By Elise A. Couston, Senior Managing Director at Newmark Grubb Knight Frank
The New Year and the new governor are bringing much-desired change and development to the Illinois’ Department of Commerce and Economic Opportunity. On Jan. 27, 2016, Governor Rauner signed the Articles of Incorporation to form the new Illinois Business and Economic Development Corporation (ILBEDC). This new entity has been created to have a beneficial impact on economic development in Illinois going forward.
A statement from the governor’s office tells us, that “the executive order formally establishes collaborative efforts between the Department of Commerce and the Illinois Business and Economic Development Corporation to jump start economic development in our state”.
The new ILBEDC website (www.ILBEDC.org) is entitled “Building a Better Illinois”. The description reads “The Corporation, modeled from best practices of other successful state and local economic development organizations, will laser focus on sales, marketing and exceptional customer service. The professional team that we are assembling for this new organization is tasked with working at the speed of business while maintaining a lean, efficient operation. The organization is currently in its formative stages and not yet operational
When we last spoke with Jim Schultz, he had just commenced his new position as Director of DCEO in February of 2015, and he was the guest speaker the at the SIOR luncheon. He acknowledged at that time that he had some significant work ahead of him, but he was optimistic and committed to growing business in Illinois and working with the governor’s team to make that happen.
I recently spoke with Jim again, and he answered the following questions to provide information about the objectives of new ILBEDC program:
Q: How will the ILBEDC function differently than the way DCEO has previously been operating?
A: A private, not-for-profit organization will have the ability to focus 100 percent of its time and resources on economic development. Due to the broad scope of the department, currently only 14 percent of Department of Commerce staff is dedicated to economic development activities, limiting the resources to attract and retain business. The Department of Commerce is limited by government bureaucracy and red tape – the corporation will be a leaner organization and more flexible than the Department of Commerce.
Finally, the private organization will be able to raise private funds and attract top talent, while still maintaining high standards of transparency and accountability through Department of Commerce oversight of state grants and incentives.
Q: What are the benefits that the new ILBEDC brings in working with large and small companies?
A: A more streamlined organization and process will make the corporation more nimble and responsive to customers’ needs. The corporation will be focused on great customer service and move at the speed of the businesses it serves.
Q: What are the top goals for the ILBEDC?
A: The corporation will focus on marketing, sales and customer service in order to encourage job creation, business attraction and retention, and investment in Illinois. Specific goals are still being established.
Q: What are the top challenges that the ILBEDC faces?
A: Illinois consistently ranks at the bottom of national surveys of the best states in which to do business. Illinois has earned a reputation as hostile to business, and many companies and site selectors do not even consider Illinois when deciding where to locate or expand their businesses.
Illinois lags in both job creation and investment due to an antiquated approach to marketing and business attraction. Illinois ranked 40 out of 50 states in job creation from 2009 to 2014. Meanwhile, neighboring states have benefited from flexible, focused private economic development organizations, easily overtaking Illinois in business attraction and job creation.
Q: Will the stalemate in Springfield impact the funding for new business growth in Illinois?
A: The Department of Commerce continues to work with businesses interested in relocating or expanding to Illinois.
Q: How can Illinois become more competitive in attracting new companies and maintaining those who want to continue to grow here?
A: The corporation will focus on marketing Illinois’ world-class assets, including a global transportation and logistics network, a highly skilled workforce, and an international business community. However, structural reforms to lower the cost of doing business in Illinois, including addressing workers compensation costs and the nation’s second highest property taxes, are necessary to make Illinois competitive and encourage business growth and investment.
In addition to the new ILBEDC entity, Governor Rauner also reinstated the EDGE tax credit program in November of 2015, whereby approved companies can begin working to fulfill new hirings and increased investment goals under the EDGE agreement. Only “net new jobs created” qualify for EDGE credits, and all agreements are valid for a 10-year period.
Recent companies that have been approved include:
Fabrik Industries, Inc. – Fabrik will create 25 new full-time jobs and make capital investments of $5 million, including expansion to a new facility and the purchase of equipment. The company currently employs 260+ full-time employees in McHenry.
Bell Flavors & Fragrances, Inc. – This Company currently employs approximately 180 employees at their manufacturing and R&D facilities in Northbrook. They will be expanding their facilities with a $10 million capital expenditure, thus creating 25 new full-time jobs.
Taurus Die Casting LLC – This is an Italian manufacturer of high precision zinc parts who opened its first U.S.-based operation in Rockford. They will be making a $4.4 million investment in a 44,000 square foot facility, and create 37 new full-time jobs. Taurus currently employs almost 300 people in Italy and Tunisia.
It is beneficial for industrial real estate professionals who are working with companies to select or build new locations to be aware of these new developments in Illinois that are designed to attract and maintain companies who are considering a new location here or want to stay and grow their business here.
A sincere thank you to Jim Schultz, Director of DCEO, for taking the time to talk with the Industrial Insider.