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02.14.2014

Exclusive: City of Pekin prepares for state regulation changes

Excel Foundry recently expanded and received help through the enterprise zone. Pekins enterprise zone expires in 2016 and the rules to reapply have changed. The city of Pekin must combine with other municipalities if they want to get a new zone designation, officials say.s enterprise zone expires in 2016 and the rules to reapply have changed. The city of Pekin must combine with other municipalities if they want to get a new zone designation, officials say.

Pekin, Ill. - The state of Illinois is changing its enterprise zone regulations, and local municipalities are banding together to make sure they get their piece of the enterprise zone pie.

Pekin’s enterprise zone was established in 1986; it was extended in 2006 and is scheduled to expire in 2016. The enterprise zone provides incentives for businesses to locate to Pekin, such a tax abatements for projects over $25,000, a state sales tax waiver for materials bought in the state to build the business and a city waiver of permit fees for the project, said Pekin Economic Development Director Leigh Ann Matthews.

Recent projects in Pekin’s 8.44-mile enterprise zone have been SJ Smith, Ray Dennison Chevrolet, Henderson’s Funeral Home, Johnson Mechanical, Powerton, NTS Services, Excel Foundry and other downtown and Riverway Business Park businesses.

The state looks at a municipality’s unemployment rate; employment opportunities; poverty level; abandoned coal mines, brownfield or federal disaster areas; large-scale business closings; vacant structures; tax base improvement plan; public infrastructure improvement plan; career skills programs; and equalized assessed valuation.

A brownfield is land that has been used previously for industry or commercials purposes that needs to be cleaned up before it can be reused.

The state of Illinois has 97 enterprise zones, which is a statutory limit. The state is changing its entire approval process for the zones. There are 49 zones expiring in 2016, and Pekin is one of them.

The Pekin City Council and leaders in the other municipalities involved are considering the use of a consultant to help establish the new boundaries for a joint enterprise zone and to prepare all of the paperwork that has to be sent to the state, such as the applications and supporting documentation. Not only will the city be competing for enterprise zone status with the 49 expiring enterprise zones, but also with municipalities that are applying for the first time.

The state’s new enterprise zone approval process involves a board comprised of two Cook County appointees, a downstate appointee and a governor’s appointee, said Pekin Assistant City Manager Darin Girdler.

“We have to reapply, and there is going to be a lot of competition for it,” said Girdler. “We are doing what we can to position ourselves in the best way to put our best foot forward by possibly teaming up with Morton and Tremont. Tremont doesn’t have an enterprise zone.

“It is an extremely important economic development tool.”

To the north, East Peoria, with its 6.46-square-mile enterprise zone, Washington, with its 3.29-square-mile enterprise zone and hopefully two other communities will team up as well.

“We need four governments so that we can qualify for a larger district of 15 square miles,” said Girdler.

Girdler said that the city has a couple of consultant proposals.

The Pekin Tazewell Enterprise Zone has 8.44 square miles in it, which includes some of the unincorporated areas of Pekin. Morton has 4.62 square miles.

The municipalities and the county would split the cost for the consultant, for which the total cost would be approximately $100,000. Girdler estimates that the city of Pekin’s portion would be approximately $20,000. The amount a municipality pays is based on the number of square miles it has in the proposed enterprise zone.

If Pekin, Tremont, Morton and the county team up, the four entities would then be one large enterprise zone. Girdler said that each municipality would be able to act independently of the other municipalities within its own borders. At least four governing bodies have to be involved to get the 15-mile zone.

Pekin has the largest enterprise zone in the county. Matthews said that there are some areas that the city can cut from the enterprise zone that have, over the years, become residential areas.

Areas that have been developed for industry that are in the enterprise zone will remain there because enterprise zone perks would help those businesses to expand, said Girdler.

Pekin can connect with Tremont via Illinois Route 9 and connect Tremont to Morton via Interstate 155. The Tremont Village Board will discuss its possible enterprise zone later this month.

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