Iowa – Rolling Up Its Sleeves And Getting To Work

01 May, 2016

Update by Tina Hoffman, Marketing and Communication Director of Iowa Economic Development

Q-What is the current “state of the state”?

With the eighth-lowest cost of doing business and a focused economic development strategy in-place, the state of Iowa is committed to building a strong, diverse economy and raising the standard of living for all Iowans.

A-Collaboration is a real, tangible strength in Iowa that surprises many people who find out what it means to work with the public and private sectors, which are invested and passionate about moving business and workforce initiatives forward.

Since 2011, the state’s business development programs have assisted projects that are expected to create 46,051 direct, indirect and induced jobs and result in a total capital investment of $12.4 billion. Every corner of the state has benefitted from new locations and business expansions from top-tier companies.

Additionally, in 2014, Iowa reached a new export record of more than $15.1 billion in manufactured and value-added goods. The state’s exports have increased 39 percent since 2011.

Q- What are specific goals Iowa is trying to accomplish in the short term and long term?

A-With invaluable insight from our 2014 Battelle Study, our key areas of success were identified, as well as areas to improve upon, including:

• Build on the competitiveness and growth of Iowa’s industry clusters through innovation, retention and attraction.
  • After streamlining our incentive programs, we’ve set our sights on leading the next frontier of biosciences by putting in place a first in the nation Bio-based Chemicals Tax Credit program. This is a $250 billion industry and growing.
• Generate and attract skilled workforce in demand by Iowa’s businesses.
  • With one of the most comprehensive benefits packages, the Home Base Iowa program has attracted nearly 1,700 highly skilled U.S. veterans to companies throughout the state. Plus, nearly 7,500 jobs have been pledged to U.S. veterans by prominent employers throughout Iowa.
  • Several collaborative programs are in-place and aggressively working strategies to attract or retain skilled employees, including Future Ready Iowa, ElevateIowa and Greatness STEMS from Iowans—a K-12 program that has become the model for other states due to its effectiveness in improving math/science test scores.
• Advance Iowa’s physical infrastructure and regional development capacities to realize Iowa’s economic potential.
  • A vital component of growing your exports and working with emerging international markets is transportation infrastructure. In 2015, the Iowa Legislature unanimously approved the first gas tax increase in 25 years to invest $3.2 billion over five years to improve the state’s highways, bridges and connections to U.S. interstates (I-29 / I-80 / I-35). These key improvements will elevate the state’s ability to attract major exporters who benefit from a reliable statewide rail system, several regional airports and the Mississippi River along our state’s eastern border. We also invested in the first-ever statewide Freight Optimization Study to further assist Iowa businesses with international trade by identifying ways to cut freight costs.

Q- What are the biggest challenges you see for Iowa in terms of economic development and growth?

A-Much like the rest of the country, our need for a more skilled workforce is a key challenge that we’re hyper-focused on overcoming. Gov. Branstad just set forth an aggressive goal to have 70% of the state’s workforce have training/education beyond high school by 2015. Georgetown University Center on Education and the Workforce (Georgetown Center) projects that from 2010 to 2025, Iowa will add 612,000 jobs to its economy, including replacement jobs due to retirement.

Through various complementary programs like Future Ready Iowa, Home Base Iowa and STEM, Iowa is rolling up its sleeves and getting to work.

Q- What are the most recent success stories in terms of economic development? What are industries that have chosen to relocate and/or expand, and what made them select Iowa?

A-Germany-based Boehringer Ingelheim Vetmedica (BIVI) announced a $110 million capital investment to expand its livestock pharmaceuticals production and biological research facilities in both Fort Dodge and Ames, Iowa. The new BIVI facility in Ames, which is set to open spring 2016, will be a large component of the recently announced expansion of the ISU Research Park.

In Council Bluffs, tech-giant Google is adding 35 high-paying jobs and making a $1 billion capital investment to expand its data center, bringing the company’s total Iowa investment to $2.5 billion. Much of this is due to Iowa’s commitment to renewable wind energy, where we are No.1 in the nation in terms of total electricity generated—31 percent in 2015.

In Ankeny, genetic analysis manufacturer Advanced Analytical Technologies is hiring nearly 60 highly-trained workers.

Insurance broker Cottingham & Butler will reinvest in Dubuque with facility upgrades and expand its employee base by nearly 100.

General Electric Co. (GE) is expected to create 128 new jobs and make a $7.4 million capital investment in its West Burlington facility. The board awarded GE $930,000 in direct financial assistance through HQJ.

TrueNorth Companies, L.C., currently located in Cedar Rapids, is an insurance and financial strategies company founded in 2001. The company would like to resolve its current space restrictions and accommodate its human capital needs by remodeling unfinished space. The board awarded tax benefits for the $2.5 million capital investment project that is expected to create 57 jobs at a qualifying hourly wage of $23.62.

Q-Is the state providing significant incentives for businesses to locate there?

A-We’ve struck the right balance of working to create new, high-quality jobs that will raise the personal incomes of Iowans, who have tremendous skills and work ethic, and job retention packages to maintain the research and development jobs that need to be held within the state.

The High Quality Jobs program is Iowa’s signature incentives program. It provides qualifying businesses tax credits and direct financial assistance to off-set some of the costs incurred to locate, expand or modernize an Iowa facility. To qualify for this very flexible assistance package that includes loans, forgivable loans, tax credits, exemptions and/or refunds, eligible businesses must meet certain wage threshold requirements.

Q- Where are the areas of greatest growth within the state in terms of industries and location?

A-The $31.2 billion Advanced Manufacturing industry is the state’s largest single business sector, bringing in three times more revenue than farming. Iowa ranks eighth in the nation in percentage of GDP from manufacturing (19%), and manufacturing represents 13.6 percent of Iowa employment with more than 4,000 manufacturers employing more than 215,000 Iowans.

The Insurance/Finance industry is also significant for Iowa. There are 43,000 insurance industry professionals currently employed in the state, which is a net increase of 4,200 new jobs over the past 15 years (Iowa Workforce Development, 2014). With 200-plus insurance companies statewide, Iowa is committed to supporting policies that create favorable conditions for the insurance industry to thrive. One such policy is Iowa’s low insurance premium tax rates—at one percent, it is one of the lowest in the nation.

Finally, the Biosciences industry in Iowa is a growth area for the state. With roughly 525 bioscience entities and nearly seven percent of the industry’s total (for agricultural feedstock and chemical manufacturing) U.S. workforce, Iowa is a biosciences epicenter. Work continues in the legislature to pass a renewable chemical production tax credit that could position Iowa to capitalize on the next frontier of bioprocessing in the United States.

Q- What are your greatest assets at this time?

A-

• Diverse, growing industry clusters—many just consider us an ag state, but our Advanced Manufacturing industry is our No. 1 industry. When commodities markets are down, like they are now, Iowa will weather the slight downturn and come out on top.
• Global leaders that see the value of their Iowa locations and continue to invest in the state and hire more Iowans.
  • Headquartered in Des Moines for more than 130 years, the Principal Financial Group is a global company offering insurance, asset management, mutual funds, and retirement planning and investment services. Principal employs 14,500 people worldwide with 7,000 in Iowa. And in 2013, Principal made a $400 million commitment to renovate its Des Moines campus.
  • Facebook has invested nearly $1 billion to construct three state-of-the-art data centers (all powered by renewable wind energy) in Altoona, Iowa. Today, 150 people are employed between the two completed data center buildings. On average, more than 450 construction personnel per day are working to complete Building 3, which should be move-in ready by the end of 2016.
  • Iowa’s workforce is second to none—education, efficiency and work ethic—help Iowa employers compete globally.
• Iowa is the third best-managed state in the country, with a perfect credit rating and a balanced budget. (Source: 24/7 Wall St.)

Q-Are there special initiatives or innovative programs that are making a difference within the state in terms of economic development?

A-A newer program that is helping to solve shortage of available housing in some Iowa communities is the Workforce Housing Tax Credit Program (WHTC), established by House File 2448, on February 1, 2015.

There had been an identified need for affordable housing to accommodate the workers that Iowa employers are hiring. This program makes state tax incentives available to developers building or rehabilitating housing in Iowa. To be eligible for the program, projects must meet one of four criteria:

• Housing development located on a grayfield or brownfield site
• Repair or rehabilitate dilapidated housing stock
• Upper story housing development
• New construction in a greenfield (community with demonstrated workforce housing needs)

Annually, $20 million is allocated for the program.

Q-What are the lifestyle benefits of locating to Iowa?

A-Iowa is changing the misperception held by many outside the Midwest that it’s “just a fly-over state.” For example:

• Data from Realtor.com shows that in the first half of 2015, roughly 60 percent of borrowers who used a mortgage to buy a home in Des Moines (the capital city) were between the ages of 25 and 34—aka millennials.
• Cedar Rapids is experiencing a significant revitalization following the devastating Great Flood of June 2008. In 2009, the Czech Village/New Bohemia (CV/NB) Main Street District was formed to breathe new economic life into a historic area of the city.
• Iowa ranks second as Best States for Young People (MoneyRates.com, 2014).
• Iowa is named the best state for children’s health and the fourth-best state overall to raise a child (Annie E. Casey Foundation, 2015).
• Iowans enjoy the eighth-lowest housing costs (US Census Bureau, 2014).

Side Note

Marion

Over the past several years, Marion, Iowa, has worked to make several strategic investments. Five years ago, if a large industry was looking to construct a facility on more than five acres of ground, that project would not happen in Marion. Today, Marion Economic Development Corporation has partnered with the city of Marion to construct the 184-acre Marion Enterprise Center. This is a shovel-ready, certified park site that has realized more than $30 million of new investment in just the past two years. We have 127 additional acres of ground to accommodate large industrial users.

Additionally, we recognized a unique community asset that exists in Marion—a world-class data center with redundant looped fiber connectivity that extends throughout our community. All of the office and industrial sites in the Marion Enterprise Center have redundant fiber installed to each site. The majority of our fiber network is publicly owned, positioning us to potentially leverage this as a unique economic development tool in recruiting high-data users. We are in the process of working with our local telecom companies to develop a competitive business development environment for these high-data users.

You can learn more about the company with the data center in our community at involta.com.

You can learn more about the Marion Enterprise Center at marionenterprisecenter.org.

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