Lots to think about for a project we're not supposed to think about

So, the absolute worst-kept secret in Lee County, is that a foreign metals company is looking at putting a very large steel production facility in Green Bay Bottoms south of Koch’s Iowa Fertilizer Company.
Someone said the facility could make the fertilizer plant look like a lemonade stand. Well, that would be something, wouldn’t it? Price tag rumors are $15 billion and other rumors were published in the Des Moines Register this week about the possibility of a special legislative session to consider state tax incentives for the project.
An email was sent to Iowa House Democrats from House Minority Leader Brian Meyer’s Chief of Staff Kevin McCarthy that just alerted Democrats to the possibility of a special session. No specifics were mentioned about when the session may be called nor what incentives were being considered.
Pen City Current reached out to Meyer’s office for a copy of the email and were told the email was sent, but was an informal email and wasn’t intended for public discussion. Well, okay? But it’s out and the Register cited the source and the content, yet the communication wouldn’t be released.
“But, isn’t that a public document, since it went to all elected Democrats in the House, at the same time?” we asked.
“Well, that’s a good question,” is the answer we got from the staffer, but still refused to release the email.
So, we went down different avenues to try to get a copy of the email, and the only formal communication came from Rachella Thomas Poynter, the Communications Director and Deputy Director of the Iowa House Democrats' staff.
“An internal email informed members about a potential special session, but was not considered public,” she said.
We reached out to Adam Zabner, who would be the closest Democrat to Lee County in the House, but those efforts went unreturned.
Ok, so there is talk about a special session, that no one really wants to talk about, but the talk about it is just that there might be a special session called. Not sure why all the secrecy is needed in that communication, but we’ll set that aside.
There are some things to consider here that the public should be thinking about. One of those is how new property tax laws could impact any economic upturn in Lee County as a result of securing the development.
If this project, or really any project is probably a better way to frame the conversation, is allowed to be part of a TIF program or a PILOT program, it could dramatically reduce the economic benefit to the county. Here’s why, according to our information:
The new property tax laws that cap property tax growth at 102% of the previous year’s property tax base, allow for new construction as extra property tax base. So, if a new, say, $10 billion facility was built in the county, that would bring substantial property tax growth and would very likely result in a reduced levy, at least from the county.
Here’s where the new law could render all that a moot point outside the 2%. If any development is considered as part of a TIF program which defers property taxes out for a predetermined number of years, say 20, those taxes are returned to the developer to offset costs of infrastructure development in most cases. But when the TIF program ends, and the development falls back onto the county tax rolls in full, it may not, under current law, be considered “new” construction and therefore, at that point, the county would still be handcuffed with the 102% allowance over the previous year.
If the state and county work out a PILOT, Payment in Lieu of Taxes, program similar to what was worked out with Orascom when the Iowa Fertilizer Plant was built, which is still in play for four or five more years, the development may, as with the TIF program, not be considered as new construction. The county would again be relegated to just a 102% allowable growth from the previous year.
Those facilities will use county roads, and county volunteer fire services, and county law enforcement. But their property tax bill would be suppressed by property tax caps.
There are other factors involved in the murky and complicated world of assessments that would also figure into the math, but it’s safe to say that county officials are concerned about that possibility.
County Supervisor Chair Ginger Knisley has said she’s concerned about the new law and the urban renewal tax abatements the county typically approves on new construction in the county. The abatements have historically been an incentive for improvements in the county and are regularly-used development tools around the state.
Any approved abatements, under the new law, can’t be considered new construction when the abatement ends. So, in a nutshell, any new construction in the county that is either a TIF, PILOT, or abatement project, may not factor in as new development in the county as long as the current tax law is in place.
Other factors include land acquisitions that are always part of these things, and the impact on legacy farmers. It’s fair to say that some farm families may not be interested in the monetary gains, but more in holding onto their family’s legacy. That has to be part of the conversation.
The security factor of a large scale fertilizer plant and a large scale metals manufacturer being 30 minutes from a federal munitions provider should also be considered.
Any facility of this magnitude will very likely need natural gas supply that isn’t currently available, and that infrastructure is likely something that will require state and federal intervention and funding.
With media needing to guess and connect dots around the project is just the way it goes, but as long as really bright people are negotiating on behalf of the families, the county, and the state, this could be a seachange event for the county.
People should be keeping an eye on how this unfolds, if and when it does, just as much as they are about an agraponic bit coin mining center on the side of a hill – But that’s Beside the Point.
Chuck Vandenberg is editor and co-owner of Pen City Current and can be reached at Charles.V@PenCityCurrent.com.