A few years ago, Pedigree Ovens founder Kurt Stricker was fielding multiple offers from Wisconsin cities to take his business out of Illinois.
The Harvard-based food producer had always been in McHenry County, Stricker said, but when weighed against what was being offered, the reasons to keep it there were diminishing.
Today, however, the business, which has been renamed PetDine since being acquired by ADM, remains in the city and has expanded its operations to the tune of nearly $40 million. Stricker attributes the decision to stay rooted in McHenry County to the area’s entrepreneurial zone.
“The enterprise zone brought us back on par with the incentives from Wisconsin,” he said. “It really helped us decide … to stay in Illinois.”
After nearly seven years of operation, the McHenry County enterprise zone has seen dozens of businesses reap its benefits, which in turn has helped the area’s economy, said zone administrator Charles Eldredge.
Currently containing Harvard and Woodstock, along with parts of unincorporated McHenry County, the area is preparing to add its third city in Marengo, which officials think could be home to significant development activity in decades. future.
With all three cities, along with the county, already having approved the addition, it’s up to the state to sign off, which officials expect in the coming months. Once added, the area, currently called the Harvard/Woodstock Enterprise Zone, will become the McHenry County Enterprise Zone.
Officials from each city said the area has helped their respective communities in different ways, and bringing Marengo into the fold is something that could benefit the region as a whole, Eldredge said.
Recent improvements to the Route 23 and Interstate 90 interchange in Marengo could see manufacturing come to the area, which some officials have said could also result in trade. Several officials throughout the area, including Marengo Mayor John Koziol, said they think the enterprise zone could help the interchange grow faster.
“This is just something to get people to come out here,” Koziol said.
An enterprise zone provides a number of benefits within a specific geographic area, with the aim of assisting economic growth. In McHenry County, the area is helping its rural western parts grow, Harvard Mayor Michael Kelly said.
“Any additional business located in western McHenry County is good for all of us,” he said.
McHenry County’s tax base also consists almost entirely of property taxes, Eldredge said. Adding business to the area can help shift the burden, which in turn can lower property taxes across the board.
“I would say our area has been very successful,” Eldredge said. “We have received a significant number of businesses that would not have settled [here] in addition to the benefits of the area.”
While the area offers benefits, Eldredge didn’t say that’s why a business might come. Instead, he compared it to a draw, saying it can “put you over the top.”
The zone has been in place since early 2016. After the state revamped its zone laws more than a decade ago, all active enterprise zones had to reapply, Eldredge said. Some, as a result, were not reapproved, which left openings available. McHenry County, which had never had an enterprise zone before, took advantage and applied.
Since taking effect, Woodstock Mayor Mike Turner said the area has been an important component of the city’s discussions with developers. He called it an “attention-getter,” saying he thinks it attracts businesses.
About two dozen projects in Woodstock have taken advantage of the area in recent years, said Economic Development Director Garrett Anderson. Some of these include renovations to the old town courthouse, Cedarhurst Senior Living and the Casey’s store on the south end of town.
“I’m very supportive of the enterprise zone,” Turner said. “I believe it makes a difference.”
County Board Chairman Mike Buehler, R-Crystal Lake, said in its current form, the area is not using the full amount that is geographically allowed. The addition of Marengo will see more space utilized.
“I think [the zone] is one of the most effective tools … to attract businesses to rural areas of McHenry County,” Buehler said.
The zone works by offering businesses that work within it several benefits at both the local and state level.
In McHenry County, those working on construction projects that qualify do not have to pay state sales tax on materials used in the project, Anderson said. For example, a project costing $5 million in materials can save about $300,000.
A business can also get half a percentage of the project total waived from state income tax.
Locally, the zone offers breaks on property taxes, along with a reduction in permit and inspection fees, Eldredge said.
It’s also an easier incentive to use than other economic tools, Anderson said.
Unlike other districts and zones that offer incentives, such as tax increment financing districts, also known as TIFs, no approval process is needed to receive benefits from an enterprise zone, Anderson said.
“As long as you’re investing within the zone, you’re approved,” Anderson said. “That makes it much more attractive to the people who use it.”
Harvard’s Kelly said he thinks it also incentivizes businesses already in the city to stay and expand. Or if they move into a building that is already built, there won’t be much benefit unless they make changes.
“If they don’t add value to the property, there’s not much benefit,” he said.
Local benefits, along with who qualifies, can vary from area to area, Eldredge said. Some, for example, allow residential projects to qualify, although McHenry County does not.
Currently, the county and cities are waiting for the state to give the final thumbs up on adding Marengo, Eldredge said. Before it becomes official, it must go through the state Department of Agriculture before getting a final sign-off from the Illinois Department of Commerce and Economic Opportunity.
“This is government bureaucracy,” he said. “These things are approved almost automatically. … It just takes a long time.”