JOHNSTON, Iowa -- Iowa may not be gaining a merged Dow-DuPont ag company headquarters, but community leaders are calling the deal reached Friday a "victory," regardless.
Dow and DuPont announced plans for a $130 billion merger at the end of last year, and that merger would result in the massive DowDuPont spinning off into three smaller companies: one focused on specialty products, one focused on materials and one focused on agriculture. Because of DuPont Pioneer's headquarters exist in Johnston, state and municipal leaders have been pushing for the new agriculture spin-off to be headquartered in the metro suburb.
Friday morning, the chemical giants announced the corporate headquarters for the agricultural company will be located in Wilmington, Del., where DuPont is already headquartered. However, the companies said agricultural operations would still have a strong presence in Johnston, Iowa, as well as Indianapolis, Ind., where the Dow Chemical's Agrosciences branch is located.
In addition, Dow-DuPont will name the branch in Johnston its Global Business Center, focusing much of its research and development activity here in Iowa.
The Iowa Economic Development Authority approved an incentives package Friday for Dow-DuPont to retain research and development jobs at the Johnston location. The IEDA's due diligence committee approved $16 million in incentives: $2 million in a forgivable loan and $14 million in research activities tax credits. The incentives apply for 250-500 research-related jobs the company expects to retain in Johnson. But in order to qualify for the full incentive package, it must keep a full 500 positions.
"The incentives that you saw today were for just the research and development, they're extremely modest, if you look at it," said Debi Durham, director of the IEDA. "And they're also contingent going forward - so no money will be expended until the approval has been done in Washington, and the three entities have been separated, and the Ag company stands alone."
The City of Johnston is expected to vote on its own $1 million incentive package for the company at a special meeting Friday afternoon at 1:00. When asked if she was disappointed Johnston didn't land "HQ-status," Mayor Paula Dierenfeld said she felt Iowa won in this deal.
"You know, we have been named the Global Business Center for the seed and the biotech business of the newly merged company," she said. "So that's what we really want to be, that's what our strength is. We wanted to maintain those research jobs, and we've done that. So we see that job growth occurring, and we see the investment continuing in Johnston. And that's what we want."
Right now DuPont-Pioneer in Johnston employs about 2,600 people. Those numbers aren't expected to dip much. Most layoffs that occurred when the merger was announced have already happened.
Some Democratic lawmakers say there are more important things we should be spending Iowa’s tax dollars on.
“When I look at these multi-billion dollar corporations like DuPont and Dow and so forth, do they really need $2 million in a forgivable loan from the taxpayers of Iowa when our resources are very scarce?” said Sen. Tony Bisignano.
Bisignano says while he's okay with the $14 million in research tax credits, he has a problem with the forgivable loan at a time when the state is struggling to fund other areas such as education.