An important economic development tool in the Illinois Quad-Cities is not being renewed by the state, area officials said Tuesday.
Last week, a board within the Illinois Department of Commerce & Economic Opportunity, approved a half dozen applications for enterprise zone designations, but the Quad-Cities' request was not among them. The existing zone here expires at the end of next March.
The Illinois Enterprise Zone program offers a range of benefits to qualified new and existing businesses, including a break on taxes paid on building materials and an exemption on the state utility tax for electricity and natural gas. An investment tax credit also can be obtained. In addition, local incentives are often paired with the state's investments.
A state report said that in 2014, Illinois had $2.4 million in tax spending within the Quad-City zone, which saw $84 million in capital investment.
"For anybody looking to invest and expand, its impact was absolutely tremendous," said Henry Marquard, director of government relations for the Quad-Cities Chamber of Commerce.
The Quad-City application was filed by the Bi-State Regional Commission for a zone that includes 12 square miles of commercial and industrial land within Rock Island, Moline, East Moline, Silvis, Milan and unincorporated Rock Island County. Denise Bulat, executive director of the commission, said the area has maintained the designation for years.
"It matters. It's one of the main programs in the state of Illinois that helps businesses," Bulat said.
Deere & Co. has invested nearly $1.1 billion in buildings, machinery, equipment and other assets within the zone over the last 10 years, according to a 2016 letter from the company that was part of the Quad-City area's application. "Many large and small companies, including Deere, have benefited from the provisions of the enterprise zone by improving and investing in facilities that help sustain employment for area residents. We remain optimistic that the enterprise zone can be renewed in 2018," Deere spokesman Ken Golden said in an email this week.
The enterprise zone program is aimed at stimulating economic growth and neighborhood revitalization in economically depressed areas, according to the program's web site. Among the factors considered in granting an application are an area's unemployment and poverty rates, the potential for job growth and a history of large scale business closings or downsizings.
Bulat said the Quad-Cities got low scores, relative to other applicants, on items like poverty and job loss categories. "The competition was tough," she said.
A spokesperson for the state department of commerce and economic opportunity, Leslie Strain, confirmed Tuesday the Quad-Cities' application was not approved by the state's enterprise zone board.
"However, the new application cycle will open in early October and close on the last business day of December 2017. The Quad-Cities is welcome to reapply at that time," she said.
Local officials said Tuesday they did not think they could apply until next year. However, even if another application were to be approved this year, there is concern there will be a significant gap in time between when the existing zone expires and a new one would reopen.
In the meantime, local officials are seeking to replicate the benefits the state program offers. "We think we can protect those benefits and use those for some of our projects going forward," said Moline City Administrator Doug Maxeiner.
There still are questions about how that would work, such as how those benefits would be financed.
The state enterprise zones were first established in the early 1980s. The Bi-State Regional Commission says there are 97 enterprise zones in Illinois.