March 15, 2013
Iowa

Four years and $12 million later, city-owned industrial park sits vacant

Written by Josh O’Leary | Iowa City Press-Citizen | March 15, 2013 | www.press-citizen.com

An East Coast company’s announcement in April 2011 that it would build an $85 million foundry in Iowa City specializing in wind turbine parts was met with statewide fanfare.

Gov. Terry Branstad was the first to deliver the news in an address at the Iowa Wind Energy Association’s annual conference in Des Moines. Economic development leaders and city officials hailed it as a major step for Iowa City’s new multimillion dollar industrial park. And the promise of 175 good-paying jobs when the foundry opened in 2013 appeared to be a boon to the local economy.

But the foundry never materialized, and today the 173 acres along 420th Street on the southeast edge of Iowa City remain undeveloped farmland, despite the city pumping $12 million into the industrial park’s infrastructure. Newly laid streets, water lines and sewers extend into the area, and yet-to-be used rail extensions branch from the Iowa State Railroad through the empty fields.

The industrial park, once branded as a Wind Energy Supply Chain Campus, has been certified as “shovel ready.” But as yet, there have been no shovels, and the factories the city envisions attracting have yet to arrive.

That Maryland-based company – North American Ductile Iron Company, or Nadicom – pulled the plug on plans for its foundry before it had broken ground amid a rocky year for the wind energy sector in 2012. The company’s CEO is hopeful he can one day bring a factory with a revamped business model to Iowa City, but it is far from certain.

“The best way to describe it is put on hold,” Nadicom CEO Prasad Karunakaran said this week. “Our initial plans were very much focused on the wind energy sector. And if you follow the wind energy sector, it took a beating in 2012, which basically caused us problems to raise enough capital to get it off the ground.”

City leaders and the Iowa City Area Development Group, which has partnered with the city to market the industrial park, are steadfast in their optimism about future development along 420th Street.

“It’s been slower than we had hoped,” Iowa City Planning and Community Development Director Jeff Davidson said. “We still think it’s real important to have the property there, set up, ready to go. The one thing we’ve found that’s been positive is the state has told us – they get contacted by national and international companies that have a real strict list of criteria they’re looking for in a site – basically because we’re shovel ready and ready to go, we get put on their list.

“In a lot of cases they come and look at the property and talk to us. Maybe we’re one of 20 locations, but at least we get them here in town, we start building a relationship with them.”

The city received grant money to help establish the industrial park, but it has footed about $12 million of the nearly $14 million spent, according to project costs provided by the city’s engineering department.

The city purchased the 173 acres, located near the long-established Scott Six Industrial Park, from the Bonnie Prybil estate for $2.4 million in 2009. In subsequent years, the city received a pair of state-issued grants totaling $2.3 million for rail and road work. It spent an additional $9.5 million to complete the road and utility extensions.

Although Iowa remains a national leader in wind energy, companies have cut hundreds of jobs in the state this past year. Just last week, Acciona Windpower in West Branch announced that it was laying off 40 employees – about half the workers at its turbine plant – citing lagging wind energy expansion.

That downturn in the industry has forced Nadicom to rethink its manufacturing focus and has caused the city to shift its marketing strategy for the industrial park.

Karunakaran said he has invested too much into the idea of opening an Iowa City factory to scrap plans entirely. Instead he is looking at a market broader than manufacturing parts for turbines. The soonest Nadicom could bring a factory to the market would be 2015, he said.

“For me, the project is still viable,” Karunakaran said. “I still need to do a lot more convincing to the financial market, which I’m working on. We’ve gone from just supporting wind energy and have expanded our market.”

The city likewise is casting its net wider than the wind energy sector in its recruitment of manufacturers.

“It’s obvious that the wind power industry from a couple of years ago isn’t quite in the same place that it was,” Davidson said. “So we’re going to start marketing hard to other sectors besides just the wind power industry because we have a lot of potential sitting out there, and we want to make sure everybody knows it’s available.”

Eric Hanson, communications director for ICAD Group, said the industrial park was formally certified as “shovel ready” by the Austin Consulting Group in May 2012. That means a third party has deemed the site ready-to-build with aspects such as utilities, zoning, mapping and environmental protections already squared away – potentially expediting projects.

Hanson said ICAD has seen an “uptick in prospect activity” and has hosted face-to-face meetings and site visits in recent months.

“As the national economy continues to strengthen, we’ll start to see more and more ripples of that in project activity,” Hanson said in an email.

URL to article:  https://www.wind-watch.org/news/2013/03/15/four-years-and-12-million-later-city-owned-industrial-park-sits-vacant/