States Compete For New Fertilizer Plant

States Compete For New Fertilizer Plant

Iowa and Illinois are vying to get a proposed new nitrogen fertilizer manufacturing plant, to be built by an Egyptian company.

A company headquartered in Egypt that has accepted on of the richest incentive packages ever offered by Iowa state government is still looking for a place to build a proposed $1.3 billion nitrogen fertilizer manufacturing plant. Meanwhile, the state of Illinois is trying to persuade the company, Orascom Construction Industries, to build the nitrogen fertilizer manufacturing facility on the Illinois side of the river, across the border from Iowa.

Despite aggressive overtures being made by state of Illinois to try to land a big new fertilizer manufacturing facility, Iowa officials remain confident it will be built in Iowa.

"Illinois has been very aggressive," says Debi Durham, state economic development chief for Iowa. She points to the Illinois Senate's proposal earlier this summer to provide a state tax credit for the project. The company is considering locations in Illinois and at least two locations in Iowa, says Durham.

"Illinois officials are making major concessions to that state's corporate income tax laws that are designed for this project," says Durham. "There have been promises made to Orascom by Illinois officials." However, Illinois hasn't officially offered any incentives to the Egyptian company yet, says Sandra Jones, spokesperson for the Illinois economic development agency. "But we are very interested in discussing potential economic opportunities in Illinois with Orascom."

State officials still believe the company is committed to build the plant in Iowa

Durham believes Orascom is still committed to Iowa. She says Iowa Gov. Terry Branstad has been talking with the CEO of Orascom about the location to build the plant. The state of Iowa has been in constant communication with the company, says Durham. The project would create 165 jobs, most of which would pay at least $43,000 annually. Iowa's Economic Development Board agreed in February to provide nearly $37 million in incentives to the Iowa Fertilizer Company, an Orascom subsidiary, to build its plant on 300 acres in Lee County which is in Iowa's southeast corner.

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Iowa's offer includes nearly $32 million in tax credits, a $1.6 million loan and forgivable loan, and $2.3 million for worker training. Illinois' incentives could be around $150 million, some officials estimate, under the proposed legislation that would cap Orascom's tax liability.

"Illinois is being very fierce on this project. They are throwing a lot of money at Orascom," says Steve Bisenius, executive director of Lee County Economic Development Corporation. Orascom is still considering the Lee County site, with ongoing discussions about how to improve flood protection, he says.

Two sites being considered in Iowa by the firm wanting to build the plant

Scott County in Iowa is also wanting Orascom to build there. County supervisors plan to hold a public hearing and a meeting next month on rezoning 320 acres near Walcott for the facility. Neighbors persuaded the county's zoning commission to vote against the proposal. The neighbors are worried about heavy traffic, possible water and noise pollution and building an industrial plant on prime farmland.

Durham says she's confident the nitrogen fertilizer manufacturing plant will eventually be built in Iowa. "But we're not taking anything for granted," she says.

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