Elgin OKs economic incentive agreement with Sears

Elgin City Council members approved an economic incentive agreement with Sears Holdings Corp. on Wednesday that will guarantee up to $66,000 for creating well-paid jobs and reimbursement of up to $24,000 in permit expenses.

The agreement was tabled at the May 25 meeting because of a discussion of such incentives at a council retreat that took place Friday.

Economic incentives are negotiated by city staffers long before they come before the council. Two new members and a new mayor mean a new dynamic for the governing body. The discussion allowed council members to air concerns and will give staff members a chance to alter what has functioned as an ad hoc, informal policy.

At the retreat, Councilwoman Anna Moeller said Elgin is in a fortunate position to be able to discuss economic incentive agreements as other communities have not attracted the businesses for which to debate them.

“This is kind of a good problem to have,” Moeller said.

Moeller advocated offering incentive agreements if there is any economic benefit at all, though other council members were less unequivocally supportive.

In the end council members informally decided to allow the staff to move forward with four pending economic incentive agreements, including the one with Sears. But they did discuss some concerns for future changes.

One standard element of economic incentive agreements is money for hiring well-paid employees. In Sears' case Elgin offered $1,000 for every employee earning more than $35,000 per year plus an extra $500 for Elgin residents.

Councilman John Prigge is opposed to using tax dollars to pay a company hiring non-Elgin employees. But Councilman John Steffen said a majority of Elgin residents work outside the city and a majority of Elgin employees live elsewhere.

“We're fighting against culture in requiring them to hire Elgin people,” Steffen said.

Councilman John Prigge also brought up the desire to require any companies accepting economic incentives to use e-Verify — a request Bill Cogley, Elgin's corporation counsel, said would be illegal.

Elgin already requires that employees of such companies be lawful residents of the United States, but state law prohibits any requirements for e-Verify in any contract.

Assistant City Manager Rick Kozal takes the lead in negotiating economic incentive agreements for the city. He said staff members are taking council preferences into consideration in preparing a formal policy to structure future agreements.

The Sears agreement passed through the council with Councilman John Prigge as the loan dissenter.