Navistar, state forge deal on Lisle move

Navistar is moving to Lisle. And this time it looks like the deal will stick.

State officials and the engine and truck manufacturing giant forged an agreement that even Navistar’s ardent detractors say they can live with. A key concession is elimination of an engine-testing facility at the company’s new headquarters. The company also will receive several financial incentives.

Gov. Pat Quinn and Attorney General Lisa Madigan announced a $65 million incentive package for Navistar at the Lisle site this morning.

“Illinois is Navistar country,” Quinn said, “and we believe in Navistar.”

Also, the city of Naperville on Tuesday night agreed to lend its bonding authority to the project — a move that essentially makes nearly $12 million of stimulus money available to Navistar.

The company will take over the former Alcatel-Lucent building at 2600 Warrenville Road that has sat empty since January. The building is known for its satellite dish-shaped facade.

“Gov. Quinn and Attorney General Madigan showed great leadership in working with Navistar and the community to make it possible for us to move into this world-class campus and create economic opportunities for the whole region,” said Navistar President Dan Ustian. “We appreciate them standing up for us.”

The company has backed out of two previous proposed moves. A key sticking point was Navistar’s plans for an engine-testing facility, which residents fought citing environmental and quality-of-life concerns. Navistar plans instead to test engines at its manufacturing facility in Melrose Park.

In return for elimination of the engine-testing facility, an opposition group called Citizens for Healthy Development has agreed not to fight the company’s efforts to create a special taxing district that allows the company to use some of its property taxes to pay for infrastructure improvements on the 87-acre property. Lisle officials have estimated the tax district’s value to be at about $20 million to the company during its 23-year life span.

“We had to put environmental issues above the financial issues,” said MaryLynn Zajdel, one of the founders of the opposition group of residents who live adjacent to the proposed site. “The end result is something we all wanted.”

Navistar still has to go through Lisle’s zoning process, but that is considered a formality as village officials have been courting the company for nearly a year.

Don Sharp, Navistar’s vice president of communications, said the company hasn’t submitted the new plans to the village yet. But they call for three additions totaling about 25,000 square feet to the 1.2 million-square-foot campus. The company will invest roughly $110 million in improvements as well.

“We believe this is a plan that is going to work for everybody,” Sharp said.

The additions include a showroom in the front of the building, a conference room adjacent to a vehicle storage area in the basement of the western parking garage and a 15,000-square-foot addition that will house creative departments.

Navistar is currently headquartered in neighboring Warrenville at a facility of about 1,400 employees. The move will allow the company to consolidate many of its white-collar positions and add about 1,600 jobs to the local economy. Sharp said several hundred of the jobs will be new to Illinois and many engineering posts will require hiring. He said if all goes as hoped, the company could begin moving staff into the new building next year in late spring or early summer. The refurbishing efforts and additional building will create another 400 construction jobs, Sharp said.

Sharp added that the company’s first choice now is to test engines at its Melrose Park plant. But if they don’t do it there, the facility will stay in Illinois, a condition of the $65 million incentive package. The company also plans to relocate its parts distribution facility somewhere in the Chicago area. The incentive package also requires Navistar to remain in Lisle for at least 15 years, but Sharp said the company plans to stay longer. The incentive package is mostly made up of tax credits, Navistar officials said.

Earlier this year, Naperville was designated a recovery zone, which gave the city the authority to provide business loans to encourage economic development.

Naperville officials said that their allocation will be combined with Rockford and other municipalities in the area to create a larger pool for Navistar.

“This program is one of the key reasons that they can make their finances work,” said City Manager Doug Krieger. “We are not giving away money. If action were not taken on this, it would create a $14,000 hole for the city because we are being paid by Navistar for the ability to use it.”

Navistar will pay Naperville $15,000 for the right to access the $12 million in incentive money.

One other hurdle remains. The county and Lisle must rework an intergovernmental agreement with the DuPage Forest Preserve District that calls for the county and village to pay the forest preserve $1.5 million for a ring road that runs around the northern perimeter of the property. The county and Lisle would then donate the road to the company in return for guarantees on job creation and length of stay at the new headquarters.

For more details, check back later at dailyherald.com or read Thursday’s Daily Herald.

Staff writer Marco Santana contributed to this story.