Southeastern Wisconsin can compete against northern Illinois for business, because the Badger State’s taxes are lower, its workforce is better trained, its land is cheaper and it is easier to get around.
That assessment was made by CenterPoint Properties Trust chief executive officer Michael Mullen at a BizTimes Commercial Real Estate & Development Conference a few years ago.
Indeed, in recent years, Kenosha County has attracted several businesses from northern Illinois that have relocated or expanded north of the state line.
Companies that have moved to Kenosha County, or expanded into facilities there, include: North Chicago-based Emco Chemical Distributors Inc.; Atlanta-based Brightree LLC which moved its operation from Antioch, Ill.; Rolf’s Patisserie Inc. of Lincolnwood Ill.; Uline Inc. of Waukegan; Coleman Cable Inc. and Rust-Oleum.
Lower costs and tax exemptions were major reasons these companies moved to Kenosha County.
Wisconsin state and local officials have the ability to offer incentives for businesses that are sometimes too enticing to resist, said B. Dwight Houchins, president of the Lake County (Illinois) Chamber of Commerce.
“Businesses simply have to follow the money, particularly in this economy,” Houchins said. “The Wisconsin governor (Jim Doyle) is very much a part of enticing businesses of Lake County to expand into Kenosha. He’s very active in offering different incentives on energy efficiency that sometimes make it hard to refuse.”
Houchins previously served on the Economic Development Commission for Portage County in Wisconsin.
“Twelve years ago we were already actively looking at companies in Northern Illinois to try to get them to jump the border,” he said. “The process has continued and even become more aggressive over time.”
“We have a huge bull’s-eye on our back here in Lake County,” Houchins said. “We are a fast-growing region that is also a fairly wealthy area in terms of net worth.”
The Village of Pleasant Prairie in Kenosha County has provided access to tax-exempt bonds for projects to attract businesses to the community. Rolf’s Patisserie, a gourmet bakery, received $10 million in tax-exempt bonds to purchase and renovate a 56,000-square-foot facility at 10100 88th Ave. in Pleasant Prairie. EMCO Chemical Distributors received $10 million in tax-exempt bonds to assist in customizing a 260,000-square-foot facility at 8601 95th St., in Pleasant Prairie.
Earlier this year, the Kenosha Area Business Alliance (KABA) provided financing for Atlanta-based Brightree Inc., to move its medical billing operations from Antioch, Ill., to Paddock Lake, a village in western Kenosha County.
“The revolving loan fund programs we administer are designed to provide gap financing to assist economic development projects that sustain and grow the area’s economic and employment base,” said Todd Battle, president of KABA.
Wisconsin is doing a good job of attracting certain kinds of businesses, said Houchins but he said another reason companies are moving north of the state line is that Illinois is not doing enough to keep them there.
“We win some battles, but the fact of the matter is we need to keep businesses in the state of Illinois for the tax revenue and to grow and prosper,” Houchins said. “The state has helped to a certain extent, but my feeling is we need to do more. The tax climate for businesses under our current government is almost unthinkable. At a certain point you have to quit taxing and live within our means if we want to be able to bring jobs here, keep jobs here and help businesses that are located here grow and prosper.”
Houchins says there is plenty of room for development in Lake County and the county is currently promoting shovel-ready sites.
“With the current environment, we have plenty of commercial properties just standing here vacant,” he said.
Gerald Murphy, president of the Cook County Chamber of Commerce said the Chicago area is a desirable location for businesses, but the high tax rate in Illinois is a turnoff, particularly in a down economy.
“A lot of large national companies know they want to be in this area,” Murphy said. “We win some over, but in some cases we just can’t compete because of the extra taxation on businesses. We can only get it down so far.”