International Paper pursuing $103M expansion of Cedar Rapids facility

CEDAR RAPIDS — The Cedar Rapids City Council awarded tax incentives Tuesday to International Paper for a $103 million expansion of its Cedar River Mill plant the company said will keep 240 jobs in the city — and create more.

International Paper is looking to build a 20,000 square-foot facility to house a boiler and water treatment plant on the same campus as its current building at 4600 C St. SW. According to the city, the development will retain jobs and create seven new ones, all of which meet the high-quality wage threshold of $25.20 an hour.

The proposal calls for the construction of a new building and installation of natural gas boilers and water treatment plant for steam power to the facility. Power was previously provided through the coal-powered Prairie Creek Station, which is being closed.

International Paper, a manufacturer of fiber-based products, creates packaging products and pulp for diapers, tissue and other personal hygiene products. It has operated in Cedar Rapids since 1995.

“It is essential for the continuation of operations for International Paper,” said Scott Mather, city economic development coordinator.

The new building will be toward Highway 30 and C Street SW. Of the $103 million capital investment, $20 million will go toward building expansion and $83 million will cover machinery and equipment.

The standard incentive under this city program provides a 10-year, declining scale exemption of the increased value the project generates. Based on the proposed investment, the city estimates the project will generate $2.337 million in new taxes over a 10-year period, of which $961,000 will be exempt.

The Iowa Economic Development Authority Board is slated to consider awarding state incentives through its high-quality jobs program at its Jan. 20 meeting.

“The city has been in collaboration over the last several months with International Paper and the state on this proposed steam modernization project,” City Manager Jeff Pomeranz said in a statement. “Growing and supporting local industries is an integral part of the city’s economic development strategy and we appreciate International Paper’s proposal to make this significant investment to Cedar Rapids mill.”

According to the city, International Paper is among the top eight of its largest water users.

City Council member Scott Olson said it’s exciting to see this investment when the company could have opted to leave the city with the Prairie Creek decommissioning.

“I think this is an exciting project,” Olson said. “ … What has always amazed me is how busy this place is and how much cardboard they recycle. It’s really a very unique project and the city has become a leader in this type of process.”

Council member Ashley Vanorny — who represents District 5 encompassing much of the southwest quadrant — said the company takes pride in its people and the safety of its workers, and she’s proud of what International Paper brings to Cedar Rapids.

“This is an anchor company to Cedar Rapids,” Vanorny said. “ … But the creation of these boxes and the foundational system that is International Papers is really cool.”

Mayor Tiffany O’Donnell said this project serves the city’s need to not only recruit new companies, but keep the businesses already located here.

This project “reinforces their place in Cedar Rapids,” O’Donnell said.

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