The economic impact of Davenport's proposed Sterilite Corp. deal is significant, but one detail about potential tax revenue generation for schools has caught the eye of city officials.
Davenport has approved a resolution in support of providing economic incentives to Sterilite, North America's largest manufacturer of plastic goods, offering more than $17 million in the form of infrastructure improvements and tax rebates.
Besides a total economic impact of $143.6 million, $30.4 million in new payroll and creation of 814 jobs, the construction of a 2.4 million square- foot facility on 160 acres in the Eastern Iowa Industrial Center could generate $834,000 in new property tax revenue for the first year.
Those revenues are split between four different taxing authorities, including $305,000 for schools.
The cumulative increase in property tax revenue to the city would be approximately $5.5 million for year one through 15 and would not exist without the proposed deal taking place.
The current land, which has an assessed value of $640,000, generates slightly under $12,000 per year in tax revenue, including $4,383 for schools.
The problem for Davenport city officials, however, is that the potential revenue for schools will not go to the Davenport Community School District. Instead, due to boundary lines, it would benefit North Scott Community Schools.
With the Davenport school district already facing troubles due to the state school funding formula, city officials have scheduled a meeting to discuss potential solutions to the problem.
"The schools benefit is not our schools," Alderman Mike Matson, 7th Ward, said. "This project and others, because it's in another district when it says schools, it doesn't mean Davenport schools."
Matson said because the incentives are coming from Davenport taxpayers, Davenport schools needed to reap the benefits.
Mayor Frank Klipsch said he will meet next week with representatives of the North Scott school district and Eldridge Mayor Martin O'Boyle about Davenport's options.
"What I told them was 'What's the incentive?'" Klipsch said. "I'm going to talk to them about where we are and what we can do about it. It's not a matter of them saying we can do it, but it's a big deal because you have to get state approval and board of education approval."
While Klipsch said it was not realistic to expect that the city would just receive money the money back, he said the outcome from the discussion could pave the way for Davenport to look at economic development sites that fall within the Davenport school district's boundaries.
In related action, a contingent of local workers petitioned the Davenport City Council on Wednesday to do what they could to make sure Sterilite hires local labor.
Bret Lacher, a Davenport resident, pipefitter and member of Local Union 25, who told aldermen he would prefer that the city holds Sterilite to using local labor like himself.
"Last winter, I had to pack a suitcase and leave my wife and three young children at home and go find a job where there was work eight hours north," Lacher said. "Only coming back every couple of weeks to see my wife and kids while local construction projects were filled with licenses plates that weren't Iowa or Illinois."
Brinson Kinzer, an electrican and member of the Scott County Board of Supervisors, did not speak on the county's behalf. But he did echo Lacher's sentiments of supporting the use of local workers.
"We need to use local contractors if we're going to give the incentives," Kinzer said.
Ryan Drew said the city often hears the same story about developers needing economic incentives to succeed only for local labor not to be utilized.
"We fast forward to the start of construction for the project and we begin to see workers imported from other communities, other states and other countries," Drew said. "This is the same work that our local school districts ask us on a routine basis to come to them and showcase to the youth the skills and careers available in the community."
Having listened to their pleas, several aldermen championed the quality of local workers and said they would work to promote hiring local labor.
"They need to be educated on the quality of the folks that can do the job," Matson said.