A technology manufacturing firm is seeking tax incentives for a $40 million expansion of its Des Moines manufacturing facility to meet the growing demands of data centers.
The project would create 160 jobs, the most by any state-backed project in the city of Des Moines in records going back to 2011, according to Kanan Kappelman, a spokesperson for the Iowa Economic Development Authority.
Electrical Power Products, which engineers control and protection systems for data centers and utility markets, and its Austin, Texas-based parent company, Flex, are seeking $2 million in financial assistance for the new manufacturing facility on the 4240 Army Post Road campus.
In an acquisition valued at $1.1 billion, Flex in May bought Des Moines-based Electrical Power Products. EP2, as the company is known, had been in business for more than 35 years, according to a news release from Flex, designing and manufacturing control and relay panels. The deal aligned with Flex’s long-term growth plans, driven by electrical grid modernization and data center development, the release said.
During its Monday, July 13, meeting, the Des Moines City Council voted to support the company’s application to the Iowa Economic Development Authority’s Business Investment Growth program, formerly the High Quality Jobs program. The company would receive about $1.2 million from in state investment tax credits and $775,000 from a sales tax refund, according to the proposal.
EP2 employed about 500 workers by the mid-2020s, according to an online company history. The addition of 160 jobs would represent about a one-third increase from that number.
Unlike the High Quality Jobs Program, the Business Investment Growth, or BIG, program does not require cities to offer a local financial match. The City Council still needs to consider the preliminary and final terms of the project’s economic development agreement, according to the memo.
The application is the first step in identifying project financing sources, and the IEDA board is set to consider it when it meets Friday.
What would Electrical Power Products’ facility expansion include?
The new building would house fabrication, assembly and wiring work for electrical infrastructure equipment EP2 makes for data centers and the utility market, according to a City Council memo.
The building alone is estimated to cost $20 million and manufacturing machinery could be another $10 million. Computer hardware could total $1.5 million, the memo said.
Electrical Power Products’ current 302,000-square-foot facility was built in 2017, Polk County Assessor’s records show. It sits on 20 acres just south of the Des Moines International Airport. Neighboring the facility are 19 undeveloped acres proposed for the EP2 addition. Both parcels are owned by ACS Acquisitions Inc., a Delaware corporation associated with Flex, county land sale records show.
IEDA backs even larger job-creation project in Des Moines metro
Although it would be the largest state-backed job creation project in the city of Des Moines, EP2 falls behind another recent project when it comes to the wider Des Moines metro: a 150,000-square-foot JBS sausage plant under construction in Perry that is expected to create 250 jobs, the IEDA’s Kappelman said.
The incentive package for the Perry project ― which helps salve the sting of Perry’s 2024 loss of its longtime Tyson Fresh Meats pork processing plant ― includes investment tax credits and a sales and use tax refund totaling just over $12 million.
Kappelman also cited IEDA’s support in 2013 for expansion of Principal Financial’s downtown Des Moines headquarters, which was credited with helping retain 1,740 jobs.
Kate Kealey is the growth and development reporter for the Register. Reach her at kkealey@registermedia.com or follow her on X at @Kkealey17.
This article originally appeared on Des Moines Register: Project would be Des Moines’ biggest state-aided job creator I Exclusive
Reporting by Kate Kealey, Des Moines Register / Des Moines Register
USA TODAY Network via Reuters Connect
By Kate Kealey, Des Moines Register | USA TODAY Network
