The company that promised to build a factory to manufacture LED lights and bring 100 jobs from China to Bettendorf has only managed to hire five part-time employees, has yet to begin construction of a building for which the city approved a 10-year TIF (tax increment financing) incentive three years ago, and is six payments behind on a loan from the Bi-State Regional Commission's Revolving Loan Fund.
LEDS America also has been put on notice by Eastern Iowa Community College job training officials that no more funds will be reimbursed for employee training until the project achieves more consistent progress.
LEDS America (which also operates as LED-O Holding, LLC) was approved to receive $130,000 in job training funds a year ago for customized training for 15 employees at an average wage of $17 per hour, plus health, life, dental, vacation benefits and holiday pay.
The job training program has reimbursed the company approximately $30,000 to date, but job training officials say the firm will have to make better progress on its business and hiring before any more funds will be paid under the agreement. The job training agreement is for three years, expiring at the end of June 2015.
The company, with the support of city economic development officials, obtained a three-year loan from the Bi-State revolving loan program in August 2012 for $107,000 to be used as working capital. The company said the funds would be used to retain three jobs and create 24 new jobs within the first two years of the project. The 4 percent interest loan also included a personal guarantee for repayment by Joel Westermarck, president of LEDS America who resides in Florida.
According to Bi-State loan fund officials, the company's last payment was this past September and the six payments in arrears total $19,000 to $20,000.
Westermarck partnered in 2011 with local developers Alan Frankel and Doug Borgeson of Plantation Development to obtain TIF incentives of up to $475,000 over 10 years to build a 7,200-square-foot office and 13,000-square-foot assembly building. The total estimated cost of the LED assembly building was $1.5 million, and the office building $650,000.
In 2012, a 5,000-square-foot building was constructed on the 19-acre site – called the I-74 Technology Park – under the city's TIF incentive program, and the office building is one of two headquarters listed for LEDS America on its web site.
The technology park was designated by the city council as a TIF district in August 2009 with the requirement that each new development would need to be brought before the city council for review and approval.
An early project consisting primarily of office space was proposed for the technology park in 2010, but that plan was later scrapped. One of the requirements for obtaining TIF rebates at the technology park is that the operation must be a "primary" business which creates new jobs in the community.
Initially, the LEDS America assembly facility was located in a former lawn equipment distribution warehouse at 6125 Valley Dr., Bettendorf. The company's web site now lists 434 S. Devils Glen Road, Bettendorf, as its assembly location.
Under terms of the job training agreement with the Eastern Iowa Business and Industry Center, LED-O Holding was to move its operation from China to a new 13,000-square-foot building that could eventually be expanded to 75,000 square feet.
