Project will create 200 jobs, attracts new company to Iowa
Marissa Payne
CEDAR RAPIDS — Crews have begun moving dirt to build a massive new $140.6 million manufacturing facility for Wisconsin-based high-end appliance company Sub-Zero — marking a milestone for a project that will create 200 jobs and bring a new company to Iowa.
State and city of Cedar Rapids officials, the Cedar Rapids Metro Economic Alliance and Sub-Zero Group Inc. development partners celebrated the beginning of construction of the 614,000 square-foot factory at 10015 Sixth St. SW during a groundbreaking ceremony Wednesday. The facility is near The Eastern Iowa Airport and Interstate 380 in the fast-growing southwest quadrant.
“Today marks the beginning of a new chapter in our journey of economic development in Cedar Rapids,” City Manager Jeff Pomeranz said.
In June, the Iowa Economic Development Authority board awarded $2.56 million in investment tax credits and sales and use tax credits to Sub-Zero. The state also approved giving Sub-Zero a $1.135 million forgivable loan at the end of a seven-year contract period, contingent on a local match.
The Cedar Rapids City Council in June signed off on a 20-year, 75 percent tax break on the increment value generated by the project — an estimated net present value of $15.4 million.
Construction is slated to be complete by August 2025.
Pomeranz said the city and Economic Alliance responded to a request for proposals to lure Sub-Zero here.
“In a business world, it's relationships that really become absolutely critical, particularly as you move through the process and get closer to bringing the entity to your state and to your community,” Pomeranz said.
Scott Wareing, senior vice president of operations and product design with the Sub-Zero Group Inc. project development team, said the three years since COVID-19 began to spread challenged the supply chain, prompting the company to evaluate its future road map and manufacturing strategy.
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“It boiled down to say we need more manufacturing footprint and it says we need to import more of the manufacturing that we currently have with partners today if we want to ensure resilient supply for our consumers,” Wareing said. “That ultimately was the driving point of saying we need another facility.”
Wareing said the collaborative effort by the city and Economic Alliance and helpful spirit of area businesses influenced the company to choose to locate its new facility in Cedar Rapids. Economic Alliance staff arranged for Sub-Zero to meet with plant managers and business owners of about 10 local companies.
Despite the competition for talented workers while employers contend with a labor shortage, Wareing said business leaders showed openness, candor and an attitude of “rising tides lift all boats.”
Sub-Zero hired Toronto-based real estate services firm Avison Young to help identify the company’s priorities and come up with a list of about 900 communities to choose from, Wareing said. With that list, officials narrowed it down to about 17 communities and eventually nine that they visited in person.
The third-generation, family-owned company is approaching its 80th year in business. It has three large manufacturing plants around the United States that have grown and are full, Wareing previously said.
Sub-Zero has three brands: Sub-Zero refrigerators, Wolf ovens and ranges and Cove dishwashers.
“We don't go out and build factories every day,” Wareing said. “We are a relatively small company, so building a factory of this size is a huge deal for us, so we took this process extremely seriously.”
Ron Corbett, vice president of economic development for the Economic Alliance, said the high-quality job creation will amount to a multimillion-dollar payroll coming out of the facility every year.
“That money trickles out to the community” to restaurants, retailers, banks and other financial institutions, Corbett said.
With other communities around the Midwest competing for this facility, city and state financial incentives — as well as lower state corporate tax rates — support Iowa’s ability to attract companies like Sub-Zero, Corbett said.
Debi Durham, director of the Iowa Economic Development Authority and Iowa Finance Authority, said Iowa is moving from being one of the least to most competitive states with its tax rates by 2026, when there will be a flat corporate tax rate of 5.5 percent and a personal income tax rate of 3.9 percent.
“The company works tirelessly to live up to its legacy of designing and innovating consumer products with premium-grade materials that quite frankly instill very strong brand loyalty — and I am speaking from personal experience,” Durham said. “In Iowa, we don't just wait and hope for growth in this important sector — the state's largest. We actually strive every day to create a culture in which our businesses can prosper.”
Mayor Tiffany O’Donnell was unable to attend the groundbreaking Wednesday, but Mayor Pro Tem Ann Poe shared a letter on her behalf and said strengthening industry clusters such as manufacturing and attracting new businesses to Cedar Rapids are all part of the city’s economic development strategy.
“Sub-Zero’s manufacturing facility will provide more of these vital opportunities for our residents and further enhance the city's reputation as the center of industry and innovation,” Poe said.
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