IDED Financial Assistance Application_IBMTHE CITY OF DUBUQUE
Masterpiece on the Mississippi
Dubuque
All-American City
2007
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Application to the Iowa Department of Economic Development for
International Business Machines (IBM) Corp.
DATE: January 29, 2009
Economic Development Director Dave Heiar is recommending approval of the submittal
of a State of Iowa financial assistance application to the Iowa Department of Economic
Development on behalf of IBM Corporation.
This would provide $11,700,000 of State of Iowa financial assistance to IBM and
$450,000 to Dubuque Initiatives.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
V
Michael C. Van Milligen
MCVM/jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
David Heiar, Economic Development Director
THE CITY OF DUBUQUE
Masterpiece on the Mississippi
Dubuque
All-American City
2007
DATE: January 28, 2009
TO: Michael Van Milligen, City Manager
FROM: David Heiar, Economic Development DirectdF-
SUBJECT: Application to the Iowa Department of Economic Development for
International Business Machines (IBM) Corp.
INTRODUCTION
This memorandum presents for City Council review and approval a resolution authorizing
the submission of a State of Iowa financial assistance application to the Iowa Department of
Economic Development on behalf of IBM Corporation, an information technology company
looking to expand their operations within Dubuque, Iowa.
BACKGROUND
IBM intends to create a global services location in Dubuque. The Company plans to create
1,300 positions in the Roshek Building located at 700 Locust Street.
IBM is a globally integrated enterprise that targets the intersection of technology and
effective business. The company seeks to be a partner in its clients' success by
enabling their own capacity for distinctive innovation. To help clients achieve growth,
effectiveness, efficiency and the realization of greater value through innovation, IBM
draws upon the world's leading systems, software and services capabilities. The
company's business model is built to support two principal goals: helping clients
succeed in delivering business value by becoming more innovative, efficient and
competitive through the use of business insight and information technology (IT)
solutions; and, providing long-term value to shareholders.
The business model has been developed over time through strategic investments in
capabilities and technologies that have the best long-term growth and profitability
prospects based on the value they deliver to clients. The company's strategy is to focus
on the high-growth, high-value segments of the IT industry. The company's global
capabilities include services, software, hardware, fundamental research and financing.
The broad mix of businesses and capabilities are combined to provide business insight
and solutions for the company's clients. The business model is flexible, and allows for
periodic change and rebalancing. The company has exited commoditizing businesses
like personal computers and hard disk drives, and strengthened its position through
strategic investments and acquisitions in emerging higher value segments like service
oriented architecture (SOA) and Information on Demand. In addition, the company has
transformed itself into a globally integrated enterprise which has improved overall
productivity and is driving investment and participation in the world's fastest growing
markets. The company's major operations comprise a Global Technology Services
segment; a Global Business Services segment; a Systems and Technology segment; a
Software segment; and a Global Financing segment. Global Services is a critical
component of the company's strategy of providing IT infrastructure and business insight
and solutions to clients. While solutions often include industry-leading IBM software and
hardware, other suppliers' products are also used if a client solution requires it.
Contracts for IBM services -commonly referred to as "signings" -can range from
less than one year to over 10 years.
Within Global Services there are two reportable segments: Global Technology Services
and Global Business Services. Global Technology Services (GTS) segment primarily
reflects IT infrastructure services and business process services, delivering value
through the company's global scale, standardization and automation. (This is the
business segment that will establish a new site in Dubuque). Global Business Services
(GBS) segment primarily reflects professional services and application outsourcing
services, delivering business value and innovation to clients through solutions which
leverage industry- and business-process expertise. Systems and Technology segment
provides IBM's clients with business solutions requiring advanced computing power and
storage capabilities. Approximately 55 percent of the Systems and Technology's server
and storage sales transactions are through the company's business partners;
approximately 45 percent are direct to end-user clients, more than 40 percent of which
are through the Internet at ibm.com. In addition, Systems and Technology provides
leading semiconductor technology and products, packaging solutions and engineering
technology services to clients and for IBM's own advanced technology needs. While not
reported as external revenue, systems hardware is also deployed to support services
solutions. Software consists primarily of middleware and operating systems software.
Middleware software enables clients to integrate systems, processes and applications
across a standard software platform. IBM middleware is designed to open standards
which allows the efficient integration of disparate client applications that may have been
built internally, or provided by package software vendors or system integrators.
Operating systems are the software engines that run computers. In addition, Software
includes Product Lifecycle Management software which primarily serves the Industrial
sector.
DISCUSSION
IBM will initially hire 350 employees to begin July 1, 2009, then create an additional 350
positions by September 1, 2009. The Company will add another 600 new positions by the
end of 2010, bringing the total to 1300. The building renovation (in partnership with
Dubuque Initiatives), buildout, and office equipment is estimated at $113,450.
To assist this project, IBM has requested a direct financial assistance package of
$11,700,000 to the company. Also as a portion of the financial package Dubuque Initiatives
will receive a PIAP award from IDED of $450,000 to cover the cost for acquisition of the
building. City assistance as public match for the application is required. A 20-year property
tax rebate on IBM's portion of the building has been offered as local match. The value of
this offer is estimated to be $1,828,068.
RECOMMENDATION
I recommend that the City Council authorize the submission of a State of Iowa financial
assistance package of $11,700,000 to IBM for creating 1,300 new positions within the
community and a $450,000 PIAP award to Dubuque Initiatives for acquisition of the
Roshek Building.
This project is consistent with the City's goals to facilitate job growth in the community,
and increase the number of good paying jobs and further diversify our economic base.
ACTION STEP
The action step for the City Council is to adopt the attached resolution.
attachments
F:IUSERS\Adejong\CEBA\IBM\IBM IDED APP memo.doc
RESoLUTIoN No. 34-09
A RESOLUTION AUTHORIZING THE FILING OF A STATE OF IOWA
FINANCIAL ASSISTANCE APPLICATION ON BEHALF OF IBM
CORPORATION.
Whereas, IBM has proposed locating new operations in Dubuque, Iowa; and
Whereas, the City Council of Dubuque, Iowa has considered said proposal and
has determined that the proposed project will contribute to the local economy through
the creation of 1300 new jobs for area residents; and
Whereas, the Iowa Department of Economic Development has created a
financial assistance package for IBM to locate in Dubuque; and
Whereas, the City of Dubuque, Iowa is eligible to apply for this funding on behalf of
the Company.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
DUBUQUE, IOWA:
Section 1. That the filing of an application for State of Iowa financial assistance
on behalf of IBM Corporation is hereby approved.
Section 2. That the local match of identified in the application consisting of TIF
rebates for increased building valuation estimated at $1;828,068 to the company and a
loan guarantee to Dubuque Initiatives is hereby approved, subject to application approval.
Section 3. That the Mayor is hereby authorized to execute and the City Manager is
hereby directed to submit said application to the Iowa Department of Economic
Development together with such documents as may be required.
Passed, approved,
Attest:
City Clerk
eanne Schneider,
F:\USERSWdejong\CEBA\IBM\Resolution approving IBM application.doc
and adopted this 2nd day of Febr,~~ ry, 2009.
~~`` ,~
Roy D. BI, Mayor
IOWA
Michael L.Tramontina, Director
Iowa Department of Economic Development
Application for Financial Assistance
Section A -Applicant & Project Information
Business Development Division
Iowa Department of Economic Development
200 East Grand Avenue
Des Moines, Iowa 50309
www.iowalifechang nq.com
Updated: December 15, 2008
Instructions
1. All applicants shall complete Section A of the Application for Financial Assistance and attach o~ those section(s) for the
program(s) to which the applicant is applying.
Program Download and Complete
Community Economic Bettermeant Account (CEBA) Section B
Enterprise Zone Program (EZ) Section C
High Quality Job Creation Program (HQJC) Section D
Entrepreneurial Ventures Assistance Program (EVA) Section E
Value Added Agricultural Products & Processes
Financial Assistance Program (VAAPFAP) Section F
Economic Development Set-Aside Program (EDSA) Section G
2. Please visit the IDED Web site, http://www.iowalifechanging.com/applications/bus dev/index.html or contact IDED at (515)
242-4819 to see if this version of the application is still current.
3. Before filling out this application form, please read all applicable sections of the 2007 Iowa Code and Iowa Administrative
Code (rules). http://www.legis.state.ia.us/aspx/ACODocs/ruleList.aspx?pubDate=12-3-2008&agencv=261&chapter--175
4. Only typed orcomputer-generated applications will be accepted and reviewed. Any material change to the format,
questions, or wording of questions presented in this application, will render the application invalid and it will not be
accepted.
5. Complete the applicable sections of the application fully; if questions are left unanswered or required attachments are not
submitted, an explanation must be included.
6. Use clear and concise language. Attachments should only be used when requested or as supporting documentation.
7. Any inaccurate information of a significant nature may disqualify the application from consideration.
8. Upon completion of the application, please submit the following to the Business Finance Team at IDED:
• The original, signed application form and all required attachments
• One copy of the application form and all required attachments from which additional copies can easily be made.
If electronic copies of the application and required attachments are available, please a-mail these documents to
businessfinance(a.iowalifechanging.com in addition to submitting the original plus one copy.
Business Finance Team
Iowa Department of Economic Development
200 East Grand Avenue
Des Moines IA 50309
Application Due Dates
IDED Board Meetin A lication Due Date
Janua 15, 2009 December 22, 2008
Februa 19, 2009 Janua 26,2009
March 19, 2009 Februa 23, 2009
A ril 16, 2009 March 23, 2009
Ma 21, 2009 Aril 27, 2009
June 18, 2009 Ma 26, 2009
Jul 16, 2009 June 22, 2009
Au ust 20, 2009 Jul 27, 2009
Se tember 17, 2009 Au ust 24, 2009
October 15, 2009 Se tember 21, 2009
November 19, 2009 October 26, 2009
December 17, 2009 November 23, 2009
Section A -Applicant & Project Information
Public Records Policies
Information Submitted to IDED. The Iowa Department of Economic Development (IDED) is subject to the Open Records law
(Iowa Code, Chapter 22). Treatment of information submitted to IDED in this application is governed by the provisions of the
Open Records law. All public records are available for public inspection. Some public records are considered confidential and
will not be disclosed to the public unless ordered by a court, the lawful custodian of the record, or by another person duly
authorized to release the information.
Confidential Records. IDED automatically treats the following records as confidential and they are withheld from public
disclosure:
• Tax Records
• Quarterly Iowa Employer's Contribution and Payroll Report prepared for the Iowa Workforce Development Department
• Payroll Registers
• Business Financial Statements and Projections
• Personal Financial Statements
Other information supplied to IDED as part of this application may be treated as confidential under Iowa Code section 22.7.
Following are the classifications of records which are recognized as confidential under Iowa law and which are most frequently
applicable to business information submitted to IDED:
• Trade secrets [Iowa Code §22.7(3)]
• Reports to governmental agencies which, if released, would give advantage to competitors and serve no public purpose.
[Iowa Code §22.7(6)]
• Information on an industrial prospect with which the IDED is currently negotiating. [Iowa Code §22.7(8)]
• Communications not required by law, rule or regulation made to IDED by persons outside the government to the extent that
IDED could reasonably believe that those persons would be discouraged from making them to the Department if they were
made available for general public examination. [Iowa Code §22.7(18)]
Any requests for confidentiality beyond the items listed above may cause your application to be put on hold until
those requests are resolved.
Information supplied to IDED as part of this application that is material to the application andlor the state program to
which the applicant is applying including, but not limited to the number and type of jobs to be created, wages for those
jobs, employee benefit information, and project budget, are considered open records and will not be treated as
confidential.
Additional Information Available. Copies of Iowa's Open Record law and IDED's administrative rules relating to public
records are available from the Department upon request.
Section A -Applicant & Project Information
Applicant Information
1. Name of Business: IBM Corporation
Address: 1 New Orchard Road
City, State & Zip Code: Armonk, NY 10504-1722
Contact Person: Terry L. Hansen Title: Manager of Public Partnerships
Phone: 202-515-4384 Fax: 202-515-5906 Email: thansen@us.ibm.com
2. SIC or NAICS Code: 5045
3. Federal ID Number: 13-0871985 State of Incorporation: New York
Does the Business file a consolidated tax return under a different tax ID number? ^ Yes
If yes, please also provide that tax ID number:
4.
5.
Is the contact person listed above authorized to obligate the Business? ^ Yes
If no, please provide the name and title of a company officer authorized to obligate the Business:
Ms. Joanne Collins-Smee, General Manager, Integrated Technology Delivery
X^ No
X^No
If the application was prepared by someone other than the contact person listed above, please complete the following:
Name: Title:
Organization:
Address:
City, State, & ZIP Code:
Phone: Fax: Email:
Sponsor Information
Please review the following table to determine who needs to sponsor this application. Depending on the programs being
applied for, more than one sponsor may be necessary.
Pro ram Acce table Sponsor
CEBA Cit or Count or Communi Colle a in which the Project Site is Located
EZ Local Enter rise Zone Commission
HQJC Cit or Count in which the Project Site is Located
EVA City or County in which the Project Site is Located; John Pappajohn Entrepreneurial Center; a Small Business
Develo ment Center; Business Accelerator; or an a uivalent or anization reco nized b the IDED
VAAPFAP Ci or Coun in which the Project Site is Located or Local Develo ment Enti
EDSA Cit or Coun in which the Project Site is Located
Sponsor Organization: City of Dubuque, Iowa
Official Contact (e.g. Mayor, Chairperson, etc.): Roy D. Buol Title: Mayor
Address: 50 W. 13th St.
City, State & ZIP Code: Dubuque, IA 52001
Phone: 563.589.4110 Fax: 563.5894149 E-mail: rdbuol@cityofdubuque.org
If IDED needs to contact the sponsor organization with questions, should we contact the person listed above?
^ Yes ® No, please contact the following person:
Address: 50 W. 13th St.
City, State & ZIP Code: Dubuque, IA 52001
Phone: 563.589.4393 Fax: 563.589.1733 E-mail: dheiar@cityofdubuque.org
Name: Dave Heiar Title: Economic Development Director
If necessary, please list information on additional sponsors in an attachment.
Section A -Applicant & Project Information
Certification & Release of Information
I hereby give permission to the Iowa Department of Economic Development (IDED) to research the Business' history, make
credit checks, contact the Business' financial institutions, insurance carriers, and perform other related activities for the sole
purpose of confirming information provided by the Business and that is necessary for reasonable evaluation of this application. I
also hereby authorize the Iowa Department of Revenue to provide to IDED state tax information pertinent to the Business' state
income tax, sales and use tax, and state tax credits claimed.
I understand that all information submitted to IDED related to this application is subject to Iowa's Open Record Law (Iowa Code,
Chapter 22).
I understand this application is subject to final approval by IDED and the Project may not be initiated until final approval is
secured. (High Quality Job Creation Program applications may be submitted up to 12 months following the completion of the
project.)
I understand that IDED reserves the right to negotiate the financial assistance. Furthermore, I am aware that financial
assistance is not available until an agreement is executed within a reasonable time period following approval.
I hereby certify that, to the best of my knowledge, all representations, warranties, or statements made or furnished to IDED in
connection with this application are true and correct in all material respect. I understand that it is a criminal violation under Iowa
law to engage in deception and knowingly make, or cause to be made, directly or indirectly, a false statement in writing for the
purpose of procuring economic development assistance from a state agency or subdivision.
For the Business:
Signature
Date
Joanne Collins-Smee General Mana er Inte rated Technolo Delive
Name and Title (typed or printed)
For the ons lr(s): ,
Signature, ,;Ee~ x Dates
Roy D. Buol, Mayor
Name and Title (typed or printed)
Please use the following if more than one sponsor is required. (For example, use this if a signature from the local Enterprise
Zone Commission is required in addition to the signature from the Mayor of the sponsoring city.)
Signature Date
Name and Title (typed or printed)
IDED will not provide assistance in situations where it is determined that any representation, warranty, or statement made in
connection with this application is incorrect, false, misleading or erroneous in any material respect. If assistance has already
been provided prior to discovery of the incorrect, false, or misleading representation, IDED may initiate legal action to recover
incentives and assistance awarded to the Business.
Section A -Applicant & Project Information
Project Information
Provide a brief description and history of the Business. Include information about the Business' products or services
and its markets and/or customers.
IBM is a globally integrated enterprise that targets the intersection of technology and effective business. The company seeks to
be a partner in its clients' success by enabling their own capacity for distinctive innovation. To help clients achieve growth,
effectiveness, efficiency and the realization of greater value through innovation, IBM draws upon the world's leading systems,
software and services capabilities. The company's business model is built to support two principal goals: helping clients
succeed in delivering business value by becoming more innovative, efficient and competitive through the use of business insight
and information technology (IT) solutions; and, providing long-term value to shareholders. The business model has been
developed over time through strategic investments in capabilities and technologies that have the best long-term growth and
profitability prospects based on the value they deliver to clients. The company's strategy is to focus on the high-growth, high-
valuesegments of the IT industry. The company's global capabilities include services, software, hardware, fundamental
research and financing. The broad mix of businesses and capabilities are combined to provide business insight and solutions for
the company's clients. The business model is flexible, and allows for periodic change and rebalancing. The company has exited
commoditizing businesses like personal computers and hard disk drives, and strengthened its position through strategic
investments and acquisitions in emerging higher value segments like service oriented architecture (SOA) and Information on
Demand. In addition, the company has transformed itself into a globally integrated enterprise which has improved overall
productivity and is driving investment and participation in the world's fastest growing markets. The company's major operations
comprise a Global Technology Services segment; a Global Business Services segment; a Systems and Technology
segment; a Software segment; and a Global Financing segment. Global Services is a critical component of the company's
strategy of providing IT infrastructure and business insight and solutions to clients. While solutions often include industry-leading
IBM software and hardware, other suppliers' products are also used if a client solution requires it. Contracts for IBM services -
commonly referred to as °signings" -can range from less than one year to over 10 years. Within Global Services there are two
reportable segments: Global Technology Services and Global Business Services. Global Technology Services (GTS)
segment primarily reflects IT infrastructure services and business process services, delivering value through the company's
global scale, standardization and automation. (This is the business segment that will establish a new site in Dubuque).
Global Business Services (GBS) segment primarily reflects professional services and application outsourcing services,
delivering business value and innovation to clients through solutions which leverage industry- and business-process expertise.
Systems and Technology segment provides IBM's clients with business solutions requiring advanced computing power and
storage capabilities. Approximately 55 percent of the Systems and Technology's server and storage sales transactions are
through the company's business partners; approximately 45 percent are direct to end-user clients, more than 40 percent of
which are through the Internet at ibm.com. In addition, Systems and Technology provides leading semiconductor technology
and products, packaging solutions and engineering technology services to clients and for IBM's own advanced technology
needs. While not reported as external revenue, systems hardware is also deployed to support services solutions. Software
consists primarily of middleware and operating systems software. Middleware software enables clients to integrate systems,
processes and applications across a standard software platform. IBM middleware is designed to open standards which allows
the efficient integration of disparate client applications that may have been built internally, or provided by package software
vendors or system integrators. Operating systems are the software engines that run computers. In addition, Software includes
Product Lifecycle Management software which primarily serves the Industrial sector.
Business Structure:
^ Cooperative X Corporation ^ Limited Liability Company ^ Not for Profit
^ Partnership ^ S-Corporation ^ Sole Proprietorship
State of Incorporation: New York
3. Identify the Business' owners.
Section A -Applicant & Project Information
Does a woman, minority, or person with a disability own over 50% of the Business? ^ Yes X^ No
If yes, is the business certified as a Targeted Small Business? ^ Yes X^ No
List the Business' Iowa Locations and the Current Number of Employees at each Location.
Des Moines 146 (as of 12/31/08)
5. What is the Business' worldwide employment? (Please include employees of parent company, subsidiaries, and other
affiliated entities in this figure.)
IBM has approximately 380,000 total employees worldwide.
6. Briefly describe the proposed project for which assistance is being sought. (Include project timeline with dates, facility
size, infrastructure improvements, proposed products/services, any new markets, etc.)
7.
IBM GTS plans to open a new facility which will provide IT services to US clients who have outsourcing agreements
with IBM. The site would house a data center providing IT systems management and operations, database
management, and overall IT project management. We plan on opening the facility the spring of 2009 and anticipate
having 650 employees hired by the end of 2009. IBM plans to hire the remaining 650+ employees by the end of 2010,
however our preference would be to accelerate this schedule if possible.
Project Address (Street Address, City, and County): 700 Locust St. Dubuque, Dubuque County
Type of Business Project:
^ Startup ^ Expansion of Iowa Company ®New Location in Iowa
^ Relocation from another State
9. Please identify the management at the project location and his/her/their experience.
- A senior IBM executive will be named shortly to manage the new facility. In addition, we plan on transferring
in approximately 130 existing IBM employees (management and non-management) to the new location.
10
Has any part of the project started? ^ Yes ®No
If yes, please explain.
Section A -Applicant & Project Information
11 Project Budget:
AMOUNT BUDGETED
Use of Funds Cost Source A Source B Source C
Land Acquisition $ $ $ $
Site Preparation $ $ $ $
Building Acquisition $450,000 $ $ $
Building Construction $ $ $ $
Building Remodeling $38,000,000 $ $ $
Mfg, Machinery & Equip. $ $ $ $
Other Machinery & Equip. $ $ $ $
Racking, Shelving, etc. $ $ $ $
Computer Hardware $ $ $ $
Computer Software $ $ $ $
_
Furniture & Fixtures $ $ $ $
Working Capital $75,000,000 $ $ $
Research & Development $ $ $ $
Job Training $ $ $ $
$ $ $ $
$ $ $ $
_
TOTAL $113,450,000 $ $ $
~ Racking, Shelving and Conveyor Equipment used in Wareh ouse or Distributio n Center Projects
Source D Source E Source F Source G Source H
$ $ $ $ $
$ $ $ $ $
$ $ $450000 $ $
$ $ $ $ $
$6500000 $ $31500000 $ $
$ $ $ $ $
$ $ $ $ $
$ $ $ $ $
$ $ $ $ $
$ $ $ $ $
$ $ $ $ $
$75.000,000 $ $ $ $
$ $ $ $ $
$ $ $ $ $
$ $ $ $ $
$ $ $ $ $
$81,500,000 $ 31950000 $ $
Does the Business plan to lease the facility? X^ Yes^ No If yes, please provide the Annual Base Rent Payment (lease payment minus property taxes, insurance, and
operating/maintenance expenses) and the length of the lease agreement.
PROPOSED FINANCING
Source of Funds Amount Form of Funds Rate Term Conditions 1 Additional Information
(List tax benefits separately; not (Loan, Grant, In-Kind Donation, etc.) Include when funds will be disbursed; if loan, whether
as a source of funds.) payments are a level term, balloon, etc.
Source A: IDED $11,700,000
Source B: Other State (e.g. $
Community College, DOT, etc.l
Source C: Local Government $
Source D: Business $81,500,000
Source E: Other Private Sources $
Source F: IDED PIAP $450,000 PIAP Award to Landlord For Purchase of Building .
Source G: Landlord $31,500,000 Loan guaranteed by City 5.5% 15 years Dubuque Initiatives will be applying for Federal and State
Historic Tax Credits and New Markets Tax Credits to offset
a portion of this loan.
Source H: $
TOTAL $125,150,000
Please list below any tax benefits (e.g. Investment Tax Credit, Sales Tax Refund, R&D Tax Credit, New Jobs Tax Credit, Property Tax ExemptionlAbatement, etc.) that the
Business expects to receive and included the estimated value of each tax benefit:
Section A -Applicant & Project Information 8
12. Employee Benefits: Please identify all employee benefits provided by and paid for (in full or in part) by the Business.
Employee Benefits Total Annual Cost Portion of Total
Provided by the (show on a per Annual Cost Paid by
Business employee basis) the Business*
Employee Family Employee Family
$9,724 $11,915 $7,205 $8,938
Medical/Health average/ average/ average/ average/
Insurance capita capita capita capita
Including Including Including Including
Dentallnsurance dental. dental. dental. dental.
Vision Insurance
I Life Insurance
$404
Short Term Disability average
(STD) for 2008
$539
Long Term Disability average
(LTD) for 2008
Plan Provisions
(Include deductibles, coinsurance %, office visit
co-payments, annual out-of-pocket maximums,
face amounts, etc.)
during the past three years and then, determine the business' average annual contribution per employee for that three year period.
Does the Business offer a pension plan, 401(k) plan, and/or retirement plan? X^ Yes
If pension plan:
Average annual benefit per employee: N/A
If 401(k) Plan:
Company match offered as a percentage of salary: 5%
Average annual match paid as a percentage of salary: 3%
If other retirement plans:
Type of plan: N/A
Average annual benefit per employee: N/A
^ No
Does the Business offer aprofit-sharing plan? X^ Yes ^ No
If yes, please indicate the total amount paid out each year for the past three year and then, determine the average annual bonus or
contribution per employee for that three year period.
Averages 5%, but outstanding employees can achieve more.
Does the Business offer child care services?
^ Yes X^ No
rage
Section A -Applicant & Project Information 10
13. Identify the Business' competitors. If any of these competitors have Iowa locations, please explain the nature of the
competition (e.g. competitive business segment, estimated market share, etc.) and explain what impact the proposed
project may have on the Iowa competitor. IBM does business in over 170 countries around the world. It has literally
thousands of competitors in the areas of hardware manufacturing, software development, and service providers. Many
of these firms have offices or operations in Iowa.
14. Will any of the current Iowa employees lose their jobs if this project does not proceed in Iowa?
^ Yes ® No
If yes, please explain why and identify those jobs as "retained jobs" in the following question.
Section A -Applicant & Project Information
15. List the jobs that will be retained and/or created as the result of this project. (A retained job is an existing job that
would be eliminated or moved to another state if the project does not proceed in Iowa.) For retained jobs, include the current
hourly wage rate. For jobs to be created, including the starting hourly wage rate.
Job Title Skills, Education, or Experience
Required Number of
Jobs Retained (R) or
Created C Average Starting
Salaries*
Year 1 of the Project
S stems Anal st 1 ear ex rience 285 C $32,500
S stems Administrator 1 ear ex erience 140 C $33,500
S stems Administrator 3 ears ex erience 75 C $37,400
Technical Su rt S cialist 3 ears ex erience 47 C $39,300
Com uter Securit Coordinator 2 ears ex erience 3 C $34,700
Qualit Assurance Anal st 2 ears ex rience 25 C $35.800
15t Line Mana ers 3+ ears ex erience 50 C $71,000
2"a Line Mana ers 5+ ears ex rience 25 C $90,000
Year 1 Subtotal 650 Y ~~.~ ~ ~`~~~.f'.-,~~~~~~~~. `.~ y.`" -~
Year 2 of the Project
S stems Anal st 1 ear ex erience 285 C $33,500
S stems Administrator 1 ear ex erience 140 C $34,500
S stems Administrator 3 ears ex rience 75 C $38,500
Technical Su ort S cialist 3 ears ex rience 47 C $40,500
Com uter Securit Coordinator 2 ears ex erience 3 C $36,900
Qualit Assurance Anal st 2 ears ex erience 25 C $36,900
1ST Line Mana ers 3+ ears ex rience 50 C $73,100
2"d Line Mana ers 5+ ears ex rience 25 C $92,700
Year 2 Subtotal 650 -
Year 3 of the Project
Year 3 Subtotal ~': ~ ' - w 4•= ~<:;~ ~~'
Total Number of Retained Jobs: 0
Total Number of Created Jobs: 1300
* It should be noted however that the average non-exempt employee will average 6 hours or 15% overtime per week.
Section A -Applicant & Project Information 12
16. Discuss each of the following items with respect to the proposed project:
a) the current employment conditions in the community, include any business closures, unemployment rates, etc.
and if applicable, the community's need for assistance in attracting the Business.
The Dubuque area has seen a significant reduction of job opportunities in the area in recent months due to the national
economic slowdown. A recent poll was conducted by the Greater Dubuque Development Corporation from November
13 -November 19 and the results showed that 38% of companies anticipate to layoff employees within the next 180
days. The area has already started to see this happen with several large employers trimming back employment to
battle this economic slowdown. The following, as provided by Greater Dubuque Development Corporation, is a list of
employers in the area that have begun the process of layoffs:
-John Deere -Eagle Window and Door -McGraw-Hill
-McKesson - Namasco - Flexsteel
- Klauer Manufacturing -Cascade Manufacturing -Georgia Pacific
- Quebecor -Rite-Hite -Truck Country
b) impact of the proposed project on the community and the state, include projections that reflect the impact on local
and state tax revenue and any additional costs the community will incur as the result of the proposed project;
The project is estimated to bring 1300 Information Technology positions to the state with a total payroll of over
$50,000,000. These employees will pay state income taxes, property taxes, and sales taxes. The taxable valuation of
the building is estimated to increase $3,000,000 initially, creating new property taxes in the City.
c) impact the proposed project will have on current employees, including the potential for increased skills and wages;
and
Current employees in the region will have access to competitively paying jobs that encourage further education. These
positions will all earn above the County average wage, thus increasing the quality of life for the area's citizens.
d) impact the investment will have on the ability of the business to expand, upgrade, or modernize its capabilities.
The building will have additional available space for the Company to expand at this location. Should more additional
space be needed, there are several large buildings in the vicinity available for redevelopment.
17. Is the Business actively considering locations outside of Iowa? ®Yes ^ No
If yes, where and what assistance is being offered?
Other global locations were part of the original analysis before considering a U.S. location. Ultimately the Company
narrowed the selection process to 6 sites including:
• West Virginia
• Missouri
• Wyoming
• Indiana
• South Carolina
• Dubuque, Iowa
18. There are three general justifiable reasons for assistance. Check the box next to the reason why assistance is needed
to complete this project
^ Financing Gap -The Business can only raise a portion of the debt and equity necessary to complete the
project. A gap between sources and uses exists and state and/or federal funds are needed to fill the gap.
^ Rate of Return Gap -The Business can raise sufficient debt and equity to complete the project, but the
returns are inadequate to motivate an "economic person" to proceed with the project. Project risks outweigh the
rewards.
Section A -Applicant & Project Information 13
® Locational Disadvantage (Incentive) -The Business is deciding between a site in Iowa (site A) and a site in
another state (site B) for its project. The Business argues that the project will cost less at site B and will require a
subsidy to equalize costs in order to locate at site A. The objective here is to quantify the cost differential between site
A and site B.
19.
20.
What measures were analyzed to determine the amount and form of assistance needed?
The total incentive package and workforce availability were significant factors in the Company's decision. The City
along with Dubuque Initiatives have proposed a local incentive package which includes a 20 year TIF rebate, $100,000
per year for three years to provide extra recruitment efforts dedicated to IBM, and a below market rate rental for the
Company.
What amount of state assistance is requested based on the above-identified need? $9,000/job X 1300 =
$11,700,000
450 000 Building Cost
$12,150,000 Total
What type/form of assistance is preferred (e.g. loans, forgivable loans, tax incentives, etc.)?
Forgivable Loans
Please indicate what program(s) the Business is applying to and download and submit those applicable sections:
® CEBA (PIAP) (Complete Section B)
^ EZ (Complete Section C)
^ HQJC (Complete Section D)
^ EVA (Complete Section E}
^ VAAPFAP (Complete Section F)
^ EDSA (Complete Section G)
The Department reserves the right to review this application and determine, based on the proposed project and available
program funds, which financial assistance program(s) is best suited for the Business' project. The acfua! program(s) utilized
may vary from the programs indicated above.
Section A -Applicant & Project Information 14
21. Fiscal Impact Ratio Information -Business Taxes
IDED is required to calculate the fiscal impact on state and local government investments in this project. Data from other parts
of the application will be combined w-th the estimates requested below to calculate the required return on investment
information.
Instructions for Question 21
- IDED is asking for a best estimate on the increase in taxes associated with this project.
- Estimates should only include the expected increase in tax liability resulting from this project.
- At minimum, IDED needs estimates for the first three years of the project.
- Show data as if no tax abatements or tax credits awarded for this groiect were taken.
- For partnership forms of ownership (e.g. limited partnerships, s-corporations, LLC, etc.), please estimate the
partners' increase in Iowa tax liability due to this project.
- Sales and use taxes refer to the taxes paid on materials, etc. that the Business purchases, not taxes you
collect from sales to your customers.
- Applicants will not be held to these numbers with respect to any award from or contract with IDED.
- This page of the application will automatically be treated as confidential.
Increase in Tax Collections Associated with this Project
State Business Taxes Year 1 Year 2 Year 3 Year 4 Year 5
State Corporate Income Tax* $0** $0** $0** $0** $0**
State Business Sales and Use Tax $225,000 $225,000 $20,000 $21,000 $22,000
* Insurance Companies: Provide State Insurance Premium Tax
Local Business Taxes Year 1 Year 2 Year 3 Year 4 Year 5
Local Real Estate Property Tax $ $16,592 $33,136 $114,552 $114,552
Local Option Sales Tax $33,750 $33,750 $3,000 $3,150 $3,300
**The fact that Iowa uses a market based approach to sourcing revenue, i.e. focus is on location of customer, and
the fact that we feel this project will largely focus on serving customer outside the state, strongly suggests that this
project will not increase IBM's tax liability in the State.
Section A -Applicant & Project Information 15
Attachments
Please attach the following documents:
Al Business Plan
At a minimum, include:
• marketing study,
• feasibility study,
• projected profit and loss statements for three years into the future,
• project budget,
• production operations,
• management structure,
• personnel needs,
• descriptions of product or process,
• status of product/processdeve/opment, and
• patent status (if applicable).
(Any information outlined above not included in the business plan should be submitted as supplemental information via
a separate attachment.)
A2 Copies of the Business' Quarterly Iowa Employer's Contribution and Payroll Report Summary Page (Page 1) for the
past year and a copy of the most recent payroll report for one pay period. The copy of the most recent payroll report
for one pay period must be in Excel format and include the following information:
• company name, date of payroll and source of payroll information
• employee name and/or employee identification number
• current hourly wage - do not include bonuses or other benefit values
• indicate if the employee is full time (40 hours per week, 52 weeks per year) or part time.
A sample Excel spreadsheet can be found at
http://www.iowalifechanaing.com/applications/bus devlpayroll template.xls
A3 Affidavit that states the Business has not, within the last five years, violated state or federal statutes, rules, and
regulations, including environmental and worker safety regulations, or, if such violations have occurred, that there were
mitigating circumstances or such violations did not seriously affect public health or safety or the environment. A
sample affidavit can be found at http://www.iowalifechanging.com/applications/bus dev/sampleaffidavit.doc.
A4 Financial Information (Existing Businesses Only)
• Profit and loss statements and balance sheets for past three year-ends;
• Current YTD profit and loss statement and balance sheet;
• Schedule of aged accounts receivable;
• Schedule of aged accounts payable; and
• Schedule of other debts.
See IBM Annual report: http://www.ibm.com/annualreporti
Application Checklist
Section A -Applicant & Project Information 16
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Application Checklist
For each section the Business is required to submit, please indicate with a `/' that items needed for that section are included when submitting the application to IDED.
If an item listed is not included, please indicate in the corresponding box the date on which IDED can expect to receive it or explain in the space provided below why it has
not been included:
Section A Section B Section C Section D Section E Section F Section G
CEBA EZ HCJC EVA VAAPFAP EDSA
Original plus 1 Copy
Wined by the Business
Signed by the Sponsor(s)
Business Plan w/ 3-year Projections
Quarterly Employer's Contribution and Payroll Reports
Current Payroll Report
Affidavit re: Violations
P/L statements & Balance Sheets (3 years)
Current YTD Financials
Aged Accounts Receivables
Aged Accounts Payable
Schedule of Other Debts
Resolution from Sponsor
Legal Description of Project Site
Map
Meeting /Public Hearing Notice
Meeting Minutes
Technical Assistance Budget
Bids, Quotes, & Estimates
Employer Certification Form
Commitment Letters
Comm. Development & Housing Needs Assessment
Assurances Page
Applicant/Recipient Disclosure/Update form
Explanation for Items Not Included:
F:IUSERS1AdejonglCEBAlIBM11DED application Section A.doc
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Application Checklist
IOWA
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Which program component is the Business applying for?
^ Small Business Gap Financing
® New Business Opportunity
^ New Product Development
^ Modernization Component
2. Funding Information:
Total Amount Requested: $12,150,000
Loan Amount: $
Forgivable Loan Amount: $12,150,000
Section B -CEBA
See Chapter 53, Section 261 in the CEBA Administrative Rules for maximum funding amounts. The CEBA program is
not designed to provide 100 % funding for any project and limits assistance based on the type of projecf submitted.
3. Security:
^ Corporate Guaranty ^
^ UCC Financing Statement ^
^ Irrevocable Letter of Credit ^
^ Personal Guarantee
All awards secured by Personal Guarantees will requi~
guarantors, which must be attached fo the application.
Surety Bonds
Mortgage on Real Estate
Escrow Account
Other: -Request a waiver
e a current financial statement from each of the personal
4. Does the business certify that at least 10% of the positions to be created will be made available to qualified Promise
Job Participants? ®Yes ^ No (posted on IWD website)
5. Are underground tanks (whether or not in current use) for the storage of petroleum products, agricultural or other
chemicals, waste oil or other liquid waste or any other inflammable, corrosive, reactive or explosive liquid or gas
located on the project site?
^ Yes ®No If yes, please explain:
Will the Business be storing above-ground, on or about the project site, in tanks or otherwise, any liquid or gas (as
described above) or any inflammable, corrosive, reactive or explosive solid, for any length of time or any purpose?
^ Yes ®No If yes, please specify:
Will the Business be treating, transporting or disposing of any liquid, gas, or solid (described above) either on or about
the project site or at a landfill or other treatment facility or upon any public street or highway, or on any waterway or
body of water, or in any aircraft?
^ Yes ® No
If yes, please specify the substance and what the Business will be doing with it.
Section B -CEBA 12/21/2006
6. Does the Business generate solid or hazardous waste? X Yes ^ No
If yes, please describe and provide a copy of the Business' solid and hazardous waste reduction plans.
When we move in we will develop a Solid Waste Manage Plan (SWMP) similar to the Westchester Plan which is
attached. Once IBM has the opecifics i.e. population, quantities of waste, etc we can write you a plan that meets
the requirements of the area. - scan.pdf
Does the project include the initial construction of any building or facility? ^ Yes ®No
If yes, does the local jurisdiction have a local building code in place which it enforces through a system of plan reviews
and inspections? ®Yes ^ No
This is a major rehabilitation of an existing building
Attachments
Please attach the following documents:
63 Community resolution authorizing the submission of the application
F:IUSERS1AdejonglCEBA11BM11DED Application Section B.doc
Section B - CEBA 12/21/2006