By Ted Schnell • BocaJump
On a night marked by the announced formation of a citizens group to raise the volume on residents’ input into city affairs and to track Elgin’s elected officials’ spending decisions, the City Council on Wednesday voted 5-1 to table a $66,000 incentives package for Sears Holdings Corp.
Councilman John Steffen cast the sole dissenting vote; Councilman Robert Gilliam was absent.
The action came during the council’s regular meeting, after the citizen comments portion of the agenda during which Chuck Keysor and Craig Mason spoke to the council.
Keysor said he and Mason , who each spoke to the council two weeks ago, have formed a public service group they call Elgin Octave.
Keysor said the goal of the group will be to stimulate a “higher volume” of resident input to the council and that the group will advocate that the city handle its finances the same way residents must – by cutting costs rather than raising taxes.
“Too many residents face too high of a tax burden … Elgin Octave will advocate that the city cut back,” Keysor told the council.
As part of that advocacy effort, Keysor said the group will establish a website to track every council action on spending, recording each council member’s vote and a place for each one to explain his or her vote.
Keysor then introduced Mason, who as he did two weeks ago, asked the council to repeal the city’s business license fee.
Some of the revenue collected from the license fee is used to fund the Elgin Area Chamber of Commerce’s economic development efforts to bring new businesses to Elgin.
Mason spoke against the funding for the chamber, pointing to the Elgin Tech Center, which opened early this year in the Elgin Tower Building with hopes of eventually establishing Elgin as a regional technology hub.
Mason maintained again that most of the businesses he has had contact with oppose the license, and said the city’s second argument for the license – to help regulate and crack down on illegal businesses – already is available to the city through the court system.
Toward the end of the public comment period, another resident got up to speak very specifically against the incentives for Sears.
Terry Gavin told the council after two years of city budget cuts that ended some jobs and eliminated funding for some services, he did not want to see Elgin give money to a multi-billion-dollar corporation. He criticized the move as “corporate welfare” to large corporations that has little real benefit to residents and generally is not considered for smaller businesses.
Finally, he criticized a provision that would grant Sears Holdings $1,000 for every employee it brings to Elgin, plus another $500 for every Elgin resident the company hires, as a backward approach. He argued that to be truly effective for job creation, the bonus should be $1,000 for every Elgin resident the company hires and just $500 per employee hired from outside the city.
Those rounds of comments set the table as the council prepared to dig in to the agenda for its regular meeting, which started 37 minutes later than usual due to an extended Committee of the Whole meeting earlier in the evening.
Councilwoman Tish Powell made the motion to table the Sears Holdings deal, saying there have been many questions about it and about what some on the council perceive as a lack of adequate council direction to the city staff about addressing incentives of this kind.
The package was modeled after incentives deals the city has awarded in the past.
Powell, in moving to table the item, added she does not want the action to send the message that Elgin is not open for business in terms of discussing new business, but that the council must be diligent about the money it spends.
City Manager Sean Stegall said the City Council’s annual retreat would be a good opportunity for him to receive the council’s direction on negotiating incentives packages.
The council tabled the proposal for reconsideration in early June, after the council holds its annual retreat from 9 a.m. to 5 p.m. Friday, June 3, at Hawthorn Hills Nature Center in Elgin.
There was a brief discussion of tabling the item for as long as 90 days, but Mayor David Kaptain pointed out that tabling the matter essentially sets a moratorium on incentives until the item is taken off the table. “We have to have a plan to allow dialogue,” he told the council, whose members mostly agreed, as Steffen cast the lone “no” vote.
As originally proposed to the council, the deal with Hoffman Estates-based Sears Holdings Corporation would give the company a cash payment of $1,000 for each employee it hires whose annual salary, excluding benefits, tallies at more than $35,000. The city would pay Sears an additional $500 bonus for each of those full-time employees who are Elgin residents at the time they are hired. The agreement states the individuals must be employed in Elgin for at least four years or Sears would be required to refund the bonuses.
Also under the deal, the city would waive any building permit fees totaling $23,751.25.
The incentives would be capped at $66,000.
Also under the deal, Sears Holdings employees would be allowed to obtain resident rates for memberships at The Centre, the city-owned indoor recreation facility in the downtown.
In the first week of April, in anticipation of approval of the incentives, Sears Holdings signed a lease and began a planned $1 million investment to build out an existing building at 2428 Bath Road (west of Randall Road and south of Alft Lane.) on Elgin’s northwest side.
That aspect of the deal prompted Councilman John Prigge to question the incentives two weeks ago. He said it was like deciding to award a prize after the contest already had been won, because Sears had signed the lease before the incentives had been approved.
