NIPCO supports the efforts of its member cooperatives to promote and partner with the communities they serve to advance economic and community development projects. Regularly, these policies are reviewed to ensure that the programs remain a valuable resource for members to increase and diversify sales, create and retain jobs, and grow commercial and industrial businesses in western Iowa.
"For several years, rural electric cooperatives have built several “spec” [sic: speculative] buildings across Iowa to jump-start development opportunities for communities and companies seeking opportunity," notes Iowa Area Development Group Vice President of Business Development Bruce Hansen. In recent years, spec site and building inventory has been depleted.
This spring, the NIPCO Board of Directors approved a staff recommendation to expand NIPCO's Economic Development Policy 6-4. The policy supports the development of speculative sites and buildings within the NIPCO footprint. The new policy now provides for funds to be loaned to a NIPCO Class A Member, Class A Member's Development Corporation, or a local community development corporation as designated by the Class A Member. Funding for the program will be the most cost-effective available funding source for up to $100,000 for developing a site and up to $500,000 for constructing a spec building per project.
"Costs have escalated in recent years," Hansen explains. "Steel and cement prices have gone up dramatically where even just two or three years ago, a 30,000 square foot spec building could be built for $900,000. Today, that same project might have a $1.2 million or more price tag."
An ideal spec building typically features a gravel base to allow for flexibility and most buildings are designed in such a way as to allow for expansion projects. Other features site selectors look for in a spec building include:
30,000 sq.ft. (Expandable)
30 ft. side walls
One drive-in overhead door
One walk-in door with 1,000 sq.ft. cement pad to walk/step on to
The updated policy language better aligns with the rising land acquisition, construction, and materials costs and further promotes partnerships between NIPCO's Class A Members and their community project stakeholders. Also new to the policy is the provision that NIPCO's financial participation in any project shall typically be the lesser of the amount of the sponsoring Member's financial commitment to the project; or one-third of the total project's capitalized cost and, in some cases, may allow NIPCO and its Member to participate in a project without a community stakeholder partnership and provide financing of up to fifty percent, each.
The new policy took effect on April 25, 2023.