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State approves incentives for Waterloo pork plant upgrade; 245 new jobs promised

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Officials today approved state incentives for a project in Waterloo that’s expected to create 245 new jobs at a pork processing plant. Tyson Fresh Meats already employs 2,900 at the facility.

“It will be a $28 million capital investment that the company is making,” says Iowa Economic Development Authority spokeswoman Tina Hoffman. “That will give them the ability to expand and renovate their existing facility in Waterloo.”

The Iowa Economic Development Authority’s board has voted to provide the company with $2  million in state tax credits and refund nearly $400,000 in state taxes that would be charged on construction materials. Company officials pledge to pay the 245 new plant workers at least $17.29 an hour.

“These are great jobs for the area,” Hoffman said. “The High Quality Jobs program has a qualifying wage that is based on a market wage….so all 245 new jobs will be at or above that wage.”

Also today, state economic development officials approved incentives for a new fiberglass recycling facility in Newton. Global Fiberglass Solutions will employ 57 people in Newton once the facility is completed.

“They’re going to locate in some of the old Maytag facilities where they can create recycled materials from decommissioned wind blades and other products,” Hoffman says.

Newton is already home to a company that makes the towers for wind turbines. The headquarters for Global Fiberglass Solutions is near Seattle. The company’s spending $6 million on its new facility in Newton.

Businesses in three other Iowa cities that are expanding are getting state tax breaks.

Beck’s Superior Hybrids plans to spend nearly $11 million expanding its processing facility in Mount Pleasant. Ten more people will be hired to work there once it’s completed.

A bank holding company based in Dubuque has promised to hire 31 more people after the company’s headquarters in Dubuque is expanded. Heartland Financial USA is getting an $80,000 state grant as well as the tax credits in support of the project.

A company in Marion that makes huge industrial “mixers” for chemicals, minerals, plastics and food is building a new testing facility next door to its manufacturing plant in Marion. The company promises to hire three new people in exchange for the state tax incentives.

Historic Hotel Maytag, owned by City of Newton, sold to investment group

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Photo of the Maytag Hotel featured on the Newton website.

The Newton City Council has sold the former Hotel Maytag to a private development group that plans to renovate the building. Newton City Administrator Mike Muckler says the investors plan to raise at least $10 million for the project.

“There’s several different financing mechanisms that they’re doing to bring that money into play,” Muckler says, “whether it’s historic tax credits, some affordable housing tax credits and different things like that.”

The five-story Hotel Maytag is on the east side of the courthouse square in Newton. It was the first hotel west of the Mississippi to have air conditioning and among the first in the country to have radios in each room. The Hotel Maytag’s ballroom closed four decades ago, but its rooms were still occupied until last year, when the city bought the property.

Former State Senator Jack Hatch of Des Moines, the 2014 Democratic candidate for governor, has re-developed properties in Des Moines and Cedar Rapids and he leads the group working on the Hotel Maytag’s revival.

“Not only is it elegant in terms of its size, but at the time in 1926, it was really a gem in which the founder of Maytag appliance company — really the heart and soul of this community — built it to not only receive visitors but for local exchanges as well,” Hatch said.

The “Hotel Maytag Investors” group paid the city $400,000 for the property. The City of Newton has given the project grants totaling $2.75 million, plus a 15-year property tax rebate worth up to $360,000. Hatch says the second floor ballroom where locals say Judy Garland once performed will be restored. The hotel rooms will be turned into 45 apartments. Commercial space will be available as well.

(Reporting by Randy Van, KCOB, Newton)

August saw unemployment inch up slightly

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The state unemployment rate edged up to 3.3% in August after sitting at 3.2% the last two months.

Iowa Workforce Development spokesman Cory Kelly says the state saw it’s fourth straight increase in non-farm employment even though the unemployment rate went up.

And he says Iowa’s labor force participation rate staid steady at 68.4%, which is ninth in the U.S.

Several areas saw increases in jobs. “The education and health services sector added the most jobs in August, 2,500 jobs and was fueled by growth in healthcare and social assistance, which is up about 1,900. This month’s gain marks the ninth-straight gain for this super sector,” Kelley says.

Some of the gains in jobs were offset by loses. “Largest losses this month are in leisure and hospitality — down 1,500, with declines nearly equal in both arts and entertainment –800 — and accommodations and food services at 700,” according to Kelly. “Financial activities posted the first sector loss since last August (-1,300). Finance and insurance industries were responsible for most of the drop, down 1,100.”

The construction industry lost 900 jobs and has seen a drop in five straight months. “Down 5,900 (for the year) which is partially due to large scale projects ending over the past 12 months,” Kelly says.

The unemployment rate one year ago in August was 3.7%. The U-S unemployment rate rose to 4.4% in August.

Ex-U.S. Representative Nussle: credit unions are the ‘original disrupters’ in financial services

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Jim Nussle

Former Iowa Congressman Jim Nussle today said Iowa’s 94 not-for-profit credit unions have filled a void as banks throughout the country and in Iowa continue to consolidate.

“When I started in congress back in 1990, seems like ages ago now, small community banks made up about 75 percent of the entire marketplace of financial services,” Nussle said. “That’s down to 17 percent today.”

Nussle is president and CEO of the Credit Union National Association. He’s in Des Moines today to address the Iowa Credit Union Convention.

“Credit unions were one of the original disruptors of the marketplace back in 1934,” Nussle said during an interview with Radio Iowa this morning. “We kind of forget about that and so my message to them is don’t be disrupted. Be the disruptor and we’re doing that, I think, in a very positive way for Iowans and for Americans.”

More than 1.1 million Iowans are members of a credit union and the state’s credit unions have about $16 billion in assets, according to Nussle.

“We’re growing,” Nussle said, “which is also something that not all businesses or industries can say these days and we can, which is positive.”

Nussle indicated the “speed of change” and stress in the industry has been rather dramatic, not only because of the “Great Recession,” but because of incidents like Wells Fargo’s admission that its employees created fake accounts without customers’ permission. The recent growth of on-line “peer to peer” lending presents credit unions with an opportunity rather than a challenge, according to Nussle, because credit unions are member-driven.

“We can be that new kind of disruption, which I think many people have interest in, like millennials in particular, but do it in a safe-and-sound and with-a-track-record-to-prove-it sort of way,” Nussle said.

Nussle, a Republican, served 16 years in congress representing northeast Iowa, including a stint as chairman of the House Budget Committee. Nussle said congress appears to be locked in a system right now that’s promoting dysfunction and inaction.

“It seemed to me, when I was there, there was always a point where you would make a decision,” Nussle said. “Yeah, there’d be a fight. There’d be a mess. There’s be partisanship. There might even be intraparty conflicts, but there was often then a point where it was like, ‘O.K., thank you. We’ve had that fight. We’ve that debate. Let’s make a decision.'”

Nussle said he’s reluctant to give advice to current members of congress because he doesn’t have the inside information they may have, but from the outside looking in, Nussle said it appears decisions on issues like health care, immigration, tax reform and infrastructure that could spur economic growth are languishing in congress.

“Have your fight. That’s fine. Have your discussion. Have your debate. People care about this stuff, so they should, but let’s make a decision,” Nussle said. “Let’s have a vote.”

Nussle suggested the polarization in the congress could be addressed if more states adopted Iowa’s non-partisan system for drawing congressional district lines.

“I’m proud of those who decide to serve the public. The vast majority do it, always, for the right reason,” Nussle told Radio Iowa. “…I don’t think it’s the people as much as it’s they’re locked in a system right now that is promoting this dysfunction.”

After running unsuccessfully for governor in 2006, President Bush appointed Nussle to serve as director of the Office of Management and Budget. Nussle has been president and CEO of the Credit Union National Association for three years.

New Ottumwa McDonald’s features upgraded technology for ordering

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A touchscreen at the Ottumwa McDonald’s.

What’s being billed as “the McDonald’s of the future” is coming to southeast Iowa.

A new restaurant in the global chain will hold its grand opening Friday in Ottumwa featuring several upgrades in technology. Donna Mann, who owns the Ottumwa franchise and seven other locations in Iowa, says the new style of restaurant is just the third to open in the state.

“We were going to be the first and our construction didn’t go as fast as we had hoped so now we’re the third,” Mann says. “Soon, in the Midwest region, which is Minneapolis, Iowa, Wisconsin and some other states, they will soon have 10 or 12 of these. By about 2020,

New Ottumwa McDonald’s.

every McDonald’s restaurant will be upgraded in some way.” Mann says the tech upgrades at the restaurant include several large touch-screens that resemble giant smartphones.

“We’ve added kiosks for those who would like to place their own order,” Mann says. “The younger generations especially likes to play with that. We will still have crew at the counter in case people prefer to place an order that way.”

After placing a dine-in order, you’ll get a number on a plastic tent that has blue-tooth technology embedded, so the server will know exactly where you’re seated. A recent survey released by Junior Achievement of Central Iowa found 77 percent of parents surveyed were concerned about their kids being able to find decent jobs due to so much automation.

Mann responded to the survey, saying the new kiosks may actually result in the restaurant needing more employees. “This is a convenience for our customers,” she says. “They don’t have to use that if they don’t like. But, by adding these, we’ve added four new touch-points for people to order, so more people can order at the same time. That creates more pressure in the kitchen area, so we need more people working in the kitchen area. We’re also offering table service where we will deliver your meal to your table. That requires more personnel.”

The new restaurant in Ottumwa replaces a McDonald’s location that was built in the late 1970s. It opens at 5 A.M. Friday with special drawings and other festivities.

(By Nick Davis, KBIZ, Ottumwa)

Fed Reserve Bank finds some improvement in Midwest economy

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A new report from the Federal Reserve Bank of Kansas City shows slight improvements in the economy of the Midwestern farm sector.

Nathan Kauffman, an executive with the Fed’s Omaha Branch, says lower farm incomes and weaker credit conditions continue in Iowa and neighboring states, but he says the second quarter was not quite as negative as it has been the past couple of years.

“We’ve seen commodity prices really be more or less stable the last couple of years, albeit at a lower level,” Kauffman says. “We’re just not seeing the same pace of decline that we would’ve seen a couple years ago as commodity prices had really fallen sharply.” Kauffman says many lenders were caught off guard a few years ago with the decline in commodity prices, but he says it seems like they have adjusted.

“A lot of lenders are still trying to work through some of those issues, communicate more effectively with their borrowers, maybe requiring a little bit more from their borrowers, recognizing that maybe not out of the woods even though things are not deteriorating as rapidly as they had been,” Kauffman says. During the second quarter, more bankers reported denying new farm loan requests compared to the previous two years. Kauffman says credit conditions are weaker compared to several years ago.

“There are a number of businesses that would be involved in providing service to agriculture,” Kauffman says. “So, when there are changes to the agricultural economy, that does have an impact across a larger spectrum of business interests.”

Producers are not being helped by the fact that interest rates on variable rate operating loans increased to nearly six-percent in the second quarter, the highest in five years. Kauffman says conditions are stabilizing, but commodity prices are still lower than five or six years ago.

Big donation to ISU College of Business

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Debbie and Jerry Ivy

Iowa State University officials announced Monday that the ISU College of Business will renamed after a couple who’ve pledged to make the largest-ever donation to the college.

Interim ISU president Ben Allen is a former dean of the business school. “Jerry and Debbie Ivy are the reason we’re here today,” Allen said at a event on the Ames campus. “It’s because of their extraordinary generosity that we are announcing a 50-million dollar commitment to name the College of Business.”

Jerry Ivy, a 1953 graduate of ISU, is president and chief executive officer of Auto-Chlor System, a national brand that provides cleaning solutions to the food service, healthcare and lodging industries.

David Spalding, the current dean of the ISU College of Business, thanked the Ivys for their donation. “Debbie and Jerry understand the value of a perpetual endowment that’s going to be available to fund new programs and activities at this college for generations,” Spalding said.

The Debbie and Jerry Ivy College of Business would be the first donor-named college at ISU, once its approved by the Iowa Board of Regents. “With this gift, we’re hoping this will enable not only the staff and the university, but the students – all the way through – to be able to reach out and keep expanding your goals, your dreams, and possibilities,” Debbie Ivy said.

The ISU College of Business has a record enrollment this fall of 4,921 students. The Ivys live in California.

Junior Achievement finds parents worried about kids finding jobs

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A new pork processing plant going online in northwest Iowa is relying heavily on robotics and automation is becoming more common in all sorts of Iowa businesses. The president of Junior Achievement of Central Iowa,Ryan Osborn, notes how some fast food restaurants now direct patrons to place their orders using touchpads instead of talking to a real person.

“Domino’s is going to be having cars that drive themselves to deliver your pizza,” Osborn says. “I think you’re just going to continue to see a ripple effect as the technology becomes available and consumers are going to have to get comfortable adapting to that.”

A new survey by Junior Achievement finds 77% of parents are concerned about their children’s ability to have a successful job or career as adults due to global competition and automation. The same percentage of teens surveyed had similar concerns. Many entry-level jobs we know today won’t be around in the next decade, Osborn says, and many of the jobs of tomorrow haven’t even been conceived of yet.

Osborn says, “When we think of education in preparing our next generation, the good-paying jobs that will be available for them, we’ll really have to think, what skills are they going to need and how can they be a value to the workforce and make sure we’re educating our young people in a way that sets them up for success.” It’s vital to encourage young people to explore post-secondary education, whether it’s at a university, community college, or a technical or trade school.

Osborn says having some level of technical training is critical as a high school diploma or GED just won’t be enough for many jobs.

“Automation can continue to increase, but that’s just going to put more emphasis on the soft skills that only human beings can bring to the table, such as critical thinking, collaboration, communication with each other,” Osborn says. “Those are skills we certainly try to promote and foster here at Junior Achievement.”

The nonprofit Junior Achievement of Central Iowa reached nearly 30,000 students last year through a network of more than 2,000 volunteers in 29 central Iowa counties.

Osborn says they focus on the core concepts of promoting financial literacy, instilling work readiness skills and inspiring entrepreneurship.

 

 

Casey’s drops out of the big box beer wars with big box stores

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The big box stores appear to have won one of the battles in the sale of big boxes of beer in Iowa.

The issue of beer sales came up during the Casey’s shareholder conference call Wednesday.  Casey’s CEO, Terry Handley, says they have reevaluated their strategy in some beer sales.

“Beer is an area I think we talked about in the past in terms of the market being very aggressive, especially in response to the big box stores doing a ‘buy two get one free’ on these premium case products. We have been following that and trying to compete,” Handley says.

He says trying to match those type of beer bargains has not led to big dividends for the Ankeny-based convenience store chain. “And while we have great unit growth — it doesn’t a make up the difference in terms of impact on sales. So we are going to walk away from that strategy and let them be aggressive on those 24 packs, those cases,” according to Handley.

Handley says they won’t give up selling beer. “We are going to concentrate more in wheelhouse — the six packs, the 12 packs — and even singles,” Handley says. Handley says they’ve found more consumer interest in liquor.

“Millennial are moving more toward liquor and wine and away from beer, although they are still very strong in the craft sales. We have over 800 stores now where we sell liquor. It’s our fastest growing category,” Handley says. He says they will stay focused on providing a good variety of liquors to keep up with customer demand instead of trying to match price cuts on cases of beer.

“I don’t think that you’re going to see us keep up with the Walmarts of the world in these deep discounts. It’s just not our program, it’s not our strategy. Let’s just do what we do best,” Handley says.

Casey’s corporate information says the company operates 1,950 stores in 15 midwestern states.

 

John Deere buys California tech company

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Quad Cities-based Deere & Company is spending millions to buy a Silicone Valley-based company.

Deere will pay $305 million this month for Blue River Technology, a Sunnyvale, California, ag technology firm. Blue River has 60 employees and will remain in Sunnyvale.

John May is president of Deere’s Agricultural Solutions. He says the Blue River team has designed technology that helps farmers reduce the use of herbicides by spraying only where weeds are present.

Ag technology includes the use of drones and robotics to efficiently grow crops. Deere is Iowa’s largest manufacturing employer.

(By Phil Roberts, Davenport)