The City of Collinsville recently joined five local communities, and Madison County, in an attempt to be awarded an Enterprise Zone.
First created in 1983, Enterprise Zones in Illinois primarily provide state tax exemptions, low interest financing and employment training to businesses. Business Districts, Tax Increment Financing and Enterprise Zones are the only tools of any substance, in Illinois, to attract and retain businesses, Keith Moran, president of Moran Economic Development, said.
Collinsville City Hall / Photo by Roger Starkey
Although one major incentive of an Enterprise Zone is property tax abatement, that option will not be pursued by the group seeking the establishment of a zone that includes Collinsville, Glen Carbon, Maryville, Troy, Highland, St. Jacob and Madison County, for parts of unincorporated Madison County.
Regarding the state tax incentives received by the local communities, Moran likened it to applying for a grant that would pay dividends for 15 years (the length of newly granted, or renewed zones).
City of Collinsville Director of Economic Development/TIF, Erika Kennett said the City is pursuing the Enterprise Zone option to have all available tools to attract and retain businesses.
“There aren’t many tools available in the state, especially for our region,” Kennett said. “Having access to those Enterprise Zone benefits allows us to have that competitive advantage, especially if we’re in competition for a project where they’re looking on both sides of the river.”
There are currently 97 Enterprise Zones in the state and, by state law, no additional zones can be created. A bill (HB6217) was introduced in the Illinois General Assembly, as part of the Republican job creation package, for an additional 50 zones to be created. The bill is currently in committee.
Of the existing zones, about 75 percent are expiring by 2018, Moran said. No special preferences will be given to existing zones for renewal, opening the process up to communities all over the state.
There are seven current zones in Madison and St. Clair counties, against which Collinsville competes to attract and retain business. Members of the zones include nearly all surrounding communities. The Gateway Commerce Center in Edwardsville, U.S. Steel in Granite City and the Gateway Motorsports Park in Madison are nearby beneficiaries of Enterprise Zones, Moran said.
With the six communities and Madison County on board with the project, Moran Economic Development now begins the lengthy application process, which must be completed by Dec. 31, 2014. Grants will be announced in September 2015 for the zones that go into effect Jan. 1, 2016.
Preference will be given to applicants whose zones meet several criteria, some of which include a high unemployment rate, an ability to create or retain 1,000 jobs due to investments of $100 million or more, high poverty rates, recent downsizing by a large employer, large amounts of vacant commercial or industrial structures and ability to demonstrate a plan that will significantly increase the state or local governments tax base. The criteria applies only to the 15 total square miles among the communities that can be designated as an Enterprise Zone, and the not the communities as a whole.
If the zone is granted to the group, it will be for 15 years and Collinsville will then compete with, and work, with other communities in the zone to attract and retain businesses. Despite the chance for competition within the zone, Councilman Mike Tognarelli said the city is in a better position if it is in the zone.
“If we’re not in it, we’re beaten out already,” Tognarelli said.
The group would be able to apply for renewal before the 15-year period endings.
The City will pay $9,000 to Moran Economic Development to handle the application process. In a special meeting of the city council to discuss becoming a member of the Enterprise Zone application group, City Manager Scott Williams called it a great opportunity.
“For a very nominal fee, we have a chance to drastically influence the growth of Collinsville,” Williams said.
