City council approves tax incentives for former Maytag complex

The Newton City Council approved a resolution Monday night initiating property tax rebates for Newton Enterprises Inc., the new owner of the former Maytag administrative complex.

In a 6-0 vote, the board immediately raised the complex’s minimum assessed value by $1 million to $2.5 million allowing a 10-year capped property rebate of $1.2 million. Newton Community Development Director Bryan Friedman addressed the council, explaining qualification benchmarks that Newton Enterprises owner Reza Kargarzadeh will have to show in order for the complex to receive the rebates.

According to Friedman and city documents, in the first five years the facility will have to employ 175 people or have 60,000 feet of the 400,000-square-foot complex filled. The second five years will require the property owner to fill 125,000 square feet of space or employ 300 people. An additional $700,000 in rebates will be offered for a further five-year period if the building houses 600 employees or utilizes 200,000 square feet.

Friedman also told the council that stipulations within the contract require Newton Enterprises to sign tenants who have active businesses and employ personnel within the complex in order to receive the rebates. Utilizing the building for storage cannot be considered filling the space requirements.   

The agreement is largely based on a similar tax rebate contract reached with Iowa Telecom, and later Windstream Communications, for a 10-year period. Friedman said the difference is the employment and usage threshold that Newton Enterprises is required to meet.

The Maytag complex is located in a Tax Increment Financing (TIF) District coined the North Central Urban Renewal area. The former agreement with Iowa Telecom used the TIF valuation of $1.5 million assessed value, but the new agreement increases that value to $2 million for the second five years and to $4.5 million for the third five-year period. City documents show the area of the complex subject to the agreement currently is valued at approximately $4.5 million. City officials estimate that if the campus retains its current valuation throughout the 15-year agreement, Newton Enterprises will receive $1.27 million in tax rebates. Depending on the rate of growth, the company could receive rebates up to the rebate cap of $1.9 million.   

Kargarzadeh spoke before the council and said in addition to last week’s announcement of a clinical research laboratory partnership between Health Enterprises of Iowa and Skiff Medical Center, the Grinnell business man is in talks with an unnamed insurance provider that he estimates could fill nearly two floors of the corporate administrative building.

Council members had few questions but praised Kargarzadeh and his agreement to attract businesses to Newton. Member Noreen Otto thanked Friedman for his attention to detail in the contract. Mike Hanson praised both Kargarzadeh and Friedman for working together on the deal.

In a statement after the meeting, Councilman Jeff Price agreed.

“This is a win-win-win for the community. A win for the city, win for the citizens and win for Newton Enterprises,” he said. “I’m very excited to see the job creation ahead for this community. (We’re) heading in the right direction. Be proud of your community.”

In other action Monday night, the council:

• Approved a resolution 6-0 established licensing and fees attached to the ownership of miniature pet pigs. According to council material, pigs will be licensed by the Newton Police Department each year for a fee of $15. In subsequent years, an April 1 registration deadline will be imposed and an increased late license fee of $35 will be imposed.

The procedure states that owners will need to confirm with NPD officials that the animal has been spayed or neutered before a license will be issued. The remainder of the procedure is similar to licensing canines, including providing proof that the pig is up to date on all vaccines and documenting annual blood tests for brucellosis, pseudorabies and other diseases.

In accordance with the amended city code passed at the council’s April 2 meeting, the NPD will not license pigs over 80 pounds in weight or taller than 24 inches at the shoulder. City officials said that only one pig will be allowed per household.

• Passed a resolution 6-0 paying architect Doug Steinmetz $27,564 for design and construction specifications as part of phase 2 of the Fred Maytag Bowl Rehabilitation project. The payment was obtained from the city’s Whirlpool fund.

• Awarded the bid constructing 32 curb ramps at seven different city intersections to Precision Concrete of Brooklyn for $25,731. The improvements are part of the city’s Sidewalk Ramp Improvement Projects and will make the intersections compliant with the Americans with Disabilities Act requirements.

• Approved a resolution purchasing a fireworks display from J & M Displays for the city’s annual Fourth of July celebration. The cost of this year’s show is $7,000, payed for with funds raised by the Newton Parks Board. In 2012, the board raised $5,729 as of March 10, and board member Denis Combs told the council Monday that the remainder of the funds would be in city hall by today.

A city report shows that if the contract with J & M is signed by April 24, the city will receive an additional $518 in fireworks.                

Mike Mendenhall can be contacted at (641) 792-3121 ext. 422 or via email at