Kraft Heinz can move forward on a development agreement that will bring more than $62 million in improvements to its Mason City plant, after the Mason City Council unanimously approved the deal at Tuesday night’s meeting.
In the expansion at the 1022 12 St. NW location, 8,000 square feet would be added to build a storage area for temperature-sensitive ingredients. Additionally, a new ammonia engine room would be built as part of a longer-term plan to phase out any fluorocarbon use in refrigeration. Finally, there would be a swathe of so-called “internal improvements” to aid in processing and packaging efforts.
The plan, which had part of its financing approved by the Iowa Economic Development Authority Board in May, was initially set for a public hearing June but was pushed back twice while Kraft attorneys considered the agreement.
At the city council meeting, plant manager Janelle Kruger said that the support provided by the city would allow Kraft to move forward in Mason City. To which Mayor Bill Schickel eventually responded: "We look forward to proceeding."
After the financing plan was initially approved by the IEDA board, Kruger said that the Mason City Kraft facility was “designed with the future in mind.” "The investment demonstrates our long-term commitment to this community,” she continued.
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That plan, which was unanimously approved by the IEDA, would include a $185,000, 10-year TIF rebate from the city, and two state tax credits totaling $232,500, in part from the state's High Quality Jobs Program.
One issue that was raised by Councilman John Jaszewski was what would happen to some of those incentives if Kraft didn't hit its employment target of 32 new jobs.
Mason City Director of Development Services Steven Van Steenhuyse answered that those rebates would help ensure that Kraft hits its hiring goal.
According to IEDA Communications Director Jacque Matsen, Kraft Heinz has used the High Quality Jobs Program before for other facilities in other locations in Iowa but this is the first time for the location in Mason City.
Matsen said that a driving factor for the program is that, as of now, Iowa has the highest corporate tax rate in the country at 12 percent so such programs exist to incentivize business expansion.