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Big Country gets big discount

Tiffin council approves 5-year TIF incentive

By Lori Lindner
North Liberty Leader
TIFFIN– The City of Tiffin is preparing to give a fairly significant tax break to a local business in town.
At the Tiffin City Council’s Feb. 13 meeting, Big Country Seeds owner Dan Steines approached the council with a request for a five-year tax abatement for a planned expansion of his business.
Mark Nolte, president of the Iowa City Area Development (ICAD) group that provides business development assistance to new and existing businesses in the Corridor, supported Steines’ request. Nolte told the council he expects Steines’ expansion to create between five and 10 new jobs, and asked if the abatement could be funded through Tax Increment Financing (TIF).
Big Country Seeds, a distributor of agricultural seed, chemicals and fertilizer, is located in Tiffin’s industrial park area. Big Country’s current building is 40,000 square feet, and Steines told the council he plans to expand his facility by between 25,000 and 30,0000 square feet, and purchase equipment in order to do industrial recycling of products that would otherwise be going into the landfill.
Steines told the council his annual tax obligation was around $36,000. Doubling his operation wouldn’t necessarily double his tax, Nolte said, and estimated the city’s rebate on the increment would probably be closer to $24,000.
City council member Royce Phillips expressed pros and cons of the request.
“I would like to say you have been here several years and have been a good citizen and contributed to the city,” said Phillips. “I think tax abatements for business are good, but I’m not sure five years is appropriate.”
Steines said he felt an abatement for his investment, which he guessed would be around $1 million, was indeed appropriate.
“It is not taking money out of the city’s pocket, because in five years you will have a building there that’s paying taxes. It’s in the city’s interest,” Steines said.
“Five years is fairly significant investment for the city,” Phillips said.
“If I don’t build it at all you won’t have any (more) money in five years,” Steines countered.
In her memo to the council, Tiffin City Administrator Michon Jackson suggested that a stipulation tying the abatement to number of permanent jobs created would hold the business accountable for its promise of economic stimulation.
Subsequently, in the meeting, Tiffin Mayor Steve Berner also said he would feel better if the abatement could be tied to the number of positions the expansion actually generated.
“That’s not what I’m asking for,” Steines said, and reiterated that if the city wasn’t interested in the five-year abatement, he would not be interested in expanding his business. “I won’t do it unless it’s five years. If I can’t do it here, I will do it someplace else.”
The argument was enough to soften the council’s resistance.
“The value of property is going to put funds in on the back end here,” Phillips said. “There is no ‘lose’ for the city.”
Councilor Jim Bartels moved to grant Big Country Seeds the five-year TIF abatement, and the motion passed 4-0 with council member Mike Ryan absent.
The tax abatement will begin the year after the expansion is complete, the city’s urban renewal plan will be amended and an agreement will be drafted between the parties, Jackson noted.