The U.S. subsidiary of Italian-based machinery component maker SPAL Automotive is temporarily pausing its $35 million expansion plan for a manufacturing, distribution and office facility in Ankeny.

But Iowa Economic Development Authority officials said today that the delay will likely result in a proposal for a larger project.

The IEDA board voted today to approve SPAL Automotive USA’s request to terminate its current development agreement awarded in May 2023 that included incentives from the state High Quality Jobs Program that the agency valued at $1.13 million.

The deal includes an estimated $930,000 in tax credit benefits and a $200,000 forgivable loan to aid the expansion.

The company last year proposed the construction of a state-of-the-art manufacturing, distribution and office facility that would be built in Crosswinds Business Park.

SPAL Automotive, founded in Correggio, Italy, in 1959, designs, produces and markets high-quality electric fans, blowers and fluid pumps for automobiles, buses, trucks and numerous types of machinery. It has subsidiaries and offices globally including in China, Brazil, South Korea and India.

Its products have been available for customers in the North American market since 1989 and it opened an office/warehouse facility in 2004 in Ankeny for the company’s U.S. subsidiary.

“The company and the community indicate that they will be coming forward with a new application and likely larger project in the next six to 12 months,” IEDA Compliance Project Manager Katie Rockey told board members at the meeting.  

“There were just enough changes to the original projections that it made sense to do this a little more cleanly as a new application in the future,” she said.

In a letter to IEDA dated May 23 and included in the board meeting materials, SPAL USA President Justin Sample told officials that delays in production from key customers who utilize SPAL products caused the company’s decision “to temporarily freeze the local manufacturing project in Ankeny.”

“The new target for production of these OE platforms is 2028; therefore, SPAL does not plan to begin construction of our new manufacturing facility in Ankeny until 2026,” Sample wrote.

An IEDA board document says the project as originally awarded would have created 15 incentive-qualified jobs. The project was scheduled to be completed in May 2026. No incentive funds had been dispersed for the project.

Tom Phillips, former president of SPAL USA and the consultant on the company’s Ankeny expansion project, previously told the Business Record that the company would produce a product at the new facility that will include three components: a motor, fan blade and external shroud.

The Ankeny City Council signed off on the development agreement in May 2023. SPAL’s plans included building a facility on nearly 25 acres between Southeast Convenience Boulevard and Southeast Crosswinds Drive in the Crosswinds Business Park. The facility will be east of Kreg Tool Co.’s headquarters at 7500 S.E. Convenience Boulevard.

The plan had three construction phases that would have resulted in a 360,000-square-foot facility when completed.

Senior Staff Writer Kathy A. Bolten contributed to this report.