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World leader in wind energy considers West Branch for $22 million investment
by Rob Poggenklass · News · February 14, 2007
Acciona Energía hopes to have first North America operation up and running by November; VP says company is "very interested" in Sauer-Danfoss site
A Spanish wind turbine manufacturing company, the world’s largest developer and constructor of wind parks, is considering the Sauer-Danfoss building in the West Branch industrial park as the site of its first assembly plant in North America.
Acciona Energy North America Corporation (AENAC), a wholly-owned subsidiary of Acciona Energía, has narrowed its prospects for a new manufacturing facility to West Branch and a site in northern Illinois.
The courting of Acciona had been kept tightly under wraps but was made public Monday night, when the West Branch City Council voted to offer the company the incentives it had sought. Acciona has been working with the City of West Branch, the Iowa Department of Economic Development, the Cedar County Economic Development Commission and the Iowa City Area Development (ICAD) Group. All but IDED was represented Monday night.
Acciona would make a $22 million capital investment at the Sauer-Danfoss site, where the company — if it chooses West Branch — would hope to be producing wind turbines by November.
“We’re very interested in West Branch,” said Adrian LaTrace, AENAC’s vice president of manufacturing, speaking to the West Branch City Council Monday night at the fire station. “Your location is very good.”
Acciona Energía manufactures its own wind turbines, develops and constructs wind projects and is a long-term owner-operator of wind projects globally. The company has two assembly plants in Spain and a third in China, but has not yet expanded to the western hemisphere.
“This would be an organic resource for us to produce wind turbines in North America,” said LaTrace, whose AENAC office is based in Chicago.
Over the course of three years, Acciona expects to hire about 110 new employees for its North America assembly plant. LaTrace said the workers would be “more broadly skilled” than those in traditional manufacturing jobs — able to perform a number of tasks.
A release from ICAD said that the expected Acciona payroll at the facility would exceed $3.6 million annually. LaTrace said his company offers quality benefits, which are not included in the $3.6 million figure. He said the West Branch operation would be “thin on management” because of the skilled workforce.
Still, the assembly plant’s operations are expected to make little negative impact on the surrounding environment.
“Essentially we’re just bolting things together,” LaTrace said.
Acciona would have to expand the Sauer-Danfoss building to produce its 1.5 megawatt wind turbines. LaTrace said the company would construct an addition that would be “built around a crane” which needs a 30-foot operating clearance.
City officials welcomed the Acciona representatives with open arms, and said the project would complement perfectly the current expansion under way by Cincinnati-based Procter & Gamble.
“This is a perfect project for all of us,” said council member Mark Worrell. “This is one of the best things that’s happened in West Branch in a long time, on top of P&G.”
Acciona asked the city for $2 million in tax relief for the new construction. The tax breaks do not include the existing Sauer-Danfoss building, which is assessed at about $4 million.
The city council on Monday passed two resolutions, both by 4-0 votes: one creating a Community Economic Betterment Account of $850,000; and a second authorizing a High Quality Job Creation program. These are forgivable loans through the state.
The Iowa Economic Development Board has awarded a $2 million float loan and $500,000 investment from the Community Economic Betterment Account (CEBA), plus $350,000 from the Physical Infrastructure Assistance Program (PIAP), for a total of $2.85 million in state incentives.
Under a separate $2 million Tax Increment Financing rebate arrangement with the city, Acciona would receive the bulk of its tax relief in the last four years of an eight-year deal. In year one, the city portion of taxes paid by Acciona would be $43,560. That number would steadily decline until year eight, when the city would receive $8,712.
Over the initial eight years, Acciona would pay a total of $199,287 in new tax dollars to the city, and $603,900 to all taxing authorities, which include the West Branch Community School District and Cedar County.
Those figures are in addition to the taxes the company would pay on the existing Sauer-Danfoss building, which is not included in the abatement.
Acciona is also working with the IDED for incentives through the Iowa Values Fund, and has spoken with the University of Iowa and Kirkwood Community College about possible training programs in renewable energy.
In his presentation to the council, LaTrace praised Iowa as a leader in renewable energy, and as a great natural resource for wind energy. He said Iowa is third among states in wind production, behind only California and Texas. Iowa leads the nation in per capita wind energy production.
LaTrace said that Acciona has not yet entered into any definitive agreement with Sauer-Danfoss, the hydraulics producer that operated in West Branch from 1997 to March 2003, and which still owns the building in the industrial park.
“We still have due diligence to do,” said LaTrace. “We’re still crossing ‘t’s and dotting ‘i’s.”
LaTrace said his company was very interested in the opportunities that the 36-acre Sauer-Danfoss site has to offer.
Council member Howard Moss said he and other city officials received criticism when the city agreed to install infrastructure at the site when Sauer-Sundstrand came to town. On Monday night, he asked LaTrace if the existence of the infrastructure had played a role in Acciona’s interest in the site.
“Absolutely,” said Victor Thompson, AENAC’s director of engineering, who would oversee the construction later this year.
LaTrace said the presence of the infrastructure definitely factored into the company’s consideration of West Branch, because it shortens the time Acciona would need to get its North America operations running.
If the project goes forward in West Branch, Acciona would build at least one and perhaps two of its wind turbines on site, mostly to serve as a landmark. The turbines have propellers that measure between 77 and 82 meters — roughly 250 to 270 feet — in diameter.
Acciona markets itself as a global pioneer in natural resources sustainability, doing business in infrastructure development and management, eco-efficient real estate projects, transportation, urban and environmental services and renewable energy technologies.
Annually, the company produces about 1,100 wind turbines at its factories in Spain and China. The proposed North America facility would produce about 400 new wind turbines a year.
Acciona currently has a contract to produce 120 wind turbines for a project in North and South Dakota this summer, which would produce 180 megawatts of power. To put that figure in perspective, Moss said the entire University of Iowa requires about 42 megawatts, or less than a fourth of what the Dakota wind park will produce.
Thompson said many of the wind turbines for the Dakota project will be produced by Acciona’s European factories, while others will have to be purchased from other companies. Asked if Acciona anticipates more such projects, Thompson said yes, and that the company could be looking at building a second North America assembly plant in three to four years.
The wind turbines are constructed in two parts: the cell and the hub. When finished, LaTrace said the turbines weigh 50 metric tons, very near the 155,000-pound capacity allowed on U.S. roads.
Transporting the turbines requires a nine-axle truck. As a result, Acciona has examined the Interstate 80 overpass. LaTrace expressed some concern about the turn that a truck headed north on Baker Avenue would need to make to go west on I-80. City officials said that West Branch is currently waiting on a two-year study by the Iowa Department of Transportation, which may provide recommendations for improvements to the West Branch exit, No. 254.
Council members asked about the impact on traffic, especially in light of the P&G Distribution Center, which is located across the street from Sauer-Danfoss. LaTrace said that outgoing shipments would be limited to roughly 400 wind turbines per year, on the nine-axle trucks. Ingoing shipments would create more traffic, but he said “not near the volume of P&G.”
The special city council meeting with the wind energy company was temporarily interrupted at Town Hall, when, of all things, a power outage struck West Branch at about 6:35 p.m. After several jokes about the need for wind power, the meeting was moved to the fire station, where Fire Chief Dick Stoolman provided light with a high-powered lamp.
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