Iowa courts Woodmen, hoping it might move its HQ across the river
January 16, 2015 by Cindy Gonzalez and Steve Jordon / World-Herald staff writers
Iowa is wooing an Omaha icon — Woodmen of the World Life Insurance Society — to get the 125-year-old company to move its headquarters to the other side of the Missouri River.
But Nebraska officials are fighting to keep Woodmen in Omaha, where its landmark 30-story skyscraper for decades has been a defining part of the downtown skyline.
“The City of Omaha is working closely with the Greater Omaha Chamber of Commerce and the state to do what we can to keep Woodmen in Omaha,” said Marty Bilek, Mayor Jean Stothert’s chief of staff.
He said the Mayor’s Office is concerned about the potential loss of hundreds of jobs and a longtime corporate citizen.
“The conversations are serious — if for no other reason, they involve people at the highest levels of government on both sides of the river,” Bilek said.
Iowa’s courtship with Woodmen began last spring, said Woodmen spokeswoman Jill Regester, after Douglas County denied a property tax exemption requested by the company. (An appeal of that decision is pending.)
Council Bluffs officials approached Woodmen, Regester said, but no formal deal has been struck. “There is still ongoing dialogue with the state of Iowa. It’s important that we continue to make good choices when it comes to our members’ money.”
Regester said there were “ongoing discussions with Nebraska.”
“I’m sure that they are interested in keeping us here,” she said. “We have a lot to offer a state, not only from a business standpoint but from the money we give back to communities.”
Regester said uprooting to Iowa could be attractive because of its “favorable business incentives and laws” and its appreciation for “the value that we bring, especially the 400 jobs.”
“If we were to look anywhere, Iowa would be the option,” Regester said.
Cassie Seagren, Stothert’s deputy chief of staff for economic development, and Bilek said they had been aware for about a year that a controversy was brewing.
At that time, Larry King, president and chief executive at Woodmen, approached the mayor to talk about its proposal for tax-exempt status, and why he felt the company was entitled to it, Bilek said. “He wanted us to know he was in the midst of a controversy involving the county.”
Bilek said the mayor, chamber officials and others have talked to county leaders to better understand the rationale for not supporting the tax exemption. “But at the end of the day, it’s their decision,” he said.
David Brown, president of the Greater Omaha Chamber of Commerce, said any chamber role would fall into the category of an ongoing “economic development project” that he could not discuss. In general, Brown said, the chamber’s job is to facilitate access to public incentives.
Bob Mundt, president and CEO of the Council Bluffs Chamber of Commerce, said he’s had multiple discussions about a possible move and that talks are “ongoing,” but he said he’s “out of the loop” on current discussions.
Tina Hoffman, a spokeswoman for the Iowa Economic Development Authority, said she could not discuss whether Iowa was negotiating with a specific business regarding tax incentives, but she said Woodmen has not at this point received any tax incentives from Iowa.
Dacia Kruse, Nebraska’s acting economic development director, also said she could not comment on whether Nebraska officials have been talking to a particular company about tax incentives. As of Thursday, she said, the state had not awarded any tax incentives to Woodmen.
Both Nebraska and Iowa have low rates for insurance premium taxes paid by insurance companies. Iowa’s rate is 1 percent, and Nebraska’s rate is 1 percent for property-casualty, title and individual accident and life insurance and 0.5 percent for group accident and health.
But Iowa does not charge a premium tax on sales of annuities or “qualified life insurance plans” and doesn’t have surtaxes or income taxes on insurance carriers.
The proposed tax exemption denied last April by the Douglas County Board would have knocked most of the Woodmen Tower off the county tax rolls and erased nearly $40 million in valuation.
Woodmen has appealed that decision to the Nebraska Tax Equalization and Review Commission.
The Woodmen society had sought exemptions on four properties in Omaha, and attorneys from Woodmen and the county sparred for weeks over whether Woodmen is primarily an insurance company or a charity.
Company lawyers argued that, as a fraternal benefit organization exempt from federal taxes, Woodmen is a charity eligible for local tax exemption as well. The company reported $40 million in charitable giving last fiscal year.
County lawyers made the case that Woodmen’s main purpose is selling insurance. Woodmen’s core insurance business brought in $1.2 billion in gross revenue in 2013, according to the organization’s 2013 annual report.
T.J. Twit of the Lund Company, which is the leasing agent for the Woodmen Tower, said Woodmen operations occupy roughly half of the leasable floors of the downtown tower.
He said the downtown office market would suffer for years if Woodmen were to leave. “They would leave a big hole behind that could take five-plus years to fill. Hopefully we don’t lose Woodmen downtown.”
Contact the writer: 402-444-1224, cindy.gonzalez@owh.com
