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Trader Joe's eyes EDPA 1 for distribution facility

County also agrees to term sheet with Rock Island Clean Line regarding converter station in EDPA 1

Published: Wednesday, Nov. 14, 2012 7:59 a.m. CDT • Updated: Wednesday, Nov. 14, 2012 4:41 p.m. CDT

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After sitting practically idle for years after its creation, Grundy County’s Economic Development Project Area #1 could soon be a very busy place.

The Grundy County Board on Tuesday, during its last regular meeting of the current fiscal year, approved a resolution extending a tax rebate to Trader Joe’s East, which has plans to site a distribution center within the zone created in 2006. The rebate would provide for 50 percent of the company’s taxes to be returned each year for four years after the facility becomes operational.

Also on Tuesday, the board approved a term sheet with Rock Island Clean Line regarding its plans for the development of an electric converter station within EDPA No. 1. The term sheet describes the terms and conditions upon which Rock Island is proposing to construct the converter station, which will serve Rock Island’s planned 500-mile long electric transmission line.

Trader Joe’s East, according to Bloomberg Businessweek, “operates grocery stores and sells bakery products, cheeses, chips and dips, snacks, coffee, fresh produce, heat and eat entrees, meatless products, nut and trail mixes, organic foods, seafood, dietary products, and vitamins, as well as wine and beer.”

Based in Needham, Mass., the subsidiary of Trader Joe's Company, plans to own and operate a 750,000-square-foot distribution facility in an existing industrial park in Minooka. Because it will own instead of lease the facility, according to Missy Durkin of the Grundy Economic Development Council, the GEDC believes the company’s investment – which is estimated at $80 million -- will be a long-term one.

It is expected the distribution center will employ over 500 individuals once it is fully operational.

In order to pave the way for Trader Joe’s to site within the EDPA, the village of Minooka and Grundy County earlier this year agreed to rescind an intergovernmental agreement that prevented warehouse facilities from benefitting from the economic incentives associated with the EDPA.

The agreement, signed by the two taxing bodies in 2006, covered the 12,000-acre area, designated as  EDPA 1, that reaches from Interstate 80 south to Dresden Station and as far west as the Channahon and Morris boundary line.

Legislation was originally passed in July 2005 authorizing the creation of Grundy County’s first project area to ease the impact of the county’s machinery and equipment tax, which taxes machinery and equipment as real property. Grundy County is the only county in the state of Illinois to follow such a practice, which has historically put it at an economic disadvantage when trying to attract industry.

All businesses, with the exception of freight terminals or warehouse facilities, were eligible to receive incentives, such as tax abatements, to locate within EDPA 1. At the time, Village Administrator Dan Duffy has explained previously, it was thought that the village would not benefit by offering incentives to warehouse facilities.

“Now both sides agree it’s best to rescind that and move forward,” he said following the Minooka Village Board’s action to rescind the agreement.

It was noted at the time of Minooka’s vote that the village was currently trying to attract a specific warehouse facility to Minooka, but until recently Trader Joe’s East was identified only as Project G.

Unlike Trader Joe’s East, Rock Island Clean Line has no made no secrets of its identity nor its intent to construct a transmission line to move wind energy to the end of its line at Grundy County, from where it will be converted into usable voltage and run through the old Collins substation near Morris to move the power east.

The transmission lines will result in billions of dollars invested in wind farms, putting thousands to work building turbine materials and constructing the turbines. In addition, there will be local jobs with the construction of a $250 million converter station to be built in Channahon, with EDPA 1.

The proposed routing of the transmission line has been a point of controversy because it will go through agricultural land and because some fear the company, which has applied for public utility status, will seek eminent domain power to forcefully take land through which to run the line.

Board member Chris Balkema was quick to point out that the term sheet approved by the board Tuesday had nothing to do with the proposed transmission line route, only outlining each side’s intention regarding the siting of the converter station.

Balkema noted that, under the term sheet, local schools and the fire district will also be permitted to negotiate agreements with Rock Island that will be advantageous to the schools.

According to the intents outlined in the agreement, both the county and Rock Island will continue pursuing enterprise zone expansion for the EDPA site. Further, if Rock Island builds the converter station and an enterprise zone extends to cover the property, the county intends to annually abate 85 percent of the ad valorem taxes that would otherwise be owed to it for the remaining life of the applicable enterprise zone, which is anticipated to be until 2032. The converter station, as a result, would be excluded from the EDPA.

If the sunset date for the enterprise zone is extended, the county board would annually abate 50 percent of the ad valorem taxes that would be otherwise owed from 2033 until the zone terminates or 2042, whichever occurs sooner.

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