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HomeMy WebLinkAbout~Master - Industrial Property Tax Abatement for reconstruction of Barilla America, Inc., Project RESOLUTION NO. 15-132 RESOLUTION APPROVING INDUSTRIAL TAX ABATEMENT FOR BARILLA AMERICA,INC., FOR RECONSTRUCTION UNDER THE PROJECT FOR THE CITY OF AMES, IOWA WHEREAS,Barilla America,Inc.,(Barilla)is a subsidiary of Barilla,an Italian company that provides food products to a global market, and Barilla's Ames facility,located east of Interstate 35, produces dry pasta; and, WHEREAS,Barilla is initiating an expansion project that will include construction of storage and production facilities to add a gluten-free pasta products line to the Ames facility, and total investment expected for the project is over$26 million; and, WHEREAS,assistance from the State of Iowa will include tax credits totaling approximately $850,000, and the company expects to grow employment by 23 additional jobs with the expansion; and, WHEREAS,the local match will be limited to property tax abatement available through the City's existing Industrial Property Tax Abatement program, and 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; and, WHEREAS, the City Council endorsed an application for assistance to the Iowa Economic Development Authority(IEDA)at the January 13,2015,meeting,and the application for assistance was approved and contract awarded by the IEDA; and, WHEREAS,for the project to continue,Council must authorize entering into the contract for award, and 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; and, WHEREAS,qualification for the Industrial Abatement Program will require additional action by Council prior to the City Assessor processing the abatement for Barilla; and, WHEREAS,the proposed project is unique, in that much of the added value for the project will be created within the shell of the existing facility, and the improvement has been described as a"building within a building"to provide isolation of the gluten-free product production; and, WHEREAS, the City's Industrial Abatement Program was established under Iowa Code Section 42713, which generally allows abatement only for"new construction," and under the Iowa Code,"new construction"does not include"reconstruction of an existing building or structure which does not constitute complete replacement of an existing building or structure or refitting of an existing building or structure, unless the reconstruction of an existing building or structure is required due to economic obsolescence and the reconstruction is necessary to implement recognized industry standards for the manufacturing and processing of specific products and the reconstruction is required;" and, WHEREAS, for the Barilla project to qualify for abatement under the reconstruction terms of the Industrial Abatement Program, the City Council must provide prior approval, and this is different from the more typical abatement for new construction where no initial Council action is required; and, WHEREAS, it is clear that this project meets the terms of Iowa Code Section 427B for Industrial Abatement of improvements "necessary to implement recognized industry standards for the manufacturing and processing of specific products," and the improvements will be required to meet industry standards for production of gluten-free pasta. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Ames, Iowa, that the Industrial Property Tax Abatement for reconstruction under the project is hereby approved. ADOPTED THIS 3rd day of March, 2015. C-, ii . �R A. x Diane R. Voss, City Clerk Ann H. Campbell, Mayor Introduced by: Orazem Seconded by: Corrieri Voting aye: Betcher, Corrieri, Gartin, Goodman,Nelson, Orazem Voting nay: None Absent: None Resolution declared adopted and signed by the Mayor this 3'day of March, 2015.