Gurnee food distributor might leave town

Tax incentives are a lure being used to bring a specialty foods distributor to Waukegan from neighboring Gurnee, officials said.

Waukegan Mayor Bob Sabonjian said Woodland Foods would relocate on Sunset Avenue in a special taxing zone. Waukegan must hold a public hearing before the proposed inducement proceeds to a formal city council vote.

In these special districts, tax revenue generated by a property's increasing value is diverted to a special fund that pays for improvements there, such as landscaping or sewer upgrades.

Tax increment financing districts are controversial because government agencies such as schools do not receive the increased property tax money for up to 23 years.

Sabonjian said Waukegan is doing what it must to attract a business such as Woodland Foods and compete in today's marketplace.

“It's just one of the tools we've used for economic development,” Sabonjian said of tax increment financing districts. “Others use them.”

Woodland Foods President Craig Speed couldn't be reached for comment.

Along with the special taxing zone, Sabonjian said, companies can be attracted to Waukegan for warehouse and distribution space that's cheaper than in other suburbs. Woodland Foods would occupy more than 130,000 square feet in Waukegan.

Woodland Foods has been operating from Swanson Court near Route 41 on Gurnee's east side. In 2002, the company gained Gurnee village board permission to expand its facility, where it distributes nuts, chilies, salts and other items.

Should Woodland Foods leave Gurnee, it would be the second distributor with significant space to do so this year.

Hearthware Home Products, maker of NuWave ovens and other appliances, recently left Gurnee to expand operations in about 167,000 square feet of previously vacant leased space in Libertyville.

Despite the recent defections, Gurnee Mayor Kristina Kovarik said she believes the village remains attractive to businesses for a variety of reasons, including the fact no local property tax is levied.

“We don't want to see jobs leave at any time,” Kovarik said. “We know our taxes are lower than Libertyville and Waukegan.”

Kovarik said Gurnee won't start trying try to lure companies by creating the special taxing districts.