City bidding for Hormel expansion

Dubuque is among locations around the world vying for a planned $31 million expansion. City leaders are striving to put together a compelling incentives package.

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Maurice Jones

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Posted: Friday, November 1, 2013 12:00 am

A company's planned $31 million expansion that potentially could go to a Dubuque food processing plant could bring nearly 100 new jobs.

Officials from Hormel Foods Inc. confirmed Thursday that expansion discussions are under way with city leaders and economic development officials. If an agreement is reached, the addition would create two new production lines and 91 jobs at Hormel's Dubuque Progressive Processing site.

On Monday, the City Council will consider an application requesting financial assistance from the Iowa Economic Development Authority to help lure the project to the city. As a "local match" for the state's contribution, Dubuque would offer a $1.3 million tax-increment financing incentive that would begin in fiscal year 2022.

The city is being proactive and forceful in its recruitment efforts, according to Dubuque Economic Development Director Maurice Jones.

"We want to show that we are very aggressive about trying to get business to expand here," he said. "We also want to show our interest and say, 'Hey, this is something we can offer.' This is roughly 90 jobs. That's significant for the community."

The requested contribution from the state would allow Hormel to utilize several economic development programs. Rick Dickinson, president and CEO of the Greater Dubuque Development Corp., said, that if the application is approved, the city will request investment tax credits and sales tax exemptions for new equipment, among other incentives, on behalf of the company.

Though ultimately contingent on several variables, including the number of jobs created and actual expansion cost, the total incentive package, TIF included, could be worth about $4.2 million.

"I think we're in a very good place and I think the city has made the right choice in the level of incentive provided, and we hope the state will do the same," Dickinson said.

Dubuque is up against global competition to secure the project, Jones said. However, he expressed confidence that, pending completion of the incentives package, the city will be well-positioned.

"They're looking internationally," Jones said. "They could be anywhere. Why not here?"

The expansion would increase Hormel's investment in the city to more than $120 million, according to City Manager Mike Van Milligen. The new positions would increase the plant's work force to around 300.

Exact wage ranges and job duties haven't been disclosed. But Van Milligen said they will not be considered "low-wage" jobs, and should make the project eligible for state aid.

Van Milligen said discussions with Hormel have been advancing relatively quickly, and the company appears motivated to proceed.

"Even though they're a huge company, they're pretty nimble," he said.

Dickinson said Hormel's status in the industrial world makes this project coveted internationally.

"Everyone would like to have them," he said. "They're a great corporate citizen. They're an international brand. They're a state-of-the-art food processing facility."

Council member Lynn Sutton was unfamiliar with the planned expansion when contacted by the TH Thursday. But she praised Hormel's success in Dubuque over the past four years, and its ability to provide quality employment options.

"It's always a good thing when a company has to expand and create more jobs," Sutton said. "It's always a win-win situation ... Good jobs are still needed. There's still people not finding adequate work, so this is another avenue."

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