CLEAR LAKE | Clear Lake’s so-called “mystery company” is a mystery no more.
McKesson Corp., a leader in the health care and pharmaceutical industry, is the company behind construction of a 340,000-square-foot warehouse and distribution center in the Larry Luker Memorial Industrial Park.
The identity of the company was confirmed during an event Thursday morning at Clear Lake City Hall.
McKesson was founded in 1833 by John McKesson and Charles Olcott as a wholesale importer of therapeutic drugs and chemicals. The Clear Lake project is worth an estimated $65 million. The economic impact to the North Iowa area over the next 10 years is estimated at $310 million.
“Clear Lake has long been recognized as a very business-friendly community,” Clear Lake Mayor Nelson Crabb told the crowd at City Hall Thursday morning.
“One of the top companies in the United States has taken notice and is poised to put down roots right here," Crabb said. "It is my sincere hope that other businesses will take notice of the benefits we have to offer.”
Thursday’s announcement was rather low-key as another hurdle still remains for the project. Company representatives are scheduled to appear before the Iowa Economic Development Authority at 10 a.m. Friday in Des Moines concerning McKesson’s application for state aid through the High Quality Jobs program.
That program provides tax credits and direct financial assistance to offset some of the costs incurred to locate, expand or modernize an Iowa facility. Businesses must meet certain wage requirements to qualify. An assistance package can include forgivable loans, tax credits, exemptions or refunds.
No company officials were on hand for Thursday’s Clear Lake announcement.
“The project is not yet fully realized,” said City Administrator Scott Flory. He said should the incentive package be approved, representatives from the company would be in Clear Lake at some point in the future to meet with the public and answer questions about the project.
The warehouse and distribution center is under construction on two lots in the industrial park. The project is expected to create 164 new jobs with an annual payroll of approximately $6.5 million.
With headquarters in San Francisco, California, McKesson is ranked 15th on the FORTUNE 100 and has more than $137.6 billion in annual revenue.
The company’s chief executive officer is John H. Hammergren. McKesson has eight subsidiaries and about 85,000 employees worldwide.
Chad Schreck, chief executive officer of North Iowa Corridor Economic Development Corporation, said work began on this project 15 months ago.
“Clear Lake was one of many sites under consideration,” Schreck said. Officials were notified of Clear Lake’s selection as the location for the warehouse/distribution center in January 2014.
“This is an incredibly rare kind of project. There are thousands of communities across the country vying for these things every day. That we’ve gotten this far is a great testament,” Schreck said. “Very few communities could have met all the unique requirements of a project like this.”
The company remained a mystery throughout the last year while local officials approved development agreements and financial incentives. Windmill Realty LLC, a Delaware-based corporation, has publicly represented McKesson.
McKesson’s decision to go with what Clear Lake had to offer was a big win for the community, said Crabb.
“While not the largest incentive package considered by the company for the project, it was enough to demonstrate we wanted this project in our community,” he said. “I’m excited to see this project progress to the next step.”
Up until Thursday, the identity of the company was a closely-guarded secret with fewer than 10 people in North Iowa knowing McKesson was behind the project, Crabb said.
Local city, county and business representatives were required to sign confidentiality agreements barring them for identifying the company.
“It was just too economically important for this area for me to open up my mouth. I had to keep it shut. That’s why we, Scott, Chad and myself, we began to refer to it as the project,” Crabb said.
None of the city’s five council members was aware of the company’s identity. But that didn’t stop the council from approving a local investment package for the project.
“I am going to give all the credit to the mayor and Scott and having a lot of faith in their ability to make a judgment call,” said Councilman Tony Nelson.
“I anticipate seeing families move to Clear Lake, additional companies to expand in the future so I am very pleased to be a part of this and again I want to thank Scott and the mayor for doing such an excellent job and convincing us to make this come to fruition,” Nelson said.
The local investment in the project included a $1.675 million, 10-year forgivable loan and a property tax rebate with an estimated cumulative value of not to exceed $7.3 million over a 20-year period.
Flory said the loan was used for land acquisition and site development.
“It’s been a long time since a project of this magnitude or an employer of this size has located in Clear Lake, Iowa,” said Councilman Mike Callanan. “I think the thing I am most excited about is that it’s something that shows that Clear Lake and North Iowa can still be a viable growing entity.
"So many aspects of Iowa for many, many reasons are struggling economically. This is the type of thing that can push you forward economically. And hopefully we can continue to add some population to the area. I am just thrilled,” Callanan said.
Flory commended the community for its support despite the secrecy surrounding the company’s identity.
“Your patience and support is really the key in making this happen for Clear Lake. We are very, very lucky to have a community that is so positive,” he said.