Elgin approves incentives for 2 businesses
Two economic incentive agreements passed through the Elgin City Council Wednesday, though one of them was approved somewhat grudgingly.
Bystronic Inc., a Swiss machine tool company, announced last winter it would relocate to Elgin. The company has since completed a new building on Airport Road, hired employees and opened its North American headquarters — all while the economic incentive agreement was still pending.
Councilman John Prigge expressed concern Wednesday, as he has before, that the city is offering incentives to a business after it already chose Elgin. He did not approve of the $85,000 in cash payments offered for hiring employees or the fact that there is no requirement that those hired live in Elgin.
Mayor David Kaptain also said he did not like the cash payouts but said the council should approve the agreement because Bystronic moved here only after negotiating in good faith with city staff members.
“To undercut them at this point would be devastating,” Kaptain said.
Council members saw the results of an economic impact analysis at the last meeting that indicated as much as $17 million per year in direct and indirect economic activity based on Bystronic’s operations.
Though Prigge said it would take seven years to recover the costs of the agreement based on property tax revenue, Councilman John Steffen said there were many other factors contributing to the millions the Incentis Group estimated.
“Even if they’re off by half, it is still way beyond what I consider necessary to go along with this,” Steffen said.
The agreement calls for up to $85,000 in job grants and $82,000 more in waived permit fees. It also allows for two complimentary golf memberships.
The council approved the agreement 6-1 with Prigge the only dissenter.
An agreement with Pancor Construction and Development was tailored to the tastes of this particular council and does not include giving the company any taxpayer funds. It includes a 40 percent discount on permit fees, which should save the company $78,000. It is still expected to owe the city $117,000 in permit fees with the agreement.
Though the council approved these incentives unanimously, Prigge did share concerns at granting incentives for the construction of an empty building in a time when other big buildings are vacant.
According to the Elgin Area Chamber of Commerce, the goal of this construction is to provide appropriate industrial space that is actually lacking in Elgin.
Councilwoman Anna Moeller said the commitment by the developer to spend millions on the project shows its prospects.
“I don’t think this is going to be a vacant building for long,” Moeller said.
The agreement with Pancor was the first negotiated based on the preferences of the current council, led by a new mayor and including two new council members. Future incentives are expected to mirror this one — leaving out cash payouts in favor of fee waivers and complimentary memberships.