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Collins Aerospace pursuing $22 million expansion to make microchips
Cedar Rapids City Council approves $1.05 million in incentives
CEDAR RAPIDS — Collins Aerospace is pursuing a $22 million expansion of its northeast Cedar Rapids campus to begin the production of microchips.
The Cedar Rapids City Council on Tuesday awarded $1.05 million in financial incentives to support the project for Collins, a division of Raytheon Technologies, to renovate an existing building on its campus between Collins Road and Blairs Ferry Road NE.
The Iowa Economic Development Authority board on Friday is slated to consider state incentives for the project through its high-quality jobs program.
The project would modernize a Collins’ facility and environmental controls for safe chemical storage/handling, water treatment and associated equipment and furnishings with a “class 100 clean room” — a manufacturing structure that uses HEPA filtration systems to keep the air clean.
The company will use the building to develop and manufacture microelectronic — microchip — technologies for Collins Aerospace communications products, with production expected to grow, city Economic Development Manager Caleb Mason said.
This facility also will position the company for future growth into adjacent commercial and defense markets, Mason said.
Under the preliminary terms of the deal, the company would renovate an existing 20,000-square-foot manufacturing building to create a 5,000-square-foot plating area, additional lab support and office space and a 6,000-square-foot class 100 clean room.
Of the $22 million minimum investment, $9.5 million would go toward the renovation and buildout of the facility, and $12.5 million would go toward machinery and equipment.
Work would start in April and wrap up by January 2026.
To receive financial incentives, the company must retain 25 existing employees and create no fewer than 16 additional full-time employees. At least 41 employees have to be paid at or above the high-quality jobs wage threshold of $25.20 an hour — generally in engineering and technical positions, Mason said.
As the local match, Mason said, the city would offer above standard incentives “to position this project for competitiveness in their entire portfolio and also based on the economic impact of the project.”
The city will provide three consecutive annual payments of $350,000 economic development grants starting in August 2025 through August 2027. Those grants will be funded solely from the Collins tax increment financing district.
Those three grants were consolidated to be awarded before the TIF district expires.
Mason said the company is reviewing the possibility of funding through the federal CHIPS and Science Act, which President Joe Biden signed into law last year to offer roughly $280 billion in funding to increase domestic research and manufacturing of semiconductors.
Council member Scott Overland said city staffers have been working with Cedar Rapids’ largest local employer to continue bringing innovation to Iowa’s second-largest city.
“I don't think we can underestimate the importance of these type of employers that are engaged in high-tech products, and having them in Cedar Rapids pays big dividends in the long run,” Overland said.
Mayor Tiffany O’Donnell thanked Collins for growing in Cedar Rapids and thanked the state for its financial incentives and recognizing the opportunity to grow the chip industry in Iowa.
“We can’t underscore how important it is to have Collins continue to reinforce its place here, and not just with their current work, but being a part of manufacturing chips,” she said.
A development agreement will come to the city council at a later date.
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