An early incentive comparison put the cost of creating a single job at a proposed Scott County fertilizer plant at $97,786, compared with Alcoa Inc.’s expansion of its Davenport Works at $1,714 a job, according to Scott County documents.
The fertilizer plant is dubbed “Project Biscuits” in documents from the Iowa Economic Development Administration that put forth possible financial incentives for the project. The documents provided a side-by-side comparison of the $300 million Alcoa expansion and the proposed fertilizer plant. The documents were obtained by the Quad-City Times through an open records request to Scott County.
Egypt-based Orascom Construction Industries announced interest in building a $1.3 billion nitrogen fertilizer plant between Walcott and Davenport in July. It would have created 165 permanent jobs. The company withdrew a rezoning request in September after failing to win approval at the Planning and Zoning Commission and after a series of delays. The project now is expected to be built in Lee County.
Between state and Lee County incentives totaling $240 million, the fertilizer plant has the highest value of incentives of any project in state history overall and on a per-job basis, with a potential per-job incentive of $1.4 million for the permanent positions.
The Scott County incentives discussed early on included grants or loans, including a Revitalize Iowa’s Sound Economy grant that required local matches of 20 percent to 50 percent. The early incentive total was $16.13 million in one side-by-side comparison with Alcoa for a $300 million expansion in Riverdale.
Ultimately, the county offered a 15-year property tax rebate of 75 percent totaling $78.75 million while generating $26.25 million in property tax revenue and an additional $60 million from a natural gas replacement tax for taxing bodies.
Scott County Board chairman Tom Sunderbruch called that a key to the incentives, saying no money was leaving the county’s “bank.”
In 2011, Scott County provided Alcoa a $205,000 loan, while the company also received a $395,000 loan from the Bi-State Regional Commission’s revolving loan fund and a $3 million forgivable loan from the Iowa Department of Economic Development.
The Alcoa expansion is expected to create 350 jobs, so the total cost of state and local incentives per job is $17,028.
By comparison, the fertilizer plant would have created 165 jobs. The Alcoa jobs also are better-paying, with an annual salary of $66,000. The average salary for a fertilizer plant job was expected to be $50,000.
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Alcoa is expected to create 800 support jobs over three years, compared with what would have been 577 support jobs for the fertilizer plant project.
Household spending over three years supported through jobs created by the Alcoa project is expected to be $48.2 million. It would have been less than half that for the fertilizer plant, at $23.5 million.
The fertilizer plant, however, would have created more sales tax revenue and more payroll through construction, according to the documents.
The fertilizer plant would have created 2,176 construction jobs and 1,451 indirect jobs over three years, compared with 105 construction jobs and 70 indirect jobs for the Alcoa project, according to the documents. Still, the average wage for a construction worker or supplier to the fertilizer plant would have been $30,523, compared with $44,726 for the Alcoa project.