County Board: Tax break approved for company that won’t reveal identity

• News and notes from the Aug. 12 Winnebago County Board meeting

By Stuart R. Wahlin
Staff Writer

After lengthy debate, members of the Winnebago County Board voted unanimously to approve a 10-year property tax abatement to a confidential company known only to officials as “Project Eagle.”

The development in the Loves Park Corporate Center, between Bell School Road and I-90 north of Riverside Boulevard, is represented publicly by landowner Venture One Real Estate, LLC, based in the Chicago area. The mystery company has proposed immediately starting construction of $6.25 million, 125,000-square-foot manufacturing and distribution facilities, while promising 175 new or retained jobs. On materials presented to board members, the phrase “175 retained” was circled, while “new employees” was not.

The abatement will start with 100 percent of property taxes being waived for 2012, declining by 10 percentage points each following year until reaching the 40-percent mark for taxes payable in 2019. The abatement will remain at 40 percent through the 2021 tax year, after which the abatement will expire.

Economic Development Committee Chairman John Ekberg (R-10) noted the site presently generates only $22 in property taxes per year, but that the development would bring in more than $1,600 the second year of the agreement, despite a 90-percent abatement rate. During the 10-year abatement, according to Venture One estimates, the development would bring more than $72,000 in property taxes to the county. Once the abatement expires, the company noted, county property taxes paid in the 11th year would exceed $20,000.

Although the county has tentatively agreed to a similar abatement for another undisclosed company known only as “Project Phoenix,” which is to reveal its identity prior to a final vote, Bob Hastings (D-13) noted this was the first time board members were being asked to formalize an abatement before a firm’s identity was made known. Chairman Scott Christiansen (R) granted Democrats a 10-minute caucus to discuss the pending vote.

As Democrats planned a coordinated response in an adjacent room, Doug Aurand (D-3) argued there were simply too many unanswered questions.

“We don’t know who this is,” he asserted. “We don’t know if it’s new jobs. We don’t know if they’re retaining jobs. We don’t know what they’re gonna pay these people. And before we do it, I think it would be irresponsible for just blindly voting for something that we don’t know who the company is.

“These people have gotta be forthright, like the Phoenix one,” Aurand added. “We haven’t voted on that yet, but when that comes to us, I’m going to be very leery voting on that until I know who the Phoenix project is.”

He warned that approving the abatement for an undisclosed recipient would set a precedent for more of the same in the future, which Aurand feels would be a disservice to voters and taxpayers.

Democrats were not all in agreement, however. Karen Hoffman (D-11), who also serves as the county’s assistant administrator for the Illinois Department of Human Services, argued that too many jobs are at stake to put the proposed development in jeopardy.

“We are up to over $7 million a month in issuing food stamps,” she reminded colleagues. “Come November, when unemployment runs out, we are going to be in serious, serious, serious trouble in Winnebago County. We have got to be more friendly to business.”

Paul Gorski (D-5), however, noted there’s no guarantee the company would remain in the area. He said he frequently sees evidence of this along the I-90 corridor, and that the county has gotten burned in the past by not checking out the financial solvency of other companies the county has done favors for, like Wight Partners, which had once planned to build an ethanol plant.

“I just want to know who we’re dealing with,” he asserted.

George Anne Duckett (D-12) concurred, “I think that the taxpayer has the right to know who the county’s doing business with.”

In what came as a surprise to other caucus members, Gorski noted a $1,000 political contribution to Chairman Christiansen’s campaign had been made by Venture One in June. Democrats then seemed in agreement that a layover should be requested to seek reassurance the mystery company is a reputable one.

At the 10-minute mark of the caucus, perhaps sensing resistance, Ekberg and Director of Regional Planning and Economic Development Sue Mroz knocked and entered the room. Mroz indicated Steve Goode, a principal of Venture One, said the company needed an answer by the end of the month. Democrats noted a layover until the Aug. 26 meeting would fall within that time frame.

Mroz said she had a pretty good idea as to the identity of the company, but would only say, “It’s a good one.” She noted that Winnebago County is competing against other sites the company is considering. She reminded Democrats that the county lost a Staples facility because the confidentiality of the company had been compromised prematurely.

Ekberg said he believed the trend of secrecy is something the board will be unable to escape in the future, and that board members will have to learn to accept it if the county is to be competitive. As an example, he explained that one possible reason a company may wish to remain anonymous is to keep its present landlord from learning it plans to relocate.

In unison, Aurand and Duckett responded, “That’s not our problem.”

Once the full board was back in session, debate ensued regarding whether the matter should be laid over. Ekberg began by asserting it would send the wrong message, but Aurand noted a vote Aug. 26 would still meet the developer’s requested end-of-the-month deadline, while providing time to put concerns to rest.

Bob Kinnison (R-10), who did not favor delaying the vote, assured colleagues the board could always rescind the abatement later. Gorski, however, argued such a move would make the county vulnerable to a lawsuit.

Ekberg noted that Venture One has established a positive track record of bringing reputable businesses to Winnebago County, like a Pepsi plant in the same corporate park.

Majority leader Frank Gambino (R-14) argued: “I find it very interesting, after…a couple years of everybody here saying: ‘We need jobs. That’s our answer.’ Then, we’re not prepared to take the risk to bring the jobs to our community. This is war out there, folks. We have to act. You don’t push people away, saying, ‘We’re not sure.’”

John F. Sweeney (R-14) added: “Given the unemployment rate in this community especially, I think two weeks is a long period of time when dealing with a company that’s in competition with other states. And the fact that Illinois is such a not-business-friendly state makes it even more important for our board to be a pro-business board.”

What appeared to have been a united front in caucus by Democrats to seek a layover began to crumble when Hoffman sided with Republicans, agreeing the county needs to assert a pro-business reputation without delaying the vote. L.C. Wilson (D-12) and Pearl Hawks (D-6) also spoke against the layover.

Dave Yeske (R-2), however, was the only Republican who supported the motion for a layover.

“As an elected official, I do not feel comfortable when the chairman of the Economic Development Committee doesn’t even know what business this is,” he told Ekberg. “If at least you knew, I’d feel more comfortable with it. …I think your voters deserve a little more than that. We have a responsibility to kinda know what we’re doing here—not to vote in the dark, not vote out of fear. There isn’t a board member here that doesn’t want jobs coming in, but we’re not a bunch of dummies, and we’re not going to be pushed by fear. C’mon, let’s be responsible.”

The motion for a layover failed in a 16-9 vote. Aurand, Isidro Barrios (D-11), Duckett, Gorski, Hastings, Mel Paris (D-8), Dorothy Redd (D-6), David Tassoni (D-7) and Yeske cast the votes in favor.

With the possibility of a layover for more information now exhausted, and after more than 30 minutes of discussion on the floor, board members voted unanimously to approve the resolution. Aurand said his “yes” vote was based on trust in Ekberg, while Gorski indicated his “yes” was cast so he’d be on the prevailing side, thus giving him the ability to move for reconsideration at a later date.

City Plaza leaking more than dollars

Board members awarded a $167,397 bid to McDermaid Roofing for replacement of the roof at the county’s recently-acquired City Plaza building at 555 N. Court St. in Rockford, where the Health Department is consolidating operations from three other locations.

In December, board members agreed to buy the building for $775,000. In March, board members approved $245,500 for architectural services related to remodeling of the facility, for which the board later approved a $2,425,000 contract. Last month, board members approved $405,464 for the replacement of heating and cooling systems. Also in July, the board voted to issue more than $4 million in bonds to cover the purchase and necessary renovations.

Steve Schultz (R-2) and John F. Sweeney (R-14) are the only board members to have voted consistently against all expenditures related to the City Plaza building.

In related news, the board also approved fee increases for the Health Department’s Environmental Division. According to Public Health Administrator Mike Bacon, fee increases are one of the ways the department is funding the City Plaza project.

NLI donates 61 acres to Forest Preserve District

Convened as Forest Preserve District commissioners, board members approved the donation of 61 acres by the Natural Land Institute as an expansion of the new Stone Bridge Forest Preserve along Kinnikinnick Creek.

In other forest preserve news, board members approved the annexation of the Rockford Rotary Forest Preserve into the Cherry Valley Fire Protection District, after the preserve was annexed by the Village of Cherry Valley in 2007. Previously, the preserve had been under the territory served by the New Milford Fire Protection District.

Resolutions

• Extending an agreement with outside auditors Sikich, LLP for a total of $420,160 for 2010-2012.

• Eliminating a leaf pickup program operated by the county’s Highway Department, which has resulted in a loss for the county each year of the program. Instead, the Purchasing and Highway department will now assist residents in unincorporated areas of the county find a private service to take over the leaf collction. According to Chairman Christiansen, the private contractor will charge residents less than the county had for the service. Redd and Gorski voted “no,” because the county promised residents the service when it banned leaf burning.

• Endorsing the Rockford Regional Consortium for Sustainable Communities and its application for federal planning-grant funding for the region. The Rockford City Council approved a similar measure Aug. 9.

• Rescinding an agreement with Oregon Healthcare Pharmacy Services for pharmacy services at River Bluff Nursing Home, which the board voted to enter into in June after terminating a longstanding relationship with Nihan & Martin. The agreement was not to begin until Sept. 1. Instead, the nursing home will now do business with Forum Extended Care Services.

Proclamation

Aug. 14 was proclaimed Honoring the Mounds Day.

Absences

Kyle Logan (R-3), Carolyn Gardner (D-9) and Tom Owens (R-1) were absent.