By Ted Schnell • BocaJump | Dec. 21, 2011
Two weeks ago, representatives of the Elgin Area Chamber of Commerce laid out to the City Council the depth of the economic benefits their efforts are bringing to the city.
Tonight, the Elgin City Council will consider inking both deals that were outlined in the chamber’s report on Bystronic and a proposal Pancor to build a “spec-built” building in an attempt to draw a manufacturer to the city.
The report weighed the costs of proposed city incentives to two companies versus the economic benefits the companies are expected to bring to Elgin. The presentation appeared to be as much a validation of the chamber’s economic development work as it was a rebuttal to criticisms of the chamber over the past year from opponents of the city’s business license. Revenues from that license originally were intended to fund economic development efforts by the chamber and the Downtown Neighborhood Association.
The council will be asked to approve a job incentives pact with Bystronic North America, a Swiss-owned manufacturer of high-tech cutting systems that this year built a new. The company this year built a new 48,300-square-foot building on Airport Road in Elgin, to which it transferred its U.S. headquarters from New York over the summer. The company was expected to open the facility here and create 25 jobs, with plans to increase its Elgin workforce to 40 by 2015.
City Management Analyst Aaron Cosentino said Monday the jobs incentives package originally was put together when the prior council was seated but did not come up for approval until after the spring municipal elections. The new council wanted an analysis of the economic benefits of the incentives package compared with its costs to the city.
The cost of the Bystronic package totaled as much as $167,000. That includes as much as $85,000 in bonuses the city would pay the company for each employee it hires. The company would be required to maintain for the first five years at least 25 jobs with annual salaries of at least $40,000. But the city would pay incentives to entice Bystronic to grow its workforce.
During the first five years of the agreement, Bystronic would receive $2,000 for each job created with an annual salary, before benefits, exceeding $40,000 and $3,000 for each of the initial 25 jobs created with an annual salary exceeding $70,000. After that, the benefit is cut to $1,000 per job paying at least $40,000 before benefits. Under the agreement, Bystronic is supposed to recruit and hire Elgin residents.
That part of the agreement is capped at $85,000.
The second part of the agreement would reimburse Bystronic $81,843 for impact and other fees associated with its new facilities in Elgin and would give the company two annual memberships to Bowes Creek Country Club for three years.
In its report to the council two weeks ago, representatives of the Incentis Group LLC, which was hired to conduct the benefits-to-cost analysis of the proposed incentives, said that for the cost of the $167,000 incentives package, Bystronic would have a $17 million annual impact on Elgin’s economy. That figures includes both direct and indirect impacts of the company doing business here.
Pancor package
The second deal is with Pancor Construction & Development LLC and calls for the city to waive 40 percent of its fees related to the construction of a 167,000-square-foot building with a 30-foot clear ceiling height. A recent report found Elgin has little to offer industrial businesses in terms of facilities they could move into, and the Pancor proposal aims to create just such a facility at 1385 Madeline Lane in the Randall Point Business Center, which is off Big Timber Road, west of Randall Road.
The total value of the waived fees is about $78,000.
The Incentis analysis concluded the Pancor project would generate a $14 million annual economic impact on the city.
