Government

Unfazed by owner's past, Cedar Rapids City Council agrees to negotiate $2.3 million tax break

Midwest Third Party Logistics wants incentives for $30M development

The Cedar Rapids City Council chamber at City Hall on Tuesday, Oct. 8, 2013, in southeast Cedar Rapids, Iowa. Cedar Rapids. (Jim Slosiarek/The Gazette)
The Cedar Rapids City Council chamber at City Hall on Tuesday, Oct. 8, 2013, in southeast Cedar Rapids, Iowa. Cedar Rapids. (Jim Slosiarek/The Gazette)

CEDAR RAPIDS — City officials said Tuesday they are not concerned about negotiating a $2.3 million tax break with a Cedar Rapids logistics company whose president served two years in federal prison.

Rick Stickle, president of Midwest Third Party Logistics, served prison time from 2006 to 2008 after being convicted of orchestrating the dumping of 442 tons of diesel-contaminated grain in the South China Sea and conspiring to impede a U.S. Coast Guard investigation. Now back in control of his company, Midwest Logistics is seeking subsidies for its $30 million warehouse and distribution development in the southwest quadrant.

“He paid his debt to society and came back to Cedar Rapids and built up his business and created jobs,” Cedar Rapids Mayor Ron Corbett said before the meeting. “He’s out and moving forward.”

Justin Shields, City Council mayor pro tem, said after the meeting, “That’s been quite a while. He’s cleaned up his act. He’s been working in the community and doing projects.”

Stickle’s past did not come up during a staff presentation nor as the City Council deliberated the project that promises nearly 800,000 square feet of warehouse space built in phases and at least 25 jobs at 4645 20th Ave. SW, near Wilson Avenue SW and Jacolyn Drive SW.

The City Council voted 8-0 — Corbett left the meeting early — to authorize participation in the project under the city’s high quality job program and to create an urban renewal area, which is the mechanism for using tax increment financing to rebate taxes to developers. The proposal is for a 50-percent tax break for 10 years on the property that is expected to increase in value from $1 million to $18.75 million.

Stickle did not return a message left at his business.

In a 2009 email interview with The Gazette, Stickle said he went to prison “not because of doing something wrong, but rather because of inept and dishonest employees.”

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In 1998, a fuel leak was discovered on the SS Juneau as it attempted to unload wheat intended for the humanitarian group CARE in Bangladesh. Bengali authorities refused the grain, and in 1999 officials from Sabine Transportation — another Stickle company — hired 15 Bulgarian nationals to dump the wheat into the ocean during its return trip to the United States.

Several Sabine and SS Juneau executives also were convicted. Sabine paid a $2 million civil penalty and Stickle was fined $60,000.

Stickle resigned as chief executive of Midwest 3PL.com before reporting in October 2006 to the Federal Correctional Institution in Oxford, Wis. He reclaimed his position at Midwest after returning to Cedar Rapids in September 2008.

Caleb Mason, a Cedar Rapids economic development analyst, said the city works with companies rather than individuals, and if a project meets the city’s requirements for economic incentives terms are laid out in a binding legal agreement.

“As long as a company is eligible to do business in the state of Iowa and they are not in litigation, we will work with them,” Mason said.

City council member Scott Olson raised one concern about incentivizing a long-term deal when the city has an abundance of warehouse space.

“Our market is flooded,” Olson said. “When (incentives) occur it gives them a disproportionate advantage over the rest of the market.”

l Comments: (319) 339-3177; brian.morelli@thegazette.com

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