Illinois Revives Premier Corporate Tax Incentives

Gov. Bruce Rauner has signed legislation reinstating the Economic Development for a Growing Economy incentives program (EDGE), a vital tool in winning big-ticket projects.


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Gov. Bruce Rauner has signed legislation reinstating the Economic Development for a Growing Economy incentives program (EDGE), a vital tool in winning big-ticket projects.
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Illinois Revives Premier Corporate Tax Incentives

Gov. Bruce Rauner has signed legislation reinstating the Economic Development for a Growing Economy incentives program (EDGE), a vital tool in winning big-ticket projects.

Illinois Revives Premier Corporate Tax Incentives

By the BF Staff
From the September/October 2017 Issue

Gov. Bruce Rauner recently signed a bill reinstating Illinois’ premier corporate tax incentive program and, some argue, could help the state edge out other Midwestern contenders for projects heavy on job creation.

Illinois has been without its sometimes-controversial EDGE program—short for Economic Development for a Growing Economy—since May, when the previous version expired.

Illinois EDGEWith the revival of EDGE Illinois is among contenders for a manufacturing plant that Japanese automakers Toyota and Mazda want to build in the U.S., which could hire 4,000 workers. The new version of EDGE remains in effect until June 30, 2022.

The Rauner Administration made changes to the previous EDGE program, shutting down job incentives that his Democratic predecessor, Gov. Pat Quinn, allowed for job retention. Rauner also halted a practice that let dozens of companies collect millions of dollars in tax breaks for creating jobs at one office while eliminating a greater number
of jobs at another location.Illinois EDGE

“There are a lot of improvements,” said Todd Maisch, president and CEO of the Illinois Chamber of Commerce. “The most important thing is we’ve eliminated an embarrassing situation where Illinois had no real economic development tool.”

EDGE sunset right when Taiwanese electronics-maker Foxconn was looking for a place in the Midwest to make a multibillion-dollar investment, Maisch said.

Foxconn, best known for making Apple’s iPhones, during the summer announced plans to build a plant in the southeast corner of Wisconsin that could employ up to 13,000 people.

The new program would still provide tax breaks for companies that promise to create jobs in Illinois, as it always has, but comes with tweaks. There’s credit for the cost of training new employees and investing in low-income areas, plus provisions that allow small businesses easier entry into the program.

The bill signed by the governor contains a provision that lets the state take back the credits if a company stops operating and intends to shut down its project. That money can then be reallocated to develop the workforce and expand opportunities for the unemployed, women and minorities. New to this bill are provisions that let smaller businesses access a credit that previously skewed toward large firms, Maisch said.

For example, if an applicant for the credit has more than 100 employees, the project must result in a capital improvement investment of at least $2.5 million in the state. There’s no capital investment requirement for companies with 100 or fewer employees.

It also requires smaller businesses only create a number of new jobs equal to 5 percent of their total workforces.

Additionally, it offers credits for employee training and for retention.

Gov. Rauner also signed legislation to revive an expired tax credit that encourages investment dollars into early-stage, innovative companies in Illinois.

The Angel Investment Tax Credit, which expired last December, allows investors to take a 25-percent tax credit on a minimum $10,000 investment in eligible small businesses. Qualifying companies must have fewer than 100 employees and be principally engaged in innovation or technology in Illinois.

“It is crucial for the future success of our state that we enact pro-growth economic measures to make Illinois a more business friendly environment,” Gov. Rauner said. “A key piece of that is fostering innovation and technology development amongst entrepreneurs who are trying to grow their small business. This important tax credit will help entrepreneurs succeed, including those who are typically underrepresented in the technology sector.”

The new law revives and extends the credit for five years and caps the program at $10 million annually. For the first time, the law sets aside $500,000 for investment specifically in businesses in rural Illinois counties and another $500,000 for businesses owned by women, minorities and people with disabilities. The previous tax credit expired Dec. 31, 2016. Lt. Gov. Evelyn Sanguinetti, who chairs the Governor’s Rural Affairs Council, led a bipartisan coalition of legislators to reauthorize the Angel Investment Tax Credit and include the set-asides for underserved communities.

“I applaud Gov. Rauner for signing this bill to help encourage investment in early-stage, innovative companies in our state,” Lt. Gov. Sanguinetti said. “And for the first time, this program will set aside much needed funds to help small, innovative businesses in rural Illinois and those owned by women, minorities and people with disabilities. This is a tremendous tool that will help spur innovation in our state and create much-needed jobs in our rural counties and throughout Illinois.”

Since its inception, the ATC has encouraged $164 million of investment in innovative Illinois start-up businesses.

Gov. Rauner also enacted an extension of the River Edge Redevelopment Zone tax credit program. The tax credit program has helped preserve historic buildings and grow local economies in the five communities where the credit is applicable: Aurora, East St. Louis, Elgin, Peoria and Rockford.

“This program has already been a huge success,” Gov. Rauner said. “The River Edge Redevelopment Zone Program helps stimulate the state’s economy and the local economies where the program is available. It’s an important tool for municipalities to utilize to spur economic development while saving and restoring historic buildings, and it’s the right move to extend this program through Dec. 31, 2021, so these communities can continue to grow and prosper.”

The redevelopment program is credited with creating a $10 return for every $1 of credit, and a series of success stories have materialized as a result of the program. For example, the St. Charles Senior Living Center—a rehabilitated, 60-unit independent living facility in downtown Aurora—was a beneficiary of the tax credit and subsequently received the 2017 Landmarks Illinois Award for Rehabilitation. In Peoria, an old barrel-making facility was transformed into luxury apartments that still reflect the historic building’s original charm. And in Rockford, the program supported the very successful Prairie Street Brewhouse.

“The River Edge Redevelopment Zone initiative has been a critical tool for economic growth in downtown Rockford and provides a strong return on investment,” Rockford Mayor Tom McNamara said. “The incentive has helped us fill vacant properties and attract new capital investment to the city, while, at the same time, preserving culturally and architecturally significant buildings.”

Specifically, SB 1783 extends the River Edge Redevelopment Zone tax credit until Dec. 31, 2021. The program allows for an income tax credit to be awarded for the restoration and preservation of a qualified historic structure located in a River Edge Redevelopment Zone, which is a specific area designated by the state of Illinois, in cooperation with a local government, to safely revive and redevelop environmentally-challenged properties that will stimulate economic revitalization and create jobs in Illinois.

WHEELING: MIDWEST MEGA-HUB

Positioned in the heart of Chicago’s prestigious northwest suburbs, Wheeling is an ideal community to operate a business. Home to over 800 businesses, it is one of the largest business-industrial hubs in Chicago’s northwest suburbs. Wheeling offers approximately 14 million square feet of industrial space along with several expansive industrial parks which offer room for companies to grow. The 10th Congressional District including Wheeling is the 4th largest industrial concentration in the United States, and the Village of Wheeling ranks among the top five manufacturing employment concentrations in Illinois.

Illinois
Hamilton Partners is developing the former vacant land at 720 Northgate Parkway, constructing a 181,000-square-foot industrial facility that could accommodate up to four individual tenants. (Photo: wheelingil.gov)

Over 20,000 jobs are generated by Wheeling-based businesses, attesting to the community’s economic strength. Of those jobs, approximately 33.5 percent are in the manufacturing sector and nearly 20 percent are in the wholesale and retail sectors. Based on available space inventory, Wheeling’s industrial parks continue to experience strong demand from both existing and new businesses. Reports on available commercial sitesa are available here.

One example of this activity is the continued growth of Richelieu Foods. In 2016, the company located in a 115,000-square-foot food processing facility in Wheeling after a multi-state site selection program. Richelieu Foods initially opened with 115 jobs, and has increased both production capacity and employment in recent months. Wheeling worked with U.S. Rep. Bob Dold, Gov. Bruce Rauner, the Department of Commerce and Economic Opportunity and the Cook County Workforce Partnership to attract the company to Wheeling.

After a recent series of retention visits with local manufacturers, Village President Patrick Horcher acknowledged, “Our industrial and manufacturing businesses make major contributions to Wheeling’s economy through property, income, and sales taxes, along with indirect contributions. During the tours, company owners pointed out numerous items manufactured in Wheeling found in consumer appliances, medical devices, surgical robots, and more. Visiting these companies in-person really drives home the extensive impact our industrial community has on improving the quality of life for so many.”

Construction has begun on the first of two speculative industrial facilities. These two projects are the first speculative developments in Wheeling in over 20 years. Hamilton Partners is developing the former vacant land at 720 Northgate Parkway, constructing 181,000-square-foot industrial facility that could accommodate up to four individual tenants. The property is on track for completion later this year.

At 1075 Chaddick Drive, Sitex Group and The Missner Group are to demolish a vacant distribution facility and develop a new 83,755-square-foot facility that would be divisible up to two units. Both of these projects were facilitated with a Cook County 6b property tax abatement. Cary Goldman of the Sitex Group says “Wheeling has always been a great strategic location, however, we felt there was a lack of highly functional, modern distribution facilities capable of servicing consumer demands for faster delivery.”

Wheeling is also experiencing significant investment in its airport. Chicago Executive Airport links Wheeling to the world, with international visitors from India to Canada to South America regularly traveling through the airport. Chicago Executive Airport serves as a hub for business and industry, and as a logical magnet drawing businesses to the area. The Village plans to capitalize upon this business development asset by attracting complimentary aviation and business services, hospitality and dining opportunities. An overlapping Tax Increment Financing (TIF) district offers a strategic financing mechanism for pending and proposed developments in and around the airport. The Village remains committed to the health and prosperity of this valuable resource, which represents a means by which it can extend its reach to the world.

Transportation and accessibility remain among the Village’s most important assets. Interstate 294 is the eastern boundary of the Village, with interchanges at Lake-Cook and Palatine Roads. I-294 allows easy access to O’Hare International Airport, Chicago’s Loop, and the interstate system. Illinois 53, just west of Wheeling via Lake-Cook and Dundee Roads, also leads to the interstate system. North–South Routes U.S. 45 and Illinois 83 offer easy access to other Chicago Metro communities. O’Hare airport is directly accessible via I-294, 20 minutes from town. Commuter rail transportation is available to Wheeling residents, employees and visitors via the Metra North Central Line at the Wheeling Metro Station, which has regular service to and from Chicago’s Union Station, O’Hare Airport, and suburban communities further north.

With over $220 million in new projects well underway, the Wheeling community is positioned for a productive year ahead. Wheeling’s Village Board recognizes the significant contributions made by its businesses, and remains committed to serving the needs of its residents and business community with excellence. To this end, the Village Board promotes a “business friendly” atmosphere.

Wheeling, Illinois represents a diverse economic base representing more than 50 different sectors and an integrated, innovative business community. For more information about available sites and locating in Wheeling, please contact John Melaniphy, Director of Economic Development at [email protected] or (847) 499-9087.

ARLINGTON HEIGHTS OFFERS ACCESS

Arlington Heights is a growing, thriving community just northwest of Chicago, home to nearly 76,000 residents with an average household income of over $100,000. One of the five largest business communities in the Chicago area, Arlington Heights is home to more than 3,100 for-profit companies, employing over 50,000 workers.

Access is one of the top assets the community offers to businesses. Two Metra commuter rail stations link us to Downtown Chicago and a host of other northwest suburban municipalities. We are also served by three interstate highways: I-90, I-290 and I-355. Arlington Heights is also conveniently located only ten miles from O’Hare International Airport and five miles from Chicago Executive Airport. Our connectivity to three interstate highways allows Arlington Heights incomparable positioning within the Chicago metropolitan area and access to logistics by air and ground transport.

Arlington Heights is a great corporate destination. In 2016, HSBC relocated its North American headquarters to the community, bringing 1,500 jobs and re-occupying over 160,000 square feet of formerly vacant space. Retail also thrives in Arlington Heights. In 2016, the community conducted over $1.24 billion in retail sales, more than any other time in its history. Rapidly-growing grocery chain Mariano’s, which now boasts over 30 locations throughout the greater Chicago metropolitan area, opened its very first store here. We are also an attractive location for industry. In early 2015, SVM, a producer of gift and rewards cards for major corporations worldwide, opened their new international headquarters in Arlington Heights.

Other established businesses continue to call Arlington Heights home. Arlington International Racecourse is one of the world’s premiere horse racing venues. It has been the home of the Arlington Million, one of thoroughbred racing’s richest events, since 1981. The race track is also home to Ditka’s Restaurant. Co-owned by NFL legend and Super Bowl winning head coach Mike Ditka, this is the fine-dining restaurant’s third Chicagoland location. Mitsuwa Marketplace is the largest Japanese grocery store in the Midwest, serving as a destination for patrons throughout the Chicago area and servicing a large tourist population. Other notable employers such as The Daily Herald newspaper maintain their corporate headquarters in Arlington Heights, while GE Healthcare and AT&T continue to have a substantial presence in terms of footprint and employment.

Arlington Heights also remains a target of significant development. The Arlington Downs project is a new and exciting addition to the Chicago market. When complete, the $250 million mixed-use development will boast over 500 luxury apartment units, a hotel, a 10-screen movie theater, and over 100,000 square feet of retail, restaurant, and entertainment space. Set on over 27 acres of land just west of Arlington International Racecourse, the development has immediate access to IL-53 and will be a unique Chicagoland destination. Arlington Downs is being developed in phases. The first phase, One Arlington Apartments, was recently completed and also features an 11,000 square foot co-working space on the first floor.

As part of the community’s efforts to grow and support commerce and industry, Arlington Heights also offers a Zero Interest Loan program available to both new and existing businesses. Interested business or property owners can apply for an interest-free of loan of up to half their project cost, capping at $20,000. Eligible expenses range from the purchase of new equipment to technology upgrades to improvements of existing facilities. Retailers are also eligible for the Small Business Sales Tax Rebate program. New and growing retailers in Arlington Heights can receive a rebate of up to 50% of the local sales tax that they generate to reinvest in their business.

Arlington Heights is also home to exceptional quality of life. Arlington Heights high school students attend six of the State’s top 40 public high schools, according to U.S. News & World Reports. Robert Morris University offers a satellite campus in the community as well. The Arlington Heights Memorial Library is regularly ranked among the nation’s best public libraries for its size and has been given “five stars” by Library Journal, the publication’s highest rating. The community is also served by the Arlington Heights Park District and its 50+ public parks, and Northwest Community Hospital which continues to expand its operations and services.

Arlington Heights also features a unique, vibrant, and award-winning Downtown offering an enticing urban lifestyle with high-rise living and more than 30 shops and boutiques. It’s also home to nearly 40 one-of-a-kind ethnic and themed restaurants. Downtown Arlington Heights is also a Chicago area destination for entertainment, hosting outdoor concerts and year-round events. We are home to great entertainment venues such as Paragon Theater and Big Shot Piano Lounge, a great spot for live music in a classy and cozy environment. Also, the Metropolis Performing Arts Center offers top-notch concerts, comedy, and live theater in an intimate setting. We are served by Metra, hosting one of its most traversed stations with over 2,300 daily boardings. More exciting development continues with the construction of Parkview Apartments. This development will feature 45 apartments with 60 indoor parking spaces and first floor retail space.

With an exceptional quality of life, wealth of amenities, and unparalleled access throughout the Chicago area, Arlington Heights is primed to continue to grow and thrive.

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