Another firm seeks tax incentive to stay in St. Charles

Tax incentives have become the new norm for St. Charles to both attract and retain businesses in recent years. Monday night saw more of the same as aldermen gave preliminary approval to an incentive package designed to keep a corporate headquarters in town and allow it to create 150 new jobs.

AJR Filtration Inc. employs 250 people. In a couple of years, it wants to employ about 400 people. To do that, it must expand from its current headquarters at 3635 Swenson Ave.

With several sites in mind, business representatives came to the city to ask what it was willing to do to keep the company from leaving town.

The result is a seven-year agreement that would kick back about $29,000 in property taxes to AJR Filtration.

The company wants to move to an undeveloped swath of land just to the west of the East Side Sports complex on South Kirk Road.

The city currently receives about $50 a year in property taxes for the site. After AJR erects a 180,000 square-foot manufacturing building on the site, the property tax value would shoot up to about $20,000 for the city.

To help finance the expansion and relocation, the company wants to keep some of that money for the first three years after the move.

In the first year, the city would receive only about $1,900 in property taxes while AJR retains the rest. In the second year, the city would receive $3,900 in property taxes.

In the third year, the city would receive about $6,000. In the fourth year, the city would receive the full $20,000, and regular property tax payments would continue each year after that.

The fourth year is also when the city's guarantees kick in.

The company has expanded rapidly in the last 15 years.

To guard against AJR outgrowing the new space before reaching the full tax payment period, the deal assures repayment of some or all of the incentive money if the company jumps ship to another community anytime within the first seven years of the deal.

Aldermen gave preliminary approval to the incentive package Monday.

The full city council must take a vote before the plan is locked in.

In terms of the dollar amount, the $29,000 value of the AJR Filtration incentive is small compared to recent deals aldermen have inked.

In the last couple of years aldermen approved:

• A $1.5 million incentive package to lure a Volkswagen dealership from West Chicago.

• A $20 million sales tax rebate incentive to the new owners of Charlestowne Mall.

• A $275,000 incentive package to lure a global mosquito control company's headquarters.

• A $70,000 sales tax rebate incentive to bring a motorcycle dealership to town.