HomeMy WebLinkAboutA004 - Council Action Form dated January 13, 2015 ITEM # 10
DATE: 01-13-15
COUNCIL ACTION FORM
SUBJECT: ENDORSEMENT OF IOWA ECONOMIC DEVELOPMENT AUTHORITY
APPLICATION FOR FINANCIAL ASSISTANCE FOR BARILLA
AMERICA, INC., WITH LOCAL MATCH IN THE FORM OF INDUSTRIAL
PROPERTY TAX ABATEMENT
BACKGROUND:
Barilla America, Inc. is a subsidiary of Barilla, an Italian company that provides food
products for a global market. Barilla's Ames facility produces dry pasta.
Barilla is planning an expansion project, which will include construction of storage and
production facilities to add a gluten free pasta products line to the Ames facility. Total
investment expected for the project is over $26 million. Assistance from the State of
Iowa will include tax credits totaling approximately $850,000. The company expects to
grow employment by 23 additional jobs with the expansion. The local match will be
limited to property tax abatement available through the City's existing Industrial
Property Tax Abatement program. The estimated incremental value eligible for
abatement is $3,336,000, resulting in a five year total abatement of around
$217,900 across all taxing bodies.
The Iowa Economic Development Authority (IEDA) will review the Barilla application for
assistance later this month. For the IEDA to continue consideration of this project, the
City Council must adopt a resolution supporting the submittal of the Barilla application
for IEDA assistance. For Barilla to receive the local match, the company will need to
apply for the City's Industrial Abatement Program and the project must qualify with the
terms of that program.
ALTERNATIVES:
1. Adopt a resolution supporting the submittal of an application from Barilla
America, Inc. requesting economic development assistance from IEDA with local
match to be limited to Industrial Property Tax abatement.
2. Do not adopt a resolution of support for Barilla America, Inc. application.
MANAGER'S RECOMMENDED ACTION:
Barilla has selected Ames as a location to make a significant investment of capital to
expand jobs without the cost of additional City infrastructure. In keeping with the
Council's goal to promote economic development, this project will expand the number of
quality jobs within our city. Therefore, it is the recommendation of the City Manager that
the City Council adopt Alternative #1 as described above.