Iowa Fertilizer Company (IFC) will build a $1.4-billion nitrogen fertilizer production plant on 500-acres of land near Wever in northern Lee County.
The site offers rail, river and highway access and is located near a natural gas line, which is essential to the plant's operation.
The project will create 165 full-time, permanent jobs and several thousand temporary construction jobs.
During a news conference in Des Moines on Wednesday, Governor Terry Branstad says this will be a much-needed shot in the arm for Iowa, and Lee County in particular.
"It does give hope to those who have been waiting a long time in the Lee County area for great job opportunities," says Branstad. "I am again very proud that the Iowa Fertilizer Company has chosen Iowa and Lee County."
Nassef Sawiris is the CEO of Orascom Construction Industries (Egypt), which is the parent company for IFC.
"After considering multiple sites, Iowa was a natural fit for our fertilizer plant," says Sawiris. "As the top corn-producing state in the country, Iowa is home to many of the farmers who will use Iowa Fertilizer Company's products."
Landing these jobs, though, was not cheap for Lee County and the state of Iowa.
Lee County will waive the property taxes on the new construction and improvements to the 500-acre site for 20-years after the property's first assessment.
The Iowa Economic Development Authority Board has approved about $60-million in tax credits, with another $50-million available over the next two years if there is no commercial property tax reform in the state.
The price for the 165 permanent jobs has led a number of groups, including Americans for Tax Reform and We Are Lee County, to publicly criticize the project.
Iowa Economic Development Authority Director Debi Durham says she does not buy into that type of thinking.
"The reality is, when you look at the economic impact of a project this large," says Durham, "a $1.4-billion project, you look at the construction jobs that are going to come alongside and services this (facility). You look at the direct jobs that will co-locate next to this plant, small businesses that will be there permanently."
Durham says the state of Iowa had to increase its original pledge of roughly $25-million because of pressure from Illinois.
That state made a bid for the plant, which CEO Nassef Sawiris says was actually larger than Iowa's offer. He says Iowa won out, though, because his company has more faith in its business climate.
“The state of Illinois’ promises that exist today are not sustainable in our view given the balance sheet of the state of Illinois," says Sawiris. "So whatever tax regime exists today, we have to take with a grain of salt. In addition to that, the unfunded pension liabilities for Illinois were a great concern for us.”
Sawiris hopes to break ground on the new plant in the very near future. He says Orascom Construction Industries has already acquired an Iowa-based construction company as part of that process.
The development agreement between Lee County and Iowa Fertilizer Company says the plant will be finished within 3 years and all of the equipment and machinery will be in place before 2020.
The company will pay for infrastructure improvements and will reimburse the county for the lost property tax revenue over the next 20 years. A portion of that money will be provided to the Fort Madison School District.