Kitchen appliance company Sub-Zero seeking incentives for $140.6 million facility in Cedar Rapids

CEDAR RAPIDS — Wisconsin-based refrigeration and appliance company Sub-Zero is seeking city and state incentives to build a $140.6 million light manufacturing facility in Cedar Rapids that would add nearly 200 full-time jobs, most considered to be at the high-quality wage rate.

The Cedar Rapids City Council is slated to consider a term sheet Tuesday outlining preliminary points of a deal with the company and the developer, an entity of Tiffany Earl Williams, to build a 400,000 square-foot building at 10015 Sixth St. SW, east of The Eastern Iowa Airport.

The proposal calls for a minimum investment of $90 million in real property and improvements, and $50.6 million in machinery and equipment, according to documents. Once built, the project will result in the creation of 192 full-time employees, 127 of which would be paid at or above the high-quality rate of $24.20 an hour.

If approved, the company would receive a 20-year, 75 percent tax exemption on the increment value generated by the project, subject to meeting the employment thresholds.

The city would provide a local match through its above-standard economic development program. The Iowa Economic Development Authority board is set to consider incentives through its High Quality Jobs program at its June 17 meeting.

Work is expected to start in August 2023 and wrap up by August 2025.

“This is a major accomplishment for the city,” City Manager Jeff Pomeranz said. “We feel very excited about welcoming Sub-Zero to our community. They’re going to be a great employer for the city, and we look forward to a long relationship with them. This is a major step to bring this company to our city.”

Pomeranz said the city is “extremely pleased” about the level of wages for the employees, and Cedar Rapids has worked closely with the family-owned company and other partners to bring Sub-Zero to the city.

The Cedar Rapids Metro Economic Alliance helped with company meetings and visits to potential properties. Kirkwood Community College provides job training for employees, and the state’s High Quality Jobs economic development program — if approved — will provide key funding to the development, Pomeranz said.

He also acknowledged the business community’s efforts to attract Sub-Zero and pitching why the company should locate here.

Mayor Tiffany O’Donnell said the project was a “big win for Cedar Rapids” and an indicator of the city’s momentum. She said Sub-Zero would fit well in the city and help it get to the next level.

“Cedar Rapids should feel particularly proud that this family-owned, multigenerational company chose our city after a very competitive search process,” O’Donnell said. “We have the people, we have the culture, we have the values, we have the educational development support that a world-class company like Sub-Zero looks for.”

Located near the airport between Walford Road and Wright Brothers Boulevard SW, this part of town has seen a boom in construction. Cedar Rapids has attracted growing manufacturing, warehousing and logistics and distribution companies, among others, thanks to easy access to the airport and highway network in the southwest quadrant.

Some other major projects nearby include a $108.6 million, 479,000-square-foot FedEx Ground distribution center on Commerce Park Drive SW, slated to wrap up in the fall.

And multinational aerospace company BAE Systems is expected to open a 200,000-square-foot classified defense aerospace facility worth more than $170 million later this year.

Westye Bakke launched the Sub-Zero company in 1945 after experimenting with refrigeration in the 1930s, in part searching for a way to store insulin to help his young son, Bud, manage his juvenile diabetes, according to the company’s website.

Sub-Zero’s launch marked the introduction of the first system for storing food at ultralow, subzero temperatures.

O’Donnell said her father was a salesperson for Sub-Zero in the late 1980s and early ‘90s. She said she brought that personal story to the company in business recruitment visits.

“It’s a point of personal pride to have a company that was part of my life growing up to choose our city,” O’Donnell said. “It’s wonderful.”

A development agreement finalizing the deal would be approved at a later date after the council and IEDA consider tax incentives.

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