Flexsteel plans to keep factory in Dubuque

Dubuque-based Flexsteel plans to open a new factory in its hometown.

The furniture maker announced Friday that it has reached a tentative agreement with the city to build the new factory. The new plant would cost about $28 million and be about 250,000 square feet, according to a statement from the Greater Dubuque Development Corp.

Final plans rely on agreement approvals by the Dubuque City Council and the Dubuque County Board of Supervisors, among others. The state's economic development agency also will consider a request for incentives for Flexsteel.

Overall, an incentive package for Flexsteel is valued at more than $10.2 million, according to city documents.

In a memo to the city council, City Manager Michael Van Milligen told council members Flexsteel's choice to remain in the city is partially due to having reached collective bargaining agreements with the company's three unions.

As part of its agreement, Flexsteel has said it will retain at least 200 jobs, less than its current employment level.

'In my discussions with union representatives, they have always been aware that this would be a job-retention project and not a job creation project. In fact, all parties have been aware that the goal of Flexsteel was to become more efficient and, therefore, more competitive in the marketplace, and that these efficiencies would actually lead to some near-term job reductions,” Milligen wrote in his memo.

The company has about 218 employees in its current plant, the Dubuque Telegraph-Herald reported. The company employs more than 400 in the city, according to the Greater Dubuque Development Corp.

Flexsteel said last September it would close its existing plant and construct a new one. While the company eyed Dubuque for the new factory, company officials said it also would look at other locations.

'With our corporate history and long-term commitment to the Dubuque community, the company desires to remain in the Dubuque area, ' Flexsteel President and CEO Karel Czanderna said in a statement in September. 'However, before finalizing a decision regarding location, we must ensure we can operate in a new facility while remaining competitive in the market.”

The plant Flexsteel currently uses was built in 1897. The company cited the factory's age as one reason why it considered at a move.

In addition to an agreement to develop the new factory, the deal would have Flexsteel pay $1.3 million from Dubuque County for land for the new plant. Dubuque Initiatives, a not-for-profit organization, also would have to agree to demolish the old plant and prepare the site for new development.

The Iowa Economic Development Authority will review Flexsteel's incentive request Friday, according to city documents.

The state request includes $293,200 in tax credits, a $750,000 tax refund and a $1 million forgivable loan for demolition at the current plant.

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