International Paper’s $103 million Cedar Rapids expansion awarded $1.2 million from Iowa Economic Development Authority

CEDAR RAPIDS — International Paper’s $103 million expansion of its Cedar River Mill facility was awarded $1.2 million in state tax incentives Friday, supporting its proposed development of a more sustainable structure that will reduce greenhouse gas emissions by more than 20 percent in the coming years.

The Iowa Economic Development Authority board approved tax credits for the company — one of the world’s leading producers of renewable corrugated packaging and cellulose fibers — toward its new 20,000 square-foot facility on the existing mill site at 4600 C St. SW, adjacent to the paper machine buildings.

At the company’s Iowa manufacturing locations, International Paper creates material for fiber-based packaging products. The key segments served include e-commerce, processed food and beverage, fruit and vegetables, protein, distribution and durable/nondurable goods.

The project was eligible for state incentives under Iowa’s high-quality jobs program, and ultimately received $800,000 in investment tax credits and a $400,200 in sales, service, use tax refund.

“This is a major investment in Cedar Rapids and a testament to our economic development and growth strategies,” City Manager Jeff Pomeranz said in a statement. “This project demonstrates International Paper’s commitment to Cedar Rapids. We are proud to support their investment and look forward to the positive impact it will have on our community.”

According to IEDA documents, the Cedar Rapids facility pays a $30.24 hourly wage — above the state’s high-quality jobs threshold of $25.20. The project will keep 240 jobs in the city and create seven more, according to the city of Cedar Rapids.

The company congratulated its employees and thanked the city of Cedar Rapids and the state on Friday.

“This investment is a direct reflection of your hard work and dedication to our customers and reflects the company’s commitment to the community and our industrial packaging business,” Jay Royalty, senior vice president, Containerboard at International Paper, said of the employees.

The Cedar Rapids City Council last week approved awarding city incentives — 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.

International Paper’s Cedar River Mill located in Cedar Rapids currently purchases process steam from Alliant Energy’s Prairie Creek generating station. By 2026, Alliant Energy will no longer burn coal at its Prairie Creek generating station, so this International Paper location will lose steam supply on Dec. 31, 2025.

The proposed project will offer a new steam supply to enable International Paper's continued operations at the Cedar River Mill. The project calls for the construction of a two-story building to house the package boilers, water treatment systems and associated supporting systems.

Additionally, the development would reduce Cedar River Mill's total carbon emissions as International Paper transitions away from purchased steam using coal-fired boilers to on-site steam production through the use of two new natural gas-fired package boilers, according to the IEDA. Water Treatment equipment will be installed to provide water to the new boilers.

The new building will include transitions for direct access to the operating and ground floors. To accommodate the new structure and equipment, according to the IEDA, underground water, firewater and a process sewer will be rerouted at the building site. A new natural gas line to the mill site will support the package boilers.

Ron Corbett, Cedar Rapids Metro Economic Alliance’s vice president of economic development, said the project demonstrates the company’s support of the mill and the city.

“There was tremendous community excitement when the recycling paper mill was announced back in the early 1990s,” said Corbett. “Almost 30 years later the commitment by International Paper continues with this latest $100 million investment.”

Of the $103 million capital investment, $20 million will go toward building expansion and $83 million will cover machinery and equipment.

“One of our economic development goals is to retain and grow our community’s existing businesses. This investment checks all the boxes,” Mayor Tiffany O’Donnell said in a statement. “International Paper is a leader in resource recovery. This project will ensure a long-standing Cedar Rapids business can continue to serve our community’s sustainability goals and provide high-quality jobs for our workforce.”

Site work is anticipated to begin in November, with construction starting in November 2024. The new steam plant is slated to become operational at the end of 2025 and will be tested to support mill operations by Jan. 1, 2026, according to the IEDA.

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