The Cedar Rapids City Council has officially revoked its sponsorship of an upstart local firm that won state economic development incentives in 2011, then had those incentives revoked in March.
The firm, AgSugar International, now known as Vertecra, secured an incentive package worth about $600,000 from the Iowa Economic Development Authority in 2011, based on two industrial processes that the company said would benefit the ethanol industry. The company discovered in September 2011 that the processes didn’t do what they had expected, though the company pushed ahead and signed its contract with the state agency. The company said it was working on other similar efforts.
The city of Cedar Rapids, as well as the local economic-development entities in Cedar Rapids, had supported the AgSugar International pursuit of state incentives, incentives that also called for a local property-tax exemption.
In revoking its sponsorship, the City Council noted that the Iowa Economic Development Authority had notified AgSugar International/Vertecra in March that the company had defaulted on its contract with the state agency. The company has asked the agency to reconsider.
The company’s troubles and its public incentives were reported in a story in The Gazette in January. The Gazette reported last month that the state agency had ended AgSugar International/Vertecra’s contract and demanded that the company return $250,000 it already had received from the state agency.