Unemployment, retail vacancy down in Elgin

Elgin's unemployment is down and its retail vacancy rate is at its lowest in 12 years, which means things "are looking good" for the foreseeable future, Elgin Development Group officials told the city council.

In the last year, about 30 businesses started or expanded leases in Elgin totaling 1.6 million square feet, Tony Lucenko, economic development director for the Elgin Development Group, said Wednesday. The group is working with 17 more businesses that are looking at occupying another 1.7 million square feet of property, Lucenko said.

The city's unemployment rate hovers between 4 and 5 percent, Lucenko said. "Things for the foreseeable future are looking good," he said.

Data from the Illinois Department of Employment Security shows unemployment in Elgin was 4.6 percent in February, down from 6 percent in February 2017, mirroring a decrease in 12 other metropolitan areas across the state. Businesses added jobs in 11 metro areas, with the largest increases in Rockford, Kankakee and Elgin, the latter with 6,300 jobs.

The group uses data compiled by CoStar, a commercial real estate information company with listings of more than 5 million properties across the country.

Elgin's retail vacancy rate in 2017 was 4.3 percent, an all-time low since 2006, CoStar data shows. The industrial vacancy rate was about 11 percent - it was 8 percent in 2006 - and the office vacancy rate was about 21 percent, compared to 15.5 percent in 2006.

When compared to area suburbs, "Elgin is not unique with how vacancy performed through the recession and coming out of it," CoStar market economist Brandon Svec said in an interview.

Vacancy rates in Elgin have fluctuated the last 15 years, but jumps shouldn't cause concern if they are tied to new construction, Svec said, pointing out one industrial building can add millions of square feet. Vacancy rate increases in the 2011-2013 post-recession period - when the supply remained the same - were more concerning, he said.

City council members also were told the Elgin chamber will be involved in the expansion of high school career academies at Elgin Area School District U-46, expected to be in place by the 2020-21 school year. Students will have access to internships, job shadowing, business tours and business presentations, Elgin Development Group Director Bob Malm said.

The city of Elgin has a $275,000 yearly contract for economic development services with the Elgin Area Chamber of Commerce, which funnels the money to its in-house Elgin Development Group.

This was the group's second presentation this year to the city council, and City Manager Rick Kozal said he expects that to continue quarterly. That's a significant change from the past, when presentations typically took place before contracts were up for renewal. The current contract ends in December 2019.

"(Kozal) suggested maybe we give more frequent presentations, and that's a great idea. We thank them for that," Lucenko said. "It's good for us, and good for them, to show accountability and transparency."