Big companies like Boeing always make big headlines. So when the aerospace firm decided to locate its new global headquarters in Chicago, word spread fast. Governor George H. Ryan's recently-signed Corporate Headquarters Relocation Act, which channels state incentives in the direction of large companies that relocate their headquarters to the state, got to share its success story with the world. Boeing's decision helped focus attention on Chicago's advantages: the fact that O'Hare International Airport, one of the busiest airports in the world, was recently recognized as the best airport in North America by international passengers surveyed by Business Traveler magazine; the fact that 13 port districts in the state provide direct links to the Atlantic Ocean and the Gulf of Mexico; and the fact that the state's six foreign trade zones offer low-cost production and warehousing facilities.
What the splashy headlines don't always mention is that Chicago is also a great place for small- and medium-sized companies, and that one of the city's main economic development policy objectives is to retain existing firms.
For example, Chicago offered generous incentives to Wheatland Tube to help it expand and create 50 new jobs. Wheatland Tube, the city's largest producer of electrical conduit and galvanized mechanical tubing, will invest $23 million to build a 161,000 square foot warehouse and a 40,000 square foot addition to its existing manufacturing facility.
The company had considered expanding its Little Rock, Ark. plant, but chose to expand the Chicago facility instead because of the city's financial incentives, including property tax incentives that will save the company about $2.8 million over 12 years.
Chicago's incentives also helped a candy maker expand and add 16 new jobs to its payroll of 170. The city offered Primrose Candy Company a $4 million Industrial Development Revenue Bond, which is expected to save the company $1 million in interest payments over 20 years.
Another example is the Alstyle Apparel and Activewear Manufacturing Co., which began in 1976 in Chicago as a small importer of T-shirts for local screen printers. Today, the company produces its own T-shirts and has mills in four cities in the U.S. and Mexico that together produce more than 500,000 T-shirts a day. When the company outgrew its Chicago facility, the city offered to help it expand.
Alstyle will invest $18.2 million to move into an existing 367,000 square foot manufacturing facility in the North Side, retain 266 jobs, and create an additional 182 jobs. The city will help Alstyle secure a tax incentive that will save the company about $2.5 million over the next 12 years. Also, Alstyle's new facility is located in an enterprise zone, which makes it eligible for additional city and state tax credits.
"We provide good, stable jobs to our employees and we're thrilled to be expanding into this renovated building with the help of the city's business programs," said Alstyle owner Amin Amdani. "We've received calls about moving out of Chicago, but we are committed to the city. We're true-blue Chicagoans."
Chicago is also helping Keebler expand its ice cream cone production plant. The cookie and cracker manufacturer will consolidate two plants into one, tripling the size of its 78,000 square foot facility.
"Combining these two plants to create a larger, more efficient, more capable plant is a significant step forward in our growth plans," said Carlos M. Gutierrez, chairman and CEO of Kellogg Company, which owns Keebler.
The "partnership" includes $2 million in tax increment financing with which the city will provide Keebler, as well as an enterprise zone sales tax abatement initiative, and additional tax incentives that together could add up to more than $1 million in savings.
The Metro Area
The same advantages that attract and retain companies like Boeing and Keebler make the Chicago area ideal for manufacturing and distribution facilities.
Rollex, a manufacturer of aluminum siding, has been in Elk Grove since 1956 and is in the process of renovating its third building. Tritech is also working on its third building in Elk Grove. The company manufactures robotics and finds a good many suppliers and customers close to home.
Like Elk Grove, Arlington Heights is in the Chicago metropolitan area and is home to nearly 4,000 businesses. The Village of Mount Prospect lies 22 miles from downtown Chicago and just five minutes from O'Hare International Airport. It is home to such large corporations as Braun Manufacturing, Hyundai, NutraSweet, and United Stationers.
Another outlying Chicago community is Naperville, where Tellabs has grown tremendously. Not long ago, the company, which designs, manufactures, markets and services data, voice and video transport, switching/routing and network access systems, invested $75 million to expand in Naperville and create 2,300 new jobs.
"Tellabs is committed to the state of Illinois and to growing its operations along the high-tech corridor," said Tellabs President and CEO Michael J. Birck.
When United Asset Coverage, Inc., a provider of integrated telecommunications and data networking maintenance services, outgrew its space, it decided to move to a larger, 26,000 square foot corporate headquarters location within Naperville. The company started in 1997 and is now doubling its size and adding up to 80 new jobs over the next two years.
UAC is eligible for Industrial Training Program grants to train existing and new employees, as well as tax credits through the Economic Development for a Growing Economy (EDGE) program.
For its part, the Illinois Department of Commerce and Community Affairs will offer EDGE tax credits and training funds through the Industrial Training Program.
As aggressively as Chicago works to attract large companies like Boeing, the city is equally focused on attracting and retaining its smaller companies. Large or small, they all contribute to the city's thriving economy.
Ann Morris is a freelance business writer in Leawood, Kan.
Means the article is accessible only to our magazine subscribers.
