Snag threatens to unravel enterprise zone extension to Formosa and Elkhart

[OCT. 13, 2004]  City attorney Bill Bates received a call last Friday from Formosa representative Steve McClure saying that there is a problem with the new enterprise zone agreement. The new extension incorporates corridors to property in Sangamon County and Elkhart.

First the agreement won approval with the Logan County Regional Planning Commission. Then it went on to all the participating parties for approval. Sangamon County, Logan County and Lincoln have all approved the agreement. All that remains is approval by the village of Elkhart, and then the measure would go on to the state enterprise zone commission for final approval.

Lincoln not only passed the agreement but also an ordinance. Their agreement was drafted with stipulations that neither Sangamon nor Elkhart would have power to add or remove any properties from the Lincoln/Logan County Enterprise Zone. That initiative would remain with Lincoln and Logan County only and would not only serve to expedite future additions, but also allow Lincoln and Logan County to retain control of the Lincoln/Logan County Enterprise Zone.

McClure was contacted by the Elkhart consultant, who said that Elkhart officials would be turning down the contract at their monthly meeting tonight (Wednesday, Oct. 13). They do not like the wording added by Lincoln that if their enterprise zone does not get developed, it could possibly be removed by vote of Lincoln and Logan County.

Bates said he raised the question to the McClure, "How is Elkhart any better off if they let this proposal get away? Because if this gets away, they have no enterprise zone, for Corn Belt or anybody else."

Bates said that he also responded to a comment of possible animosity toward Elkhart. He said that in his three years as city attorney, sentiments toward the village of Elkhart have always been nothing but cooperation and good-neighbor sentiments.

Brief facts and history

The request for the extension of the Lincoln/Logan County Enterprise Zone to specific properties in Elkhart and Sangamon County was represented as an intention to allow Corn Belt Energy to locate a power plant at Elkhart and Formosa to rebuild and expand its plant in Sangamon County.

Once a business begins building on a site, that enterprise zone designation is locked in for the duration of the whole enterprise zone. The Lincoln/Logan County Enterprise Zone is slated to renew in 1997 for another 10 years.

When an enterprise zone is granted, it is for the property, and whatever business is located on that property has enterprise zone advantages. If Corn Belt Energy did not locate the plant there, Elkhart would still have the property to market for some other industrial use.

This poses a potential drawback to Lincoln if another industry considering locating in Lincoln or Elkhart might choose to go to Elkhart instead. There is one such entity currently looking at both places.

However, according to McClure, Logan County Board Chairman Dale Voyles indicated that in the interest of economic development in the county, the county would be supportive of keeping an enterprise zone once it is already established at Elkhart or for any other community in the future.

Timely

McClure is concerned with getting the extension passed quickly. The conduit in getting the Lincoln/Logan County Enterprise Zone approval from the state is based on unemployment rates of the proposed areas. These rates are improving and could jeopardize this particular plan.

Bates said McClure told him that he would like to see the agreement pass as originally proposed with a new side agreement between Lincoln, Logan County and Elkhart that the property in Elkhart will not be removed from the enterprise zone without Elkhart's permission.

Concern for the loss of this development opportunity reigned with further discussion. Bates said he is concerned for the success of Formosa and Corn Belt, which promise many benefits and big returns to the communities in property taxes, retail and jobs.

On next week's agenda

Mayor Beth Davis said: "I personally don't harbor any ill feelings against Elkhart or anyone else. I would agree to amend a side agreement with Elkhart and get the project moving. If people mess around here, we might lose the whole thing. That's not good, not good."

In summary, Elkhart is asking that any property approved for enterprise zone in Elkhart not be removed without their approval, Bates said.

Aldermen Benny Huskins and Verl Prather chimed in simultaneously, "I don't have a problem with that."

City zoning and ordinance chairman Patrick Madigan proposed that the new side amendment be put on next week's agenda to "vote positively."

A straw vote of the council indicated only one possible vote against the proposed amendment.

[Jan Youngquist]