‘Something to work with’
STERLING – Local economic development officials are “very happy” with Gov. Pat Quinn’s move Tuesday to extend the Illinois Enterprise Zone program.
Betty Steinert, administrator of Whiteside County Economic Development, attended the signing of the legislation at Quad City International Airport. She has been working with the state Enterprise Zone board for many years “to get this going forward.”
Under the new measure, the Enterprise Zone program, launched in 1982 and set to expire next year, is extended 25 years.
The new law, which takes effect immediately, also creates a board to oversee the process of determining which companies are eligible and allows for a handful more zones. It also beefs up reporting requirements of companies receiving tax benefits from the program.
Enterprise zones are a key development tool used to attract businesses to an area.
Business that build in such zones, which often are created in economically depressed areas, are given tax breaks and other incentives, such as an exemption on the retailers’ occupation tax paid on building materials and a tax credit for jobs created, for a certain amount of time.
Companies want to know these programs are stable before locating in a particular area, Steinert said.
Extending the program also will allow businesses more time to develop their ideas, she said.
“If they can’t get a project started today ... another year before they get all the planning, they don’t have to worry about the incentive running out.”
There are 97 enterprise zones statewide, all set to expire at different times based on when they were created. Those about to expire first are at the front of the line to apply for a 25-year extension.
Whiteside County’s Enterprise Zone is set to expire in 2018, but it cannot apply for the extension for 2 years, Steinert said.
The new legislation extends the enterprise zone for 25 years and creates a process for existing communities with zones and new communities to apply for the designation.
The county’s enterprise zone was instrumental in bringing several new businesses to Sterling, big and small, she said. Among them: Kohl’s, P&P Industries, Sterling Steel and Martin’s Steaks and Spirits.
The $7.3 million Kohl’s project in 2010 resulted in the creation of 60 jobs. That same year, the $194,000 Martin’s Steaks and Spirits project created nine jobs.
Heather Sotelo is executive director of Greater Sterling Development Corp.
“For us, it’s been instrumental in many, many recent projects. It’s one of the last real incentives that we’re able to offer from the state,” Sotelo said.
Enterprise zones cause concerns, though, because tax abatements can mean less money for taxing bodies while they are in place.
School districts, however, will not be penalized, Sotelo said.
“Many times with school districts, they feel that it takes money away. In the case of enterprise zones, money is reimbursed by the state.”
Scott Shumard, Sterling’s city manager, said in an email that it is “good to see that Illinois can still get some things right.”
“Despite all the consternation and discord, all sides came together to pass legislation that supports one of the only local economic development tools afforded to local governments,” Shumard wrote.
“Without the E-zone extensions, we would have undoubtedly become even less competitive with our neighboring states.”
Across the river in Rock Falls, Sandy Henrekin, too, was pleased with its passage.
“The legislation is really good news for the enterprise zone and the ability to extend,” said Henrekin, executive director of Rock Falls Community Development Corp. “It’s going to provide a vehicle to do so.”
John Thompson, CEO of the Dixon Chamber of Commerce and the Lee County Industrial Development Association, said he hopes to secure a 25-year extension for its enterprise zone, which expires at the end of 2017.
Among the Lee County companies that have benefited from e-zones is UPM Raflatac in the county business park.
“Until we had legislation that would allow the program to go forward, every zone in the state was dead in the water,” Thompson said. “Now we have something to work with, to go forward for the future.”
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