International Paper planning $103 million expansion of Cedar Rapids plant

UPDATE: Memphis, Tennessee-based International Paper is planning a $103 million expansion of its Cedar River Mill plant in southwest Cedar Rapids. At its meeting Jan. 10, the Cedar Rapids City Council voted unanimously on a resolution to authorize sponsorship of an application to the Iowa Economic Development Authority (IEDA) for state incentives to support the project. According to council documents, International Paper is planning to build a new 20,000-square-foot building on the company’s Cedar River Mill campus at 4600 C St. SW. The building will house natural gas boilers and a water treatment plant for steam boilers for the International Paper plant. Steam for the plant was previously provided through the Alliant Energy’s coal-powered Prairie Creek generating station, which is in the process of being shut down. The $103 million investment for the project includes $20 million for the new building and $83 million for new machinery and equipment, according to council documents. The project will create seven new jobs, all of which meet the state’s High-Quality Wage threshold of $25.20 per hour, and retain the plant’s 240 existing employees. The project will qualify for a 10-year, declining-scale property tax exemption on the increased value generated by the project. In this case, the project is expected to generate $2.37 million in new taxes over the 10-year period, $961,000 of which will be exempted, council documents show. If the state incentives are approved, the city will provide local matching funds for the project through its Local Match Economic Development program, council documents show. The IEDA board is slated to consider International Paper’s application at its Jan. 20 meeting. In a presentation to the council Jan. 10, Cedar Rapids economic development coordinator Scott Mather told the council that the new facility is "essential for the continuation of operations for International Paper." Councilmember Scott Olson termed the plan an "exciting project" for the city. "what has always amazed me is how busy this place is and how much cardboard they actually recycle," Mr. Olson said. "It's really a very unique project that the city has become a leader in this type of process. Who'd have thought it those many years ago when they first started that plant? It's become an important issue in the world as a part of the changes occurring to save things and recycle versus put them in a landfill." Councilmember Ashley Vanorny said her family has a legacy with International Paper, noting that her stepfather has worked for the company for more than 25 years. "This is an anchor company to Cedar Rapids, and when I tell the story about all these really geeky, nerdy things about Cedar Rapids, International Paper always comes up," Ms. Vanorny said. "They use the glue that you (comes from) corn byproducts to glue the boxes that are created from our municipal waste that end up at Nordstrom and PetSmart ... we don't always understand our worth here in Cedar Rapids, how foundational we are and how much we create, but the creation of these boxes in the foundational system that is International Paper ... I'm really proud and thankful to have them as a part of our community. I'm very biased that they're in my district, but very proud of what they bring to Cedar Rapids." Mayor Tiffany O'Donnell added that expansion projects like this are a reminder of the full spectrum of economic development. "It really reinforces their place in Cedar Rapids," Ms. O'Donnell said. "One of the priorities of this council is not only recruiting new companies, as we talk about a lot, but it's making sure that we retain those who are here. And this absolutely serves that need." International Paper’s Cedar River Mill began operations in 1995, making it one of the newest paper mills in the United States, according to a company fact sheet. It is the largest 100% recycled paper mill in the Americas, manufacturing containerboard for boxes and other packaging. In an email sent Jan. 9, International Paper spokesperson Amy Simpson said the company has been studying options for an alternate steam supply since learning of the planned shutdown of the Prairie Creek generating station. "One of the options being explored is to produce the steam onsite through the construction of two package boilers," she said. "We continue to work closely with the city and state on the project and appreciate their collaboration."