Local Editorials

Our View: Negotiate on tax abatement plan

Robert Jessup, President of Jessup Adhesive Coated Films, shows a roll of tape as he talks about the upcoming expansion to his business at Jessup Adhesive Coated Films on Tuesday, July 23, 2019 in McHenry. The business is eyeing a large expansion project to streamline productivity and meet worldwide demand.
Robert Jessup, President of Jessup Adhesive Coated Films, shows a roll of tape as he talks about the upcoming expansion to his business at Jessup Adhesive Coated Films on Tuesday, July 23, 2019 in McHenry. The business is eyeing a large expansion project to streamline productivity and meet worldwide demand.

The big plans that the owner of Jessup Manufacturing Co. had for industrial property in McHenry may have to be scaled back after a requested property tax abatement failed to win approval from all nine local governments that had to agree.

But members of the District 15 school board, the local government that was asked to give the most, failed to approve the proposal. It died on a 3-3 tie vote in August.

Now Robert Jessup, the company's president and CEO, says the planned expansion may have to be scaled back by $1 million to $1.5 million. This after District 15 rejected an abatement that would have been worth about $600,000 to $700,000 in total over five years.

It seems there should be some room for negotiation here.

Jessup's plans for nine different land parcels on McHenry's east side would be a benefit to the local economy. Jessup says his family-owned business needs more space to accommodate growing demand for its adhesive films, nonslip tapes, specialty graphics and photoluminescent products.

To meet that demand, they plan to extend McHenry's city water main to their building site at 2815 W. Route 120, demolish unusued buildings and build a 40,000-square-foot addition. Within two years after the build, the company planned to add 15 new positions, paying between $16 and $26 an hour, records show. Extending city water service to the area could also make other nearby properties along Route 120 to the east better positioned for future development.

The three District 15 board members who opposed the plan have been criticized for not supporting a pro-development measure, and to some extent, it's warranted. But then, District 15 is being asked to forgo the greatest amount of money – probably around $300,000 – over five years. Maybe their calculations are a little different than the McHenry Township Fire Protection District, whose board members agreed to abate 10% as much.

If you combine the amount that District 15 and High School District 156 were asked to abate, it's at least $415,000 over five years that would not go to local education.

This is another example of why Illinois should pursue government consolidation. On the one hand, all it takes is three members of one local school board to derail an agreement that eight others might approve. On the other, eight local governments can blame the members of the one board that stands to lose the most for being shortsighted or tax-happy.

More immediately, though, there should be some renewed discussions about possible incentives. Jessup's plan would benefit the area, his company has been in McHenry since 1956, and they should stay in the community rather than move away. There are multiple incentives available for the business, including Illinois Edge tax credits for the added employment the project will bring, and leaders are still eager to work with them.

What if the property tax abatement that school districts were asked to offer was capped at, say, $250,000 total? Or if the abatement started out at 100% of the increased property tax owed in the first year and was phased out over five years? With some creativity, perhaps a better deal can be worked out.

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