Despite an Iowa Values Fund compromise being approved by the state Legislature, three Ames-based companies still hang in limbo on what future the deal may hold for them.

In February 2004, NewLink Genetics Corp., 2901 S. Loop Drive; Phytodyne Inc., 2711 S. Loop Drive; and NovaScan Technologies, 131 Main St., were promised more than $9 million from the Iowa Department of Economic Development as part of the economic stimulus plan.

In June, however, hopes of increased development were dashed after the Iowa Supreme Court struck down the Values Fund, citing an illegal use of line-item veto powers by Gov. Tom Vilsack.

One company, NewLink Genetics, was about to sign a contract to receive $6 million from the Iowa Values Fund the day the announcement came out, said Nick Vahanian, chief medical and operations officer for NewLink. The company, Vahanian said, has since put the funding at a lowered priority.

“We are hoping that all these political issues are going to be worked out so we can get back to business,” he said. “It’s important for us for business growth.”

The money, in the form of a forgivable loan, would help augment the overall capital investment for the company, a projected $186 million. Since the ruling, future investments from private, out-of-state sources have been in doubt, he said, because it has signaled that there is possibly little or no support from the state.

“It’s important for further investments to see support from the state,” Vahanian said.

With the approval of the new compromise, Story County will receive more than $16 million. Much of that money, approximately $9.7 million, will go to businesses that have already been promised aid.

According to the Iowa Department of Economic Development, the ISU Research Park will receive more than $4 million to help bolster its growing needs. Another $2.5 million will go to various programs such as Iowa Workforce Development, to help promote employment opportunities.

The total amount, however, is much lower than the original Values Fund had proposed.

Tina Hoffman, spokeswoman for the economic development department, said the original language allocated $10 million for the ISU Research Park. That amount was supposed to be given to the research park over the course of two years.

During a legislative special session Tuesday, state legislators warned that any delays on reinstating the fund would lead other companies to abandon prospects in Iowa.

Rep. Clarence Hoffman, R-Charter Oak, said Phytodyne already has plans to move part of its business to Canada. He told the Legislature this did not mean the end of Phytodyne’s business in Ames, however.

It was important, Hoffman said, that the state show support for growing businesses, and to invest in the future of the state.

“As we move into the public, what do they want? Good paying jobs for their kids,” he said.

Iowa has a strong potential to create such jobs. Rep. Jim Kurtenbach, R-Nevada, said Iowa State is second in the nation for creating patents, but has had little success in converting them into viable companies.

NewLink Genetics is currently testing a lung cancer drug under the supervision of the National Institute of Health, Vahanian said. The process could take between three to five years for approval, and if the drug gets approved, it could expand its current staff of 33 to more than 300.

Kurtenbach said he has talked to many firms that have been heavily courted by other states. Reinstating the fund, he said, was important to keep them in Iowa.

Many lawmakers viewed the fund as a way to address future growth in the state, as well as plan to keep the state on its feet during rough economic times.

According to Iowa Workforce Development statistics, Iowa has suffered a net job loss of 7,000 during the past 12 months.

Though Iowa has suffered a net loss of jobs, Hoffman said he believed it was important that there was a program like the Iowa Values Fund to help create new jobs and cushion the blow from job loss. Various programs, including the Iowa Values Fund, have helped produce 11,000 more jobs in the same time.