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ADM closer to getting special incentives to keep headquarters in Illinois

SPRINGFIELD (MCT) — State lawmakers Wednesday took a step closer to granting special incentives to companies seeking thousands of dollars per job created or retained in Illinois.

Agricultural giant Archer Daniels Midland Co. is seeking $5,000 per job per year, chemical distributor Univar Inc. almost $3,000 and OfficeMax, which became Office Depot after its merger this week, $1,570.

All the companies are seeking to collect their employees' tax withholdings instead of forwarding them to the state. The reason for the requests is that companies have years in which they have little or no state tax obligation and can't take advantage of incentives negotiated with the state.

The ADM measure would tie incentives to 300 jobs: moving 100 jobs from Decatur, where it's based, to the company's new global headquarters, and creating 100 jobs at the headquarters and 100 jobs in Decatur. The company would also be required to fill 100 positions annually in Decatur for five years, including jobs created because of retirements. The incentive will total about $1.5 million a year for 15 to 20 years, a company spokeswoman said.

Sen. David Luechtefeld, of downstate Okawville, asked during a Senate committee hearing whether ADM would guarantee it would keep its headquarters in the state if the measure is approved.

"I don't know about the guarantee part," said Greg Webb, ADM's vice president of government relations.

He later added: "I'm going to tell you that we have a preference for Illinois."

ADM has said it plans to retain a workforce of 4,400 in Decatur, but the measure doesn't include language that requires the company to keep that promise. The company is said to prefer Chicago for its new headquarters, although it has entertained offers from other states.

At the same hearing, Office Depot interim co-CEO Ravi Saligram said a new proposal requiring the company to create 200 jobs in the state, in addition to retaining 2,050, would cost Illinois $53 million over 15 years.

Saligram said the newly merged company is also seeking incentives from Florida before deciding where to locate its new corporate headquarters. Office Depot, which merged with Naperville-based OfficeMax, employs 1,700 at its Boca Raton, Fla., headquarters.

Office Depot already has a multimillion-dollar package of incentives with Florida and Palm Beach County based on job creation.

An official in Palm Beach County said Wednesday that she's talking with city, county and state officials about potential additional incentives.

Florida won't let Office Depot go without a fight, she said.

"Are we serious about it? This is one of our major employers. It would be a huge loss not only to Boca Raton, but to our economic development efforts," said the official, Kelly Smallridge, president of the county business development board.

Saligram said he didn't know the value of the incentive package the company's other interim co-CEO, Neil Austrian, is seeking in Florida.

"We just want both states to put their best foot forward," Saligram told a Senate committee.

The ADM and Office Depot proposals moved to the full Senate. Approvals would send them to the House.

Separately, House lawmakers Wednesday approved a bill that paves the way for chemical distributor Univar Inc. to receive incentives worth $5 million over 10 years. The Redmond, Wash.-based company is considering moving its headquarters to Downers Grove, said Rep. Michael Zalewski, D-Riverside, the sponsor of the bill.

Zalewski said Univar is different from other companies seeking incentives because it's considering moving its headquarters to Illinois.

Univar declined to comment until "all is finalized."

The bill, which needs Senate approval, would allow the company to keep its employees' personal income tax withholdings if it retains at least 100 full-time jobs in Illinois and creates at least 69 jobs.
Lawmakers have criticized such deals for individual companies but continue to approve them.

Rep. Jeanne Ives, R-Wheaton, attached an amendment to the Univar bill that would expand the state's tax credit program to all companies in Illinois' main economic development program. That would mean companies could collect their employees' taxes instead of forwarding them to the state.

In an interview, Ives said only large companies that can hire lobbyists ask for the tax breaks. Small businesses, she said, are locked out.

"If we enhance (the program) for one company, it is good for all," Ives said.

Rep. Jack Franks, D-Marengo, a critic of the special incentives, urged lawmakers to reject the bill during a short debate.

"There is no evidence that this is a good deal for the state," Franks said.

• Tribune Newspapers reporter Marcia Pounds contributed.

(c)2013 the Chicago Tribune
Distributed by MCT Information Services

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