Aerials Mason City Kraft

Mason City Kraft Heinz.

More than $62 million and more time.

That's effectively what Mason City-area officials bought today after going in front of the Iowa Economic Development Authority Board. 

The former comes as part of an expansion plan by Mason City Kraft to grow the company's ready-to-eat line with an additional 9,200 square feet on the existing facility.

"Designed with the future in mind, our facility is going to be on the cutting edge of food manufacturing,” Mason City plant manager Janelle Kruger said. "The investment demonstrates our long-term commitment to this community."

Projected financing for the plan, which was unanimously approved by the IEDA board, 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. 

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 the program is basically a state incentive program we use for existing business within Iowa as well as outside to encourage business expansion.

Chad Schreck, who heads the North Iowa Corridor Economic Development Corporation, said that the deal signals a promising future.

"It's a great sign of its long-term commitment to North Iowa," Schreck said.

The other commitment for Mason City is the state financing requirements it has as a part of the River City Renaissance project.

Previously, the city had to provide weekly updates to IEDA staff until construction started on the downtown hotel project and submit a document to the IEDA by Sept. 17, 2018, that G8, the developer at the time, had either secured construction financing for the project or that it was in default on one or more of its provisions. 

With G8 being dropped from the project for allegedly defaulting (a lawsuit against the city is currently underway) and a final deal with new developer Gatehouse still not inked, Mason City officials were able to set a new deadline for the construction financing commitment of Sept. 30, 2019.

That move would give the city more time to work out any kinks with Gatehouse as it attempts to start construction before winter. 

Over time, Gatehouse has changed crucial elements of the planned Music Man Complex & Hotel in the face of rising costs.

According to Gatehouse representative David Rachie: Bonds approved by the city in 2017 don't account for inflation so developers have less money to work on the project, once pegged at $15 million. So, to adjust, Rachie said Gatehouse decided to put its planned hotel on top of the proposed conference center to save money.

The River City Renaissance is a $39 million project that includes the hotel plans as well as a multi-purpose arena, and related components. In February 2018, the IEDA Board approved a maximum benefit amount of $9,162,600.

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