Clive vending machine company seeks state tax credits for overhaul of products and services
KENT DARR Oct 16, 2015 | 3:16 pm
2 min read time
501 wordsAll Latest News, Economic Development, ManufacturingThe Wittern Group plans to spend $11 million on research and development over the next three years to expand its Clive-based vending machine manufacturer and servicer’s product lines, according to an application for state development incentives.
Wittern is seeking $278,500 in state research tax credits, investment tax credits and in relief from sales taxes on construction materials on a project that will cost nearly $18 million.
The Iowa Economic Development Authority will act on the request during its meeting today. On Oct. 8, the Clive City Council passed a resolution in support of Wittern Group’s application.
According to documents provided the council in advance of its vote, Wittern Group plans to hire three engineers at starting wages of $38.46 to $52.89 an hour to work on an overhaul of its operations.
“The main goal of this project is to expand our existing software platform in the food service industry with the intent to broaden into new markets,” according to the IEDA application. Those markets include health care, retail, will call and Internet technology.
“To do this, it will require us to reinvent the entire product line and offerings from a standard vending machine,” according to the application.
Wittern Group CEO Heidi Chico said company’s future is in helping customers control the dispensing of a range of items, from medications in a hospital to office supplies. Customers need to know what is being dispensed, by whom, for what purpose, even the time of day, she said.
“It’s a new world and we’re excited by the opportunities,” she said.
In addition to spending $11.2 million on research and development, the 85-year-old company plans to spend $3 million on machinery and equipment, nearly $1.3 million on computer hardware, $500,000 to remodel its building at 8040 University Blvd. and $400,000 on computer hardware.
The request for tax credits breaks down this way: a $168,000 research tax credit, a $95,500 investment tax credit and a $15,000 credit on sales and use taxes for construction materials.
In other action, the IEDA board will decide whether to award nearly $3.4 million in state brownfield/grayfield tax credits for four projects in Des Moines, including $1 million for the planned $101 million Iowa Events Center Hotel and $1 million for Neighborhood Development Corp.’s $26 million Dunham Square residential project south of Principal Park.
Projects must compete for the awards, which are capped at $1 million and based on a percentage of development costs. The pool of funds available for all projects is $10 million.
After considering more than 80 requests for the funds, including 24 from projects in Des Moines, an IEDA committee recommended funding for 13 statewide.
The other Des Moines projects recommended for the tax credits are $917,573 for the $14 million renovation of two historic Harbach buildings on Southwest Fifth Street and $469,347 for the $27 million renovation of the Equitable Building on Sixth Avenue.
According the a report, the allocation for the Equitable was less than requested “because the allocation of tax credits has been exhausted.”
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