Metro-East News

May 24, 2014

6 Madison County towns want to share enterprise zone

Six Madison County towns are banding together to create an enterprise zone for new development in the hopes that they'll be more successful working as a team than as competition.

Keith Moran of Moran Economic Development is coordinating the efforts of Glen Carbon, Collinsville, Maryville, Troy, St. Jacob and Highland, along with Madison County, to create an enterprise zone that spans all six towns.

Moran said Illinois only allows an enterprise zone to be created when another one elsewhere in the state expires. Thus there is stiff competition each year to get an enterprise zone approved, he said.

While six applications would be in competition with each other, Moran said Madison County leaders thought they might be more effective working together.

The enterprise zone will not be a tax increment financing district -- in fact, Moran said he wanted to underline that fact on every application. "It is not a TIF district, let me say that again -- it's not a TIF," he said.

In addition, there will be no property tax abatement, and no additional sales taxes levied in the proposed enterprise zone, he said.

That makes it different than the enterprise zone at Gateway Commerce Center, which abates property taxes in whole or in part up to 10 years, he said.

"The main incentive is usually property tax exemption, but they are choosing not to go after it," Moran said.

Instead, Moran said they will focus on other ways to use the enterprise zone to lure development. For example, companies building in an enterprise zone are not charged sales tax on construction materials, and receive some exemptions on utility taxes.

"It's going to help us compete against Missouri," Moran said. "It makes Illinois more attractive to economic development."

Each town will have an enterprise zone, but they will be connected to each other through thin strips of property. Only an 8-foot-wide strip is required to qualify, Moran said. So there will be an area in Highland targeted toward commercial and industrial development, then an 8-foot strip going down Route 40 to St. Jacob's designated area. Then it will connect into Troy, then Maryville, then Collinsville and Glen Carbon.

Glen Carbon is hoping to focus on Illinois 157 and Interstate 270, according to Mayor Rob Jackstadt. It is intended "to help create jobs and to provide new real estate taxes for our Glen Carbon residents by attracting unique-to-our-area development hopefully like the University Town development," he said.

University Town was a proposed shopping and entertainment center that was slated for Glen Carbon in 2010, but was abandoned after incentive proposals failed in the state legislature. The $1 billion, 650-acre project was to include a Legoland theme park and multiple retail outlets, including IKEA. It was estimated to create as many as 8,100 permanent jobs and 12,700 construction jobs.

But strong opposition from the mayors of the surrounding towns led to the failure of the STAR bonds legislation that would have provided hundreds of millions in sales tax refunds for developer incentives.

Jackstadt said University Town was the kind of unique development he wants to see. In addition, he said infrastructure on Illinois 157 would be a priority.

Other towns are not yet quite sure what they hope to get. Troy Mayor Al Adomite said they're still working on mapping out the area they'd like to include.

"Any community wants to offer a slew of economic incentive tools when you're looking to attract development," Adomite said. "This is just a different tool ... It gives us an opportunity to cooperatively work together for the betterment of southeastern Madison County, and that's a good opportunity."

Likewise, Collinsville economic development director Erika Kennett said the various towns will work together as a group to decide which acres, which territories will be included in their proposal. But she also wants the enterprise zone as a tool to help businesses grow. "We are looking to increase jobs in Collinsville, and spur private investment within the city, to help and retain businesses," she said.

St. Jacob Mayor Richard Schiefer said his village has no tax increment financing districts, so an enterprise zone would be a valuable tool to encourage development along Highway 40. "We'd like to see some businesses come into our city ... see something come in to increase our tax base," he said.

Moran said the credit for beginning the project should go to Madison County Chairman Alan Dunstan, who brought the various towns to the table. Dunstan declined to comment, stating that the project is still in its early stages.

Moran said they are currently targeting areas where commercial and industrial interests exist or have the potential to exist in the near future. There is a qualifying process through the state, and applications are due at the end of the year. "It's going to be a bear ... there's no guarantee," Moran said. "But there will be multiple application periods. If we're unsuccessful in year one, we have more years to apply."

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