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Applied Systems Leaving Coralville

Company Employs 100 People Locally

Brian Morelli

Iowa City Press-Citizen

April 28, 2006

"Economic development groups give them money, and then they leave when the money runs out and search for other venues of getting aid."

-- Coralville City Council Member Tom Gill

[Note: This material is copyright by the Press-Citizen, and is reproduced here as a matter of "fair use" for non-commercial, educational purposes only. Any other use may require the prior approval of the Iowa City Press-Citizen.]

Applied Systems Inc., which provides automated insurance agency services, is set to close its Coralville facility before its lease expires at the end of the year.

Applied Systems, 52010th Ave. Nos. 100 and 300, has been in Coralville for nine years and employs about 100 people.

Employees received word Wednesday of the decision to relocate operations to company headquarters in University Park, Ill., director of marketing Mike Hernandez confirmed Thursday from University Park.

"We decided from a dollars-and-cents standpoint it would make more sense to relocate back to our headquarters," Hernandez said, adding the company started investigating different options in August 2005.

The company's current space is split on two levels, and officials hoped to move to a new facility where they would have room to expand, Hernandez said.

They found a location in North Liberty and wanted to apply for state funds to help with the move. Coralville though, would not grant necessary permission to request those funds.

Coralville City Administrator Kelly Hayworth said the city worked to keep Applied Systems, including finding a developer "willing to give them a very aggressive rate."

"We have tried to work with Applied Systems over the past several months," Hayworth said Thursday. "They had a buyout in the last couple of years, and they don't seem quite as committed to community or employees as they used to be."

When the company initially came to Coralville, it received an estimated $200,000 in city and state grants, Hayworth said.

It could move but would not receive assistance for a second time without permission from the city, he said.

"(The) council's position was that there were multiple sites in Coralville. We asked them if there were more competitive offers, but we never received a response," Hayworth said.

Coralville City Council member Tom Gill said Thursday that the city wanted Applied Systems to stay in Coralville. He said Coralville is being used as a scapegoat for a company that wanted to leave.

"Part of it was if they went to North Liberty, they could apply for more incentives," Gill said. "They'll set up, take state money, then leave. They are just using Coralville as the reason for leaving."

"Economic development groups give them money, and then they leave when the money runs out and search for other venues of getting aid," he said.

It is unclear what would happen to the 100 or so employees, who mostly serve as customer support representatives.

The company would try to make arrangements for employees that wanted to stay with the company, Hernandez said. He was not sure how many would express interest, or if there would be any severance pay for employees.