Lost solar project exposes obstacles to luring big business to Iowa

A large solar energy manufacturer at one point was looking to build in Iowa but chose Louisiana instead, in part because Iowa could not offer the same public incentives, according to the state’s economic development chief.

Debi Durham, director of the Iowa Economic Development Authority and Iowa Finance Authority, told The Gazette that Iowa lost out on the opportunity to attract the manufacturer that was looking to build in Waterloo. The state “would have won” but “didn’t have enough incentives” to keep the company from looking to Louisiana.

Durham did not provide details of the proposed project or the name of the company. An authority spokeswoman said she could not share more information, and that communications with and about business prospects are confidential.

However, First Solar Inc. announced last month plans to build a $1.1 billion manufacturing facility in southwest Louisiana. The project is expected to create about 700 jobs and have an annual payroll of at least $40 million, the Associated Press reported. The facility will produce high-performance photovoltaic solar modules that are expected to be made with U.S.-made components, according to company officials. The project is expected to be completed in the first half of 2026.

First Solar Chief Executive Officer Mark Widmar, in a statement, said “Louisiana’s ability to deliver the talent we need stood out, thanks to its extensive workforce development initiatives and the presence of academic institutions such as the University of Louisiana at Lafayette, which now features a world-class solar energy lab.”

A company spokeswoman did not respond to an email seeking comment and to confirm whether the company was considering building a facility in Iowa. Waterloo Community Planning and Development Director Noel Anderson also did not respond to an email seeking comment. The city has plans to develop nearly 400 acres of farmland west of the Waterloo Regional Airport into an industrial park.

Durham told The Gazette Iowa was “No. 2” and “we would have won” had Iowa had enough incentives. “So had our ‘mega incentive’ legislation passed last (session), we could have closed the gap on that one,” Durham said.

A bill proposed by the Iowa Economic Development Authority to provide a package of state tax incentives to try to lure a major business development to Iowa stalled in the Iowa House on the final day of the 2023 legislative session.

To be eligible for the proposed “Major Economic Growth Attraction” — or MEGA — program, the project would have to be located at a certified site greater than 250 acres, involve an investment of at least $1 billion from a business primarily engaged in research and development, bioscience or advanced manufacturing and create jobs that pay at least 140 percent of the qualifying wage threshold. The proposal also would allow a business based in a foreign country that’s an ally of the United States to buy farmland for the project.

The bill cleared the Iowa Senate on a 45-2 vote, but House Speaker Pat Grassley said there were too many unanswered questions.

“I’m not convinced the proper legwork went into selling the program to the House members,” Grassley said a May 5 recording of “Iowa Press” on Iowa PBS. House Republicans said they were wary of granting foreign ownership of farmland, and Grassley suggested the size of the tax rebate was a concern. He said lawmakers might reconsider the package next year.

Durham spoke to The Gazette about the current business climate and plans for economic development.

Q: It seems like development is kind of cooling for new construction, due to interest rates. Are there a number of projects coming into the pipeline? Is that slowing?

A: “You know, we’re still seeing pretty strong housing numbers come through right now. And I think the only reason that we are is because there was such pent-up demand for housing. So right now, at least with our single-family lending, we are not really seeing a big drop off in loans. Now I expect that will happen. So they’re finding inventory out there somehow.”

The Iowa Finance Authority estimates the state needs an additional 42,000 homes by 2030 to meet the workforce demands of a robust Iowa economy. That includes a mix of owner-occupied and rental units, supportive housing for homeless people and market-rate homes. Durham said based on building permits being issued “and what we have in the pipeline today,” officials anticipate meeting that goal.

“The problem has been with the housing front — there’s more demand than inventory so we’re still seeing houses being built. And we’re not seeing a slow-up in any of our programs,” including workforce housing awards.

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Q: What about in terms of the state’s economic development pipeline?

A: “We were just at the groundbreaking” in Cedar Rapids for a new $140.6 million manufacturing facility for Wisconsin-based high-end appliance company Sub-Zero. The project in southwest Cedar Rapids is expected to create 200 jobs.

“Last week I was in Clinton for Atlas roofing, which is another really sizable new plant coming in there. I think it’s close to a $200 million plant. So our pipeline right now is still very full. But it’s in two areas. It’s in advanced manufacturing — a lot of re-shoring coming back to the U.S. and people shoring up supply chains. The second piece is you’re seeing bio-based chemical development, and energy is really, really strong right now. So our pipeline of projects (that the authority is exploring) has not slowed down at all. Now, whether we can land them or not is a whole different story.”

Durham mentioned the “mega site” bill and losing out on the solar project to Louisiana.

Q: Since you brought up the MEGA site bill, what’s the status of that?

A: “We’re having conversations with legislators (as well as leadership) with the full intention of bringing it back this next year. Because, again, on the Waterloo project to know that you were that close — and I don’t think we needed to match the gap on the incentives dollar-for-dollar — but I think we could have come closer; I think we could have landed that deal.”

Durham, too, said being able to point to a specific project and example that would have benefited from the legislation should help with its passage.

“Sometimes when you’re dealing with hypotheticals, because in my world I can’t tell you companies we’re working with, right? But here’s a deal we can talk about, right? Because we were there. We were hosting them. They made the decisions, and we know the reason why we didn’t win. So being able to put a name on it and some parameters around it, I think it helps the legislators to see how real these projects really are.”

Comments: (319) 398-8499; tom.barton@thegazette.com