Story published by Corridor Business Journal 1/7/19
Cargill is asking Cedar Rapids and state officials to support incentives for a $36.7 million project to update the company’s corn milling plant at 1710 16th St. SE.
The project includes $31.5 million for equipment replacement in the factory’s preparation plant and degumming facility, as well as construction of a 27,000-square-foot building expansion, according to background provided to city council members, who will consider a resolution of support for incentives tomorrow.
The council will consider city sponsorship of an application by Cargill to the Iowa Economic Development Authority for state tax credits under the High Quality Jobs Program for plant facility modernization. Receiving assistance under the program also requires the city to provide a local match for the state grant.
Under Cedar Rapids’ Local Match Economic Development Program, the city plans to provide a 10-year, declining-scale exemption of the increased property valuation generated by the plant improvements, averaging 44 percent over the 10 years. Since most of the investment will be in equipment that is not taxed as real estate, the assessed value is expected to increase by only $2.1 million. The project would generate $2.1 million in taxes over the 10 years, of which $367,700 would be rebated to Cargill and $1.8 million would go to the city.
The corn milling plant has been in operation for more than a half-century, and produces an assortment of products. The city has also been in discussions with Cargill about the sale of city-owned land south of Steward Road and Otis Avenue SE so that the company can build a $6.5 million rail car storage and switching yard, a proposal facing some opposition from owners of adjacent property.