Iowa to award incentives to tornado-battered Vermeer and Lennox companies

Kevin Hardy | The Des Moines Register

Show Caption Hide Caption Marshalltown businesses fighting for their livelihood Marshalltown business owners are fighting for their livelihoods after a tornado ravaged the downtown area this summer

Iowa likely will award economic development incentives to Vermeer Corp. and Lennox International after their factories were battered by tornadoes over the summer.

Debi Durham, director of the Iowa Economic Development Authority, told board members this month that state law allows the agency to waive some rules regarding its incentive programs in the case of a natural disaster.

The July 19 tornadoes severely damaged several buildings at Vermeer, which manufactures agricultural and construction equipment outside of Pella, and Lennox, which makes air conditioning and heating units in Marshalltown.

Both Vermeer and Lennox previously have committed to rebuilding their facilities and maintaining their respective workforces.

Durham said the economic development agency is waiting to assess the gaps between insurance claim settlements and the actual cost to rebuild. Even then, the state won't cover the entire void.

"We don't have the resources to say we're going to make you whole," she told the Des Moines Register. "It's just enough to offset."

Durham said the agency can provide financial assistance through its High Quality Jobs program. Emergency provisions allow officials to waive requirements for local matches, offer higher-than-normal awards and provide incentives for the numbers of jobs retained, without requiring the creation of new jobs.

Additionally, the agency's Volunteer Iowa program allocated $400,000 in state and federal funds to set up a mobile response unit, which will help repair tornado-damaged homes in Marshalltown.

"We came to the table with all of our tools, with all of our programs and creativity," Durham said during a Friday meeting of the Iowa Economic Development Authority board.

Officials with Lennox did not respond to a request for comment.

"We're working with representatives at a state and federal level to understand options as we pursue our rebuilding efforts," Vermeer spokeswoman Liz Sporrer told the Register. "Nothing has been decided yet at this time."

Vermeer CEO Jason Andringa committed to rebuilding the Pella campus on the same day the storm hit. While several buildings were severely damaged, the company reported all employees were back to work within a month of the storm.

In early September, the family-owned manufacturer announced it would not only rebuild but expand the campus with the addition of a new engineering facility.

At the time, Andringa said the storm didn't significantly impact the company's bottom line.

"So far, we feel as though we've lost very, very few sales, and very, very little market opportunity because of the tornado," Andringa said on September 5. "Our volume has bounced back quickly."

More: Vermeer will rebuild 2 plants, expand Pella campus after tornado

Likewise, Lennox leaders quickly committed to rebuild their battered plant in Marshalltown.

In August, Lennox CEO Todd Bluedorn told investors that the storm was expected to cost the company $100 million in lost revenues this year. But he said those losses would be covered by insurance.

"One message I want to make sure I leave you with, though, is that we fully expect any tornado-related lost revenue impact and special charges in 2019 to be covered by our insurance," he told the investors.

More: Lennox rebuilding Marshalltown plant, expecting $100 million in lost revenue

More: Marshalltown faces big questions as residents dig out of tornado destruction