State economic development approves $1.9 million tax credit for Sioux City project

DES MOINES - Iowa's economic development agency on Friday unanimously approved a $1.9 million tax credit for a company to build a rail car maintenance and repair facility in Sioux City.

The Iowa Economic Development authority approved the incentive for TrinityRail Maintenance Services, which plans a $29.5 million project that officials say will create 250 jobs.

'This is a great project,” said Chris Myres, of the Sioux City Economic Development Department. '(The 250 jobs are) pretty significant for us.”

The 150,000-square-foot complex will be built on 120 acres at Southbridge Business Park, where the city has been investing heavily in a large rail yard. The site is just south of the municipal airport.

'This fits perfectly because it's a great industry,” IEDA director Debi Durham said. 'It's just another anchor to this park. ... This is just another building block of building out the vision they had when they made those preliminary investments (in the business park).”

Durham is the former head of the Siouxland Chamber of Commerce.

The incentives to TrinityRail will be provided through the state's Targeted Jobs Tax Credit Withholding Program, which allows new or expanding employers in border cities like Sioux City to divert a portion of their state payroll taxes for capital investments.

Program guidelines require the jobs to pay at least $16.36 per hour, or 100 percent of the average for wages in Woodbury County.

Sioux City plans to provide a $1.4 million reimbursement grant for grading and site preparation, $3.6 million in land at the business park and a $150,000 property tax rebate, IEDA records show.

'The extensive investment made by TrinityRail will bring skilled jobs and create a substantial ripple effect within the community,” Mayor Bob Scott said.

TrinityRail Maintenance Services is a subsidiary of Trinity Industries, a Dallas-based company that manufactures rail cars to transport chemicals, coal and other materials. The company also provides products and services to the energy, transportation, chemical and construction sectors.

TrinityRail would be the second tenant in the Southbridge Business Park, joining Sabre Industries, a telecom infrastructure company which opened there in 2011.

'Constructing a new maintenance and services facility in Iowa enhances our operational flexibility to serve the needs of our customers,” D. Stephen Menzies, senior vice president and group president for TrinityRail, said in a statement.

A surge in tanker cars transporting crude oil and ethanol through the region has spiked demand for TrinityRail's services.

BNSF, another mainline rail carrier that serves Sioux City, is transporting more than half of the crude produced in western North Dakota's Bakken fields. With the majority sent via rail to markets in the east, the BNSF track that enters Sioux City from the north is a secondary route for some of the crude, which is sent to refineries on the Gulf Coast or to the southwest.

Dave Dreeszen, of the Sioux City Journal, contributed to this report.