DeKalb City Council approves tax incentive package for international confectioner

DeKALB – The DeKalb City Council on Monday approved a package of tax abatements as part of a months-long effort to entice a coveted international confectioner looking to put down roots in DeKalb, and was for the first time greeted by a representative from the company.

Jack DiNardo, of the location incentives group for Coldwell Banker Richard Ellis, spoke on behalf of the development, dubbed “Project Hammer,” that could bring 1,000 full-time jobs to DeKalb.

“On behalf of Project Hammer, I would like to thank the entire council for their consideration of this resolution, as well as the next one because they’re critical to the company’s site selection efforts,” DiNardo said. “I’d also like to thank City Manager Bill Nicklas and his team for their help to get us to this point.”

DeKalb is competing for the bid against a similar-sized city in Wisconsin. A 15-year property tax and utility tax abatement plan was approved unanimously by the council. Each agreement will abate 50% of the property and utility taxes for the first 15 years that the three-building manufacturing and distribution center will sit on the 343-acre site between Route 23 and Gurler Road in the ChicagoWest Business Center. City staff estimates the development will raise $69 million in unabated property taxes over the first 15 years, and $450,000 a year (once the site is in full power) in unabated electrical utility taxes, documents show.

By comparison, the combined total property tax revenue of the five major companies in Park 88 – Target distribution center, 3M, Panduit, Goodyear and Nestle – in that 15-year period, is estimated at $78 million.

Nicklas is working to get the DeKalb Park District, DeKalb School District 428, the DeKalb Library District, DeKalb Township, Kishwaukee College District 523 and the Kishwaukee Water Reclamation District to agree to the same property tax deal, which over the first 15 years would provide them with $34.5 million in property taxes to be split relative to their tax rates, documents show.

Nicklas said he’ll solicit support over the next week and a half. The DeKalb County Board already has approved the measure.

The agreement includes clawback provisions that require the company to hire a certain threshold or else give back a portion of the incentive, documents show, a stipulation Nicklas said the confectioner embraced. They’ll have two years to reach 1,000 jobs, and if they drop below 80% of that, they’ll have to give back a prorated share of the tax abatements. If they fall below 50%, the abatement will be suspended, documents show.

“We’re been talking about this for years,” Nicklas said of the workforce potential. “The creation of career jobs that can support families, invite people to come to DeKalb to start their homes, their lives, or to continue them here.”

Gerald Blazey, Northern Illinois University’s vice president for research and innovation partnerships, spoke on behalf of NIU President Lisa Freeman, and said NIU is in full support of the project and the potential it has for student careers, especially with the incoming Northern Illinois Center for Community Sustainability.

“NIICS is supposed to promote job creation and workforce development, and we see a partnership with Project Hammer as an important component of that mission,” Blazey said. “Collaboration with a major member of the food manufacturing sector will be natural, fruitful and strengthen our community.”

Second Ward Alderman Bill Finucane spoke directly to DiNardo and asked him to convey a message to the confectioner, since negotiations still are ongoing.

“We really want you to come to DeKalb,” Finucane said. “I think you’ll find it an appropriate place for you to be, with our great transportation, great education, and we hope we can do anything we can to convince you to do that.”

Finucane’s message was echoed by many on the council, along with praise for Nicklas and city staff for their efforts thus far.

“We have a city manager who continues to perform extraordinary service to this community,” Mayor Jerry Smith said. “The time you spent working on behalf of all of us, all of the community, is to be commended.”