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Iowa, Illinois competing again for $1.2B fertilizer operation

Illinois Correspondent

SPRINGFIELD, Ill. — As construction continues on a controversial new fertilizer plant in southeastern Iowa, state officials in Illinois have put the finishing touches on a package of incentives they hope will lure another company’s new plant here.

It was the level of incentives offered in Iowa that made the siting of the first new plant controversial, as critics of Gov. Terry Branstad’s package of tax breaks called into question why incentives needed to total approximately $100 million.

Branstad last week defended the move, noting most of the tax breaks extend out over 20 years and are not applicable until the plant is up and running successfully.

Illinois unsuccessfully sought that same plant, under construction now by Egyptian-based Orascom Construction Industries in Lee County, Iowa. The $1.4 billion plant is expected to create 2,500 construction jobs and 165 permanent jobs when completed.

The new plant, proposed by Cronus Chemical LLC, Orascom Construction Industries, is expected to cost about $1.2 billion and create 2,000 construction jobs and about 150 permanent positions. The Delaware-based company is eyeing a site in Mitchell County in northern Iowa, and near Tuscola in central Illinois.

Officials in both states confirmed negotiations with the company are continuing and, in light of those negotiations, say they are limited in what they can discuss publicly.

Illinois state Rep. Adam Brown (R-Champaign) has sponsored H.B. 2496 that calls for a waiving of all property taxes for a fertilizer plant that locates on a specific site in nearby Tuscola. 

He said on the House floor the bill is necessary to compete with Iowa for the plant; Iowa officials, he said, have offered a package totaling $35 million in tax breaks.

It is not known how much the Illinois bill is worth, but the value is in the multimillions. “Project Cronus would be a huge boost to the local economy in terms of construction jobs and overall investment,” Brown said. “But Illinois needs to step up its incentive package to bring this project to the state.”

His bill, referred to the House Revenue Committee, would qualify the plant for tax exemptions and investment tax credits, including exemption from state gas and electric taxes, and a state sales tax exemption on personal property. The property tax exemption was estimated at about $12 million.

Once Brown introduced his bill, Iowa officials acknowledged they are pushing hard to land the new plant, too.

Brenda Dryer, executive director of the Mitchell County Economic Development Commission, said in a statement, “Project Cronus indeed would bring hundreds of permanent, high-quality employment opportunities and a very large capital investment to north-central Iowa. At this time, I am not in a position to discuss further details of the project, as negotiations are still under way.”
She said the plant would serve farmers in three states: “This potential project would enhance our existing industries and have a far-reaching impact on agriculture throughout this region of the country.”