Wednesday, December 10, 2008
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City discusses enterprise zone extension for mine

Council weighs remaining miles against economic benefit to area

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[December 10, 2008]  On Tuesday evening Lincoln officials resumed a discussion of a request to have the Lincoln and Logan County Enterprise Zone amended to include territory that would allow the expansion of the Viper mine in Elkhart, now owned by International Coal Group Illinois, LLC.

The coal mine was established in 1982. Their current expansion underground would mostly extend into Sangamon County, and the mouth where the coal comes out would move to Sangamon County.

The mine is offering to pay the city $10,000 a year until the end of the enterprise zone in 2017. The same amount would be paid to Logan County.

City attorney Bill Bates said: "I remind you that the enterprise zone administration fee can only be used with such matters as related to use for the enterprise zone. I also remind you that you are using up your capacity for enterprise zone."

While the mine is requesting 2.48 square miles, enterprise zone manager Phil Mahler said that another unused 1.5 square miles would be added back in at the same time. "You'll be down to 4.17 square miles, which is 2,600 acres," he said.

Mahler said that he'd like it if somebody came and said they needed 4 square miles, but the biggest need we've seen around here previously has been only 1 square mile. He said that there is also another 3 square miles, which was put aside in hopes of interesting Monsanto or another industry in using land along Route 66 to the north of Lincoln, that can be brought back in if it is not used.

Bates told council members to keep in mind the big picture. What the city derives from this is negligible compared to what the people gain who want it. "The purpose of the enterprise zone is to attract business to our community and then derive employment benefits and revenue benefits to our community. That's not what really happens when you extend the enterprise zone to Monsanto, the wind farm and for ICG," he said.

The controller for the coal mine, Victoria Kennedy, addressed the council. She explained, "Our coal mine is 20-some years old, and the reason we finally got approval from our corporate office in West Virginia to proceed with this very expensive capital expenditure -- where the production tap is, where the coal comes out of the ground, the fear is that the mine could squeeze shut." She added that this isn't going to happen tomorrow, but the possibility is there. "There would be a collapse that would be beyond economic feasibility to repair," she said.

She added, "We've been working over a decade to get this approved, and we're very excited about it. We would also appreciate the assistance of the state of Illinois, the county of Logan and the city of Lincoln in signing this agreement."

A representative for the mine's enterprise zone process, Andy Hamilton, spoke, saying: "This is a Logan County business. They have over 260 employees. They have a payroll that exceeds $10,000,000 a year. So, there's significant economic impact. The actual annual impact exceeds $750 million."

Bates agreed, but brought out that the new development would shift benefits more to Sangamon County. Where the coal comes out of the mine is who gets the sales tax from its sale. Currently that is in Elkhart. Elkhart is getting 1 percent, which amounts to $600 to $700 a month off it. Logan County has been getting 0.25 percent. Once the improvements are made and the mouth of the mine moves, that sales tax will go to Sangamon County.

Rohlfs shifted the discussion and asked what the $10,000 fee could be used for.

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Bates recalled comments that some communities have used the fees for economic purposes promoting the enterprise zone. Arguably some of it can be used for that purpose within the enterprise zone, he said.

Hamilton's interpretation was broader, and he said that other communities are able to use their debt fee for their economic promotion activities.

Marty Neitzel, acting mayor for the evening, questioned how far south the business would be moving.

Kennedy said that it would stay just north of Williamsville.

Bates asked how the operation's offices might be affected and if it could have a property tax impact.

Kennedy said that the offices in Williamsville would probably be closed and sold. The facilities where processing takes place in Elkhart would remain in full operation just as they are now: cleaning, storing and transferring coal from that location.

Hamilton concluded his comments by saying: "How many companies are doing a $20 million expansion? With the way the economy is, it's kind of nice that somebody's maybe spending money in this county."

The village of Elkhart passed ICG's enterprise zone request unanimously Monday evening. The Logan County Board passed it unanimously Nov. 18.

The matter comes to a vote before the Lincoln City Council next Monday.


The Lincoln and Logan County Enterprise Zone was begun in 1986 and renewed in 2007. Enterprise zones were created by the state of Illinois as a means for small communities to attract businesses and create jobs by offering economic incentives. Each enterprise zone can be up to 15 square miles and is renewed by the state every 10 years. The program may or may not be continued by the state in the future.

Lincoln/Logan County Enterprise Zone
Incentives for Capital Improvements

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