa site in contention is reportedly in Mitchell County.

If Iowa got this project, it would be their third billion dollar fertilizer plant in the last one year. The first one was the $1.4 billion Orascom plant, for which Iowa and Illinois were competing until Iowa boosted their incentives package from $25 million to $100 million and secured the project.

Egypt-based Orascom had been engaged in negotiations with Illinois officials for a site near Peoria, IL. At that time, Illinois was said to be considering approving special legislation to offer a better incentives package for Orascom, but they left it too late and the company ultimately ended up selecting a site in Lee County, IA.

The second major fertilizer project win for Iowa was the recently announced $1.7 billion expansion of the CF Industries fertilizer plant in Port Neal, IA.

Back in Illinois, the Tuscola Economic Development, Inc. (TEDI) has spent the last year working on Project Cronus, and Illinois legislators seem to be serious this time about providing economic development officials the tools they need to compete against Iowa in case the bidding heats up.

Deloitte Report – Benchmark Comparison of Iowa Incentives

In an effort to understand Iowa’s competitiveness in the field of economic development, the Iowa Chamber Alliance (ICA) engaged Deloitte Consulting to benchmark Iowa’s incentives programs against those of select other states.

Iowa Chamber Alliance

Iowa Chamber Alliance (photo -iowachamberalliance.com)

The study examined Iowa’s economic development programs and funding compared to five other states – Minnesota, Nebraska, South Dakota, South Carolina and Texas.

The first three are neighboring states while the last two were included as a benchmark for highly competitive states for economic development.

This results of the study have now been unveiled by ICA, and it shows that Iowa’s economic development incentives rank high on usability, coming in second behind Texas.

“This study confirms Iowa’s approach to economic development incentives is on the right track, but it also demonstrates that Iowa does not resource its economic development incentives at a competitive level,” said John Stineman, ICA executive director.

The report suggest that Iowa lags significantly behind its neighbors as well as other leading economic development states in the financial value side of economic development – the ability to impact projects through financial incentives aka a deal-closing fund.

“Where Iowa may fall short, however, is on its discretionary grant program (a ‘deal-closing’ fund), and the state is handicapped by the $120M annual tax credit allocation (cap) that applies to its major incentive programs including Enterprise Zone, High Quality Jobs Program, as well as R&D and Brownfield credits.”

Other key findings of the study include:-

-  Iowa performs at peer level in property tax exemptions, sales and use tax exemptions, and research and development tax credit programs.

- Iowa has a competitive advantage in its workforce development incentive programs.

- Other states have caught up to and begun to pass Iowa in data center and technology incentive programs – an area where Iowa was considered a leader previously.

“Iowa has a solid base of state-level economic development incentives tools upon which to build,” said Darin Buelow, a principal with Deloitte Consulting LLP. “However, to become more competitive, Iowa may wish to increase the funding level and flexibility of some of the State’s key incentive programs.”

Recommendations offered by Deloitte in the report:-

- Consider increasing the cap on Iowa’s economic development tax credits

- Evaluate options to offer a “Deal Closing Fund” or more discretion to the Iowa Economic Development Authority in awarding direct financial assistance

- Consider allowing the sale, refund or transfer of economic development tax credits

- Consider expanding the Brownfield/Grayfield Redevelopment Tax Credit program

- Consider augmenting Iowa’s data center incentives.

Read the full Benchmark Comparison of Iowa Incentives report – Download (pdf)

Texas Wins 2012 Site Selection Governor’s Cup

Site Selection magazine’s March 2013 issue includes its annual Governor’s Cup rankings, topped this time by Texas.

In this list, states are ranked based on the number of capital investment projects they attract. In order to qualify, projects must satisfy one or more of the following criteria – a $1 million investment, creation of 50 or more new jobs or a new facility of at least 20,000 sq ft.

Last year, Ohio won the 2011 Governor’s Cup, followed by Texas and Pennsylvania. This year, Texas walked away with the trophy by a wide margin. Ohio was a distant second, followed by Pennsylvania maintaining its third place ranking.

Listed below are the top 10 states in Site Selection magazine’s 2012 Governor’s Cup rankings.

Site Selection Governor’s Cup

Site Selection Governor’s Cup (photo – siteselection.com)

1. Texas – 761 project

2. Ohio – 491 projects

3. Pennsylvania – 430

4. Michigan – 337

5. Illinois – 322

6. Georgia – 296

7. North Carolina – 280

8. Tennessee – 231

9. Virginia – 199

10. Kentucky – 196

“This is a confirmation of the men and women of the Texas legislature understanding that if we will continue with the predictability and stability of tax and regulation and legal policy that allows entrepreneurs to keep more of what they earn, then we will become the job creation magnet in America,” TX Gov. Rick Perry said to Site Selection.

The magazine specifically credits five sectors in Texas for powering the Lone Star State to the top of the rankings – energy, chemicals, machinery manufacturing, professional services, and data centers.

Site Selection will also be announcing its list of top metros for new and expanded corporate facilities. The small metros (population less than 200,000) category was topped by metro Sioux City in Iowa, which bagged 23 projects. Battle Creek, MI and Jackson, MI were tied for second place with 13 projects each.

The Dayton metro area in Ohio topped the list of metros in the 200,000-1 million population category.

DuPont Breaks Ground on $200M Ethanol Plant in Nevada, Iowa

James C. Collins, president, DuPont Industrial Biosciences, was joined by Iowa Governor Terry Branstad to celebrate the official groundbreaking for the company’s $200 million cellulosic ethanol facility in Nevada, Iowa.

Ethanol from corn stover

Ethanol from corn stover (photo – usda.gov)

In addition to the estimated 60 full-time plant operations jobs, there will be over 150 individuals involved in the collection, stacking, transportation and storage of the stover feedstock seasonally during each harvest.

“After many hard years of work by Iowa growers and technology companies like DuPont, Iowa now leads the country in renewable fuel production,” said Gov. Branstad. “This site in Nevada is the next critical step in our cellulosic ethanol journey. We look forward to bringing these advanced technologies online, creating local jobs and helping to deliver clean, sustainable energy.”

Once operational by mid-2014, this plant is expected to produce 30 million gallons of renewable fuel. It will be among the first and largest commercial-scale cellulosic biorefineries in the world.

The cellulosic biofuel will be produced from corn stover residues, a non-food feedstock that consists of corn stalks and leaves. To supply the corn stover for its plant, DuPont will contract with more than 500 local farmers to gather, store and deliver over 375,000 dry tons of stover per year into the Nevada facility.

“By leveraging DuPont Pioneer corn production expertise and designing an integrated technology platform, we’ve built an affordable and sustainable entry point into this new industry. We’re committed to continued productivity gains to drive costs down even further for the coming generations of plants, ones based on corn stover as well as other feedstocks,” said Collins.

“And we didn’t get to this point alone. We’ve built an incredible partnership with the state of Iowa, Iowa State University, entrepreneurial growers and a whole host of partners around the country who share our vision of making renewable fuels a commercial reality,” added Collins.

One of those partners could be Lincolnway Energy, next-door neighbor to the new DuPont plant in Nevada, Iowa.

“We are excited to explore the various synergies between Lincolnway and DuPont that bring value to both companies. One area is the possibility of using DuPont’s cellulosic ethanol co-product to replace our coal usage,” said Lincolnway Energy chairman Jeff Taylor. “We strive to continually improve our operations and environmental impact. Replacing our fossil fuels with this renewable cellulosic ethanol co-product to generate heat and power makes great sense. It is generated right next door, would reduce our coal usage and the transportation costs of shipping coal cars almost a thousand miles.”

Wilmington, Delaware-based DuPont (NYSE:DD) has more than 70,000 employees worldwide, and last year generated $38.7 billion in revenues for a net income of $3.51 billion.

Electrolux to Relocate R&D From Webster City, IA to Charlotte, NC

Swedish appliance maker Electrolux announced it will be relocating its North American laundry products research and development center from Webster City, Iowa to Charlotte, North Carolina.

Electrolux headquarters in Charlotte, NC

Electrolux headquarters in Charlotte, NC (Photo – electrolux.com)

This R&D Division’s 80 high-paying jobs will consequently move to the company’s North American headquarters in Charlotte.

This is the other shoe dropping for Webster City, which lost 800 jobs when Electrolux shut down its washer and dryer plant there last year. Ironically, the 80 new jobs in Charlotte bring the company’s employment there to 800.

Chris Harris, vice president of Laundry and Dish Care Products, Electrolux Major Appliances North America, explained that, “We are increasing our R&D investment, moving closer to major science, engineering and technology universities and leveraging on the state-of-the-art research facilities that we already have in Charlotte.”

“This was a difficult but necessary decision,” Harris added. “The company is committed to assisting our Webster City employees and we are making this announcement nearly a year in advance to help with the transition.”

Product design and testing will be discontinued in Webster City in the third quarter of 2013. Electrolux had opened the Webster City R&D unit last year with a $5 million investment to renovate the former Beam plant. The city had gone out of its way to land the project. They purchased the building for $1 and leased it cheaply to Electrolux.

The city also provided Electrolux with a $150,000 grant. The company said it would refund $50,000. Webster City Mayor Janet Adams expressed disappointment and surprise.

As far as Charlotte and North Carolina are concerned, the 80 new jobs and the associated investment are simply part of the deal agreed to by Electrolux in 2009. The company was provided $27 million in incentives to facilitate the relocation of their North American headquarters from Georgia to Charlotte, with a commitment of bringing 738 jobs to the city,which Electrolux has now fulfilled.

Electrolux sells more than 40 million products to customers in more than 150 markets every year. Last year, Electrolux had sales of SEK 102 billion and 58,000 employees.

Google to Invest $200M in Council Bluffs, Iowa Data Center

Google is going big in Iowa, with the second major investment announced this week in the form of another $200 million investment in their Council Bluffs, IA data center. A couple of days ago, the search giant announced a $75 million investment in a wind farm in Greene County, IA.

Google data center in Council Bluffs, Iowa

Google data center in Council Bluffs, Iowa (Photo – google.com)

With these two new investments and the $900 million worth of existing data center investments in Council Bluffs, Google’s total investment in Iowa now stands at $1.1 billion.

This $1.1 billion includes the $300 million already invested into the Council Bluffs data center whose size will be almost doubled with the new $200 million investment. Another $600 million has been invested by Google into a second data center in Council Bluffs, IA.

No state incentives were offered to Google, although Iowa Gov. Terry Branstad was present at the Google news conference, along with Google data center manager Chris Russell and Iowa Economic Authority Development (IEAD) director Debi Durham.

“Google’s decision to continue its investment in Iowa is a tribute to the company, and to Iowa,” said Gov. Branstad. “We have worked hard to make Iowa an attractive and safe place to do business, and this is another example of that work bringing great results.”

Google’s past investment in Council Bluffs has created 130 high-tech, high-paying direct jobs. Russell said new jobs would be created in the tech and construction sectors, although he did not specify the number of jobs that would be created. He did say that they had looked at other locations for the $200 million data center investment before selecting Council Bluffs, IA.

“The number of people put back to work to rebuild $600 million is unbelievable, from those pushing dirt to laying concrete, electricians, plumbers, all those jobs that had been lost for a number of years,” said Council Bluffs Mayor Tom Hanafan.

The $75 million Google invested into the wind farm in Iowa is hardly a random foray into green energy. The timing of the two near simultaneous announcements says that Google is looking to offset the carbon footprint of their massive data centers. The Rippey Wind Farm will produce enough renewable energy to light up 15,000 Iowa homes.

Apart from the $1.1 billion investment and the resultant jobs created by Google in Council Bluffs and Iowa, Google has also awarded more than $608,000 to local schools and nonprofits. Last year, they partnered with the City of Council Bluffs to launch a free Wi-Fi network for people in Council Bluffs.

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