Illinois

Elevate Chicago – $1.1B Infrastructure Redevelopment Plan

Chicago, Illinois Mayor Rahm Emanuel announced a $1.1 billion tourism and tradeshow infrastructure redevelopment plan called Elevate Chicago.

Rendering of Headquarters Hotel in McCormick Place entertainment district

Rendering of Headquarters Hotel in McCormick Place entertainment district (photo – .cityofchicago.org)

It combines previously announced investments worth $470 million with another $640 million for the redevelopment of Navy Pier and creation of an entertainment district at McCormick Place, which is Chicago’s convention center.

The project will create 3,700 permanent jobs and another 10,000 construction jobs, and is expected to fuel economic growth to the tune of hundreds of millions of dollars every year.

The plan calls for a new 10,000 seat events center, along with two hotels, shops and entertainment venues that are expected to fuel revitalization of Motor Row and other neighborhoods in the vicinity.

One of these hotels is the previously announced 1,200-room Headquarters Hotel and the other one will be a 500-room boutique hotel.

The City and local government agencies would be able to use the venue free of rent for events such as public school contests, graduations, etc.

The improvements and additional facilities will attract more tradeshows and conventions to Chicago, with a skybridge connecting McCormick Place West to the events center, which can be used as a general sessions hall for conventions.

The Navy Pier, already one of Chicago’s popular attractions, will be getting a comprehensive redesign of its public and commercial spaces just in time for its centennial. The $278 million redevelopment plan calls for urban landscaping, pocket parks, social areas and dramatic use of water features.

Marilynn Gardner, president and CEO of Navy Pier Inc, said they were taking what is good and making it great.

The events center arena and surrounding entertainment district is a public-private partnership, with the Metropolitan Pier and Exposition Authority (MPEA) and DePaul University sharing the $140 million cost of constructing the events center.

This will be matched with $400 in private investments to build the two hotels, restaurants and other venues included in the plan for the entertainment district.

Jim Reilly, CEO of McCormick Place, said they needed the events center and assembly hall in order to attract conventions and shows to Chicago and Illinois that were currently going to competing cities that already had such events centers.

Upon completion of the project, the increase in the number of conventions and events, and the resultant increase in hotel demand, is expected to generate an additional $108 million annually for the City of Chicago.

Mayor Emanuel said that the Elevate Chicago plan was a vital step towards realizing the full potential of the City. He said these projects would serve as a major economic engine and would have a lasting impact on the city for generations.

FedEx Ground Breaks Ground on Distribution Center in Sauget, IL

Illinois Gov. Pat Quinn was on hand for the groundbreaking of the new FedEx Ground distribution center in Sauget, IL.

FedEx Ground groundbreaking in Sauget, IL

FedEx Ground groundbreaking in Sauget, IL (photo – FedEx/Zach Bowman)

Construction of the 181,000-square-foot distribution center in Sauget Industrial Parkway will require FedEx to invest $23.5 million, and will create 25 full time and 150 part-time jobs.

Scott Burns, regional vice president of Fedex Ground, said they were thrilled to be a part of the Sauget community, and added that the site was selected primarily because of its location, which provides easy access to major highways and is close to the distribution centers of their customers.

That, and the fact that the Illinois Department of Commerce and Economic Opportunity (DCEO) has offered FedEx performance-based tax credits worth $459,000. The company will get these tax credits over a 10-year period, and only if it meets committed job creation and investment targets.

The company will also be getting workforce training grants to help the company hire trained employees that will boost its workforce quality. Once fully operational, the facility will be capable of processing 10,000 packages per hour. FedEx plans to have the distribution facility operational by Aug 2014.

Gov. Quinn said that companies like FedEx were growing in the state, and their expansion would help the Illinois economy recover from the worst recession the state had faced since the Great Depression.

FedEx Ground already has 16 facilities in Illinois, and the new center is part of the company’s strategic expansion plan for its nationwide network. FedEx Ground has added 11 major hubs across the country since 2005, along with expansions or relocations of 500 facilities.

The 175 new jobs being created in Sauget will add to approximately 50,000 existing FedEx Ground employees and 9,000 independent businesses which together pick up and drop off a total of more than 5.6 million packages every day in the U.S. and Canada.

Last year, the Moon Township, Pennsylvania-based FedEx Ground generated $9.5 billion in revenues. FedEx Ground is a subsidiary of the Memphis, Tennessee-based FedEx Corporation (NYSE: FDX).

Citi and Veterans Institute Team Up to Launch Seed Funding Competition

Citigroup Inc (NYSE: C) announced that they have teamed up with the Institute for Veterans and Military Families (IVMF) to launch a seed funding competition for veterans to launch or grow their business.

Citi-IVMF business competition

Citi-IVMF business competition (photo – citigroup.com)

IVMF was launched as a nationally focused institute in June 2011 by New York’s Syracuse University to leverage educational resources in support of veterans and their families.

The Citi-IVMF collaboration, called the “Citi Salutes: Realizing Your Dream Business Competition,” requires participants to submit their business plan by Nov 8, 2013 in order to be eligible for a grant of up to $25,000 to implement this idea.

The competition will be awarding a dozen grants worth a total of $130,000, funded by the Citi Foundation.

Mike Haynie, executive director and founder of IVMF, said that access to capital was the biggest obstacle entrepreneurs face, and their partnership with Citi would help many veterans overcome this challenge.

Business plans must be submitted by graduates of the V-WISE or Boots to Business entrepreneurship training programs. Applicants are additionally required to have at least a 51 percent stake in a small business.

Both V-WISE (Veterans as Women Igniting the Spirit of Entrepreneurship) and Boots to Business are IVMF initiatives launched as a partnership between IVMF and the U.S. Small Business Administration.

V-WISE offers a 15-day online course for the basics of entrepreneurship, followed by a three-day conference where students get in-person training from expert entrepreneurship educators.

Since the program is funded by the SBA and managed by Syracuse University’s Whitman School of Management, costs to participants are minimal and limited to a $75 registration fee and travel expenses to the conference (hotel stay and meals are free).

Boots to Business offers a three-phase training program that helps transitioning military members and their spouses to become small business owners.

Ten finalists from each program will get to present their business plans to a judging panel at the V-Wise conference in Jan 2014, and a grand prize of $25,000 will be awarded to the best plan.

The second and third award winners get smaller amounts. There will also be special awards in three categories including an “Impacting Veterans Prize” and prizes for the best social and technology venture plans.

Jerome Byers, Head of Citi Small Business, officially launched the program at the V-Wise conference which took place May 3-5, 2013 in Chicago, Illinois. Byers said they are pleased to support a program encouraging entrepreneurship as a pathway for post-service success for veterans.

Find out more about IVMF programs and the Realizing Your Dream competition at vets.syr.edu.      

Illinois Highlights Successful Year for 1871 Digital Startup Hub

Chicago Mayor Rahm Emanuel and Illinois Governor Pat Quinn made a joint announcement about the results of a survey undertaken to find out what the 1871 digital startup hub has been doing since it was launched a year ago.

1871 - Digital Startup Hub in Chicago

1871 – Digital Startup Hub in Chicago (photo – 1871.com)

The survey of founders of 1871’s member startups shows that they have together created 800 new jobs, and are forecasted to create another 1,342 jobs in the next year.

Together, they have attracted $30 million from investors, and added nearly $13 million in additional revenues into the Chicago economy.

Governor Quinn said that 1871 was fostering innovation and fresh ideas, and the creative forces at work in the 1871 community were benefiting the state.

Mayor Emanuel said that Chicago was just as good as any other U.S. city in terms of providing the momentum required for developing startup ecosystems.

The 1871 community currently consists of 225 startups working alongside each other. This number does not include alumni that have outgrown the shared space and moved out to set up their own separate facilities and offices.

Everpurse Founder Liz Salcedo, whose fashion-tech company is a recent 1871 alum, said the startup hub was their launch pad and offered the density of talent, connections and ideas that put the company on its path to success.

Another striking example of 1871′s success is the digital startup hub’s own former chief executive Kevin Willer, who recently quit his position to take over a venture capital fund named the i2A Fund. The kicker is that the i2A Fund just happens to be located inside 1871.

The non-profit Chicagoland Entrepreneurial Center (CEC) operates 1871, which was launched with the help of $2.3 million in public funding provided last year by Illinois.  CEC’s mission is to promote and grow Chicago’s startup community, with 1871 as its flagship project.

Jim O’Connor, co-chairman of the board of directors of CEC, said that it had been an incredible first year with 1871 exceeding their expectations.

The startup hub was named 1871 as a twist on the Great Chicago Fire of 1871. They say the real story was not the fire, but about the way inventors, engineers and architects came together to rebuild a completely new city afterwards. The innovations they came up with 140 years ago shaped not only Chicago but also the modern world.

The 1871 community of today similarly invites digital designers, entrepreneurs and engineers to share ideas, build their businesses and change the world.

Art Van Rolls Into Chicago With 600 New Jobs

Michigan’s largest furniture retailer is expanding into the Chicago area with six new retail stores and a distribution center.

Art Van Furniture Chicago announcement

Art Van Furniture Chicago announcement (photo by Art Van Furniture)

The company’s move into Illinois will require a total investment of around $40 million, and will create 600 new jobs.

This includes 35 jobs at a planned 183,000-square-foot regional distribution center in Bolingbrook, IL that will require the company to invest $4.9 million.

The company already has one distribution center at its headquarters in Warren, MI that serves its existing operations.

Art Van will start with a 50,000-square-foot store in Orland Park. The five other stores will be opened by October, including one in Bolingbrook to go with the distribution center and another in Merrillville-Hobart, Indiana.

The Illinois Department of Commerce and Economic Opportunity (DCEO) has offered Art Van Furniture $404,000 in EDGE (Economic Development for a Growing Economy) tax credits over a 10 year period. T

he incentives were provided for creating 35 jobs and investing $4.9 million in Bolingbrook for the distribution center. However, the company claims the incentives were secondary and they chose Chicago for the expansion mainly because of the huge market which has plenty of room to accommodate a new retailer.

Art Van Elslander, founder and chairman of Art Van Furniture, was on hand along with IL Gov. pat Quinn for the announcement that was made at the future store location in Lincoln Park. Van Elslander said Chicago was their kind of town – “a world-class city in a world-class state.”

Gov. Quinn said they were committed to working with companies such as Art Van Furniture to create new jobs.

Art Van plans to expand to a dozen furniture stores and an equal number of bedding stores in the Chicago area within the next three years, with the aim of taking over 10 percent of the market. They are also planning to open a large store in Toledo, Ohio.

Art Van Furniture claims to be the largest independent furniture retailer in the U.S., with more than 2,700 existing employees across 36 stores in Michigan and another eight bedding stores in Indianapolis.

BIO Report – Bioscience Economic Development Best Practices

The Biotechnology Industry Organization (BIO) has released a comprehensive report that serves as a best practices guide on bioscience economic development and provides data on state-by-state legislative initiatives and regulatory reforms introduced to support economic growth in biosciences.

BIO report on bioscience economic development

BIO report on bioscience economic development (photo – bio.org)

The report, titled “Bioscience Economic Development: Legislative Priorities, Best Practices, and Return On Investment,” was unveiled during the 2013 BIO International Convention underway at the McCormick Place Convention Center in Chicago, Illinois.

BIO undertook a review of initiatives in support of bioscience companies in all 50 states. Highlights from the report:-

- 15 states offer Small Business Innovation Research (SBIR) matching grants;

- 39 states offer R&D tax credits, many of which are higher if it is an in-state university doing the research. Seven states have made these R&D tax credits refundable, while three have made them transferable;

- 35 states offer sales tax exemptions for R&D equipment, while 33 states offer sales tax exemptions for biomanufacturing equipment. Seven states are even more specific, and have a sales tax exemption offered exclusively to bioscience companies;

- Seven states have a tax credit program for angel investors who invest in bioscience companies; and

- 14 states have made direct investments in bioscience companies.

Jim Greenwood, president and CEO of BIO, said that industry growth and bioscience economic development required wide-ranging collaboration between policymakers, the private industry and universities.

The report also includes a section on ROI success stories (scroll down to pg 11) which includes five case studies of stellar biosciences initiatives and investments made by California, Massachusetts, Kansas, Pennsylvania and Texas.

One of these case studies is the California Institute for Regenerative Medicine (CIRM), created in 2004 to further stem cell research and funded with $3 million in bond sales over a 10-year period. CRIM provides research funding, training and facility setup.

As of July 2012, CIRM had committed $1.1 billion in grants, which added to another $884.3 million in matching funds put up by grant recipients and other supporting organizations. This investment has created 24,654 new and full-time jobs, and generated $201 million in local and state tax revenues.

California’s biomedical industry has received $1.98 billion in venture capital funding and $3.33 billion in NIH grants over the last decade, which has provided the following returns:-

- 2,321 biomedical companies that generate a combined $69.2 billion in annual revenues;

- Together, these companies employ 152,806 employees at average annual wages of $101,658;

- Biomedical exports from California are worth $20 billion per year.

The U.S. bioscience industry supports 1.6 million jobs that pay 79 percent higher wages as compared to an average worker in the private industry.

Read the full bioscience economic development report from BIO – Download (pf)

North American Lighting Announces $50M Expansion in Paris, IL

Automotive lighting supplier North American Lighting Inc. announced that it plans to invest $50 million for an expansion of its manufacturing plant in Paris, Illinois.

North American Lighting

North American Lighting (photo – nal.com)

North American Lighting is a wholly-owned subsidiary of Japan-based Koito Manufacturing Co. Ltd., and is the largest of North America’s non-affiliated lighting suppliers.

The expansion involves addition of 200,000 square feet of manufacturing space and new equipment for additional production lines that will create 300 new jobs.

The company already has 250,000 square feet of space at the Paris facility, which has more than 870 employees. The company has more than 2,600 full-time jobs in the region.

Greg Conrad, president and COO at North American Lighting, said the auto industry’s recovery meant more business for the company, which in turn meant that they were able to bring new business to Illinois. Conrad added that they were standing by their commitment to serve as an economic anchor for southeastern Illinois.

It helps, of course, that the state agreed to provide $4.4 million in incentives. This includes performance-based EDGE (Economic Development for a Growing Economy) tax credits worth $3.2 million over a 10-year period.

Another million dollar grant is being offered through the Large Business Development Program. Lastly, the company is eligible for $150,000 in training grants under the Employer Training Investment Program.

Adam Pollet, acting director of the Illinois Department of Commerce and Economic Opportunity (DCEO), said the new North American Lighting jobs in Paris would help energize (pun intended?) the area communities.

Pollet said the expansion was secured by Illinois because they had kept in touch with company officials ever since North American Lighting moved its corporate HQ to Paris, and knew exactly what the company needed in order to go ahead with the expansion.

Paris, IL has been the corporate headquarters of North American Lighting since 2005, and they have additional Illinois manufacturing facilities in Salem and Flora. North American Lighting has a production facility in Muscle Shoals, Alabama and a technology center in Farmington Hills, Michigan.

Grundfos Breaks Ground on North American HQ in Downers Grove, IL

Last year in Nov, the world’s largest water pump manufacturer Grundfos has announced plans to move its North American headquarters from Olathe, Kansas to just outside Chicago in Downers Grove, Illinois.

Grundfos groundbreaking

Grundfos groundbreaking (photo – grundfos.us)

Today, the Danish company broke ground on their headquarters, with Downers Grove Mayor Martin Tully and IL Gov. Pat Quinn joining Grundfos executives kicking off construction with sledgehammers to bring down a wall in the existing structure on-site.

Grundfos North America president Jes Munk Hansen said the main reason they were relocating their headquarters was because the Chicago area was emerging as a key water industry hub, and that was not just because it provided access to the Great Lakes.

Hansen said the state had proven its commitment to upgrading water infrastructure, and specifically cited the $1 billion Clean Water Initiative. He said the company hopes to play a major role in developing more water initiatives in Illinois and the rest of the country.

Downers Grove was selected as the location within Illinois because it provides easy access to the airport, and places the headquarters close to the company’s customers and other water industry companies.

Grundfos did not ask for any incentives for the headquarters relocation. They will be moving a handful of key employees from the existing headquarters in Kansas, and 40 new jobs will be created at the Downers Grove headquarters over the next few years.

Grundfos plans to seek LEED certification for the new 10,871-square-foot headquarters in Downers Grove, Illinois. They expect to focus the resources of the Aurora Water Utility Center launched last year to develop energy-efficient pumping products for the waste water market.

Hansen said that despite local-government budget woes, they were confident infrastructure spending would take off soon, and added that they were looking at the investments in Illinois and their dedication to the North American municipal water market as a long-term strategy.

Grundfos already employs around 100 people in Illinois at its waste-water pump manufacturing operation in Aurora and an office in Chicago. The company has around 1,300 employees spread across operations in six U.S. states, in addition to operations in Canada and Mexico.

In fact, the close relationship the company has developed with Illinois may help it gain business in Mexico too. Andrew Warrington, president of Grundfos Chicago, was part of Gov. Quinn’s delegation accompanying him on last week’s trade mission to Mexico, where they were pitched to the Mexico City Water Company and the country’s National Water Commission as an Illinois company.

Grundfos has 18,000 employees around the world producing and selling 16 million pumps annually, and generates $4 billion in annual revenue.

Texas Launches Ad Campaign Targeting Chicago Companies

Texas Gov. Rick Perry announced that the state has launched a week-long mixed media ad campaign in Chicago tailored to encourage Illinois-based companies to relocate to Texas.

Texas ad campaign in Chicago

Texas ad campaign in Chicago (photo – texaswideopenforbusiness.com)

The $38,450 ad buy is paid for by the TexasOne public-private partnership which markets the state as a business destination.

It will include week-long print and web ads on Crain’s Chicago Business Journal and their website chicagobusiness.com.

Specifically, Texas is getting a two-day takeover of the website, ads through email marketing, and a full page ad in the Monday print edition of Crain’s Chicago Business Journal.

If anything, these Chicago ads are even more scathing than the similar California ad campaign a couple of months ago.

You can see the ad graphics if you visit chicagobusiness.com. One says “Get Out while There’s Still Time and Come to Texas.” The other one says “The Escape Route to Economic Freedom Leads to Texas.”

The detailed text in the print ad (pdf) expands on the “escape from Illinois” theme and compares companies in Illinois to people stuck in a burning building about to collapse.

“With rising taxes and government interference on the upswing, your situation is not unlike a burning building on the verge of collapse. if you’re thinking of “just riding it out” you might want to reconsider. There is an escape route to economic freedom… a route to Texas.”

This exit/escape theme is further hammered home if you click on the ad link and visit the page created for Illinois on texaswideopenforbusiness.com, where it says “To start your escape to Texas, contact us at 512-655-EXIT (3948) or exit@texaswideopenforbusiness.com.”

It’s just a $38,450 ad buy and it will be history in a week, but as California found out the hard way, the free media coverage of these Texas ads goes a long way. Gov. Perry told Site Selection magazine last month that the $24,000 ad buy in California and criticism of the ads by state officials had earned Texas $4 million worth of free media.

If Illinois wants to escape this kind of free media heat, state officials need to entirely ignore the campaign, or at the very least downplay its impact without being overly critical of Texas.

Illinois Initiates Social Impact Bond Program

The State of Illinois is launching a Social Impact Bond (SIB) program with help from the Rockefeller Foundation, Dunham Fund, and the Harvard Kennedy School’s Social Impact Bond Technical Assistance Lab (SIB Lab).

Social Impact Bonds

Social Impact Bonds (photo – public domain/wikimedia)

The Social Impact Bond concept was first tried out in the U.K. in 2010, and then by New York City and Massachusetts in 2012.

These “pay for success contracts” involve investments made by a private investor or foundation through the state.

This private entity assumes the risk of the upfront costs of tackling pressing social issues such as recidivism or homelessness, which if solved would actually create savings for the government.

The investor gets returns only if the program works, and the state can then safely reinvest the extra savings on expanding the tested and successful programs.

The Kennedy School’s SIB Lab was established with support from the Rockefeller Foundation, which has been at the forefront of bringing SIBs to the U.S.

One of the important functions of the SIT Lab is to provide pro bono technical assistance to local and state governments that want to implement pay-for-success contracts.

They will be helping Illinois now, with an initial $275,000 assist from the Dunham Fund, which is one of the biggest private foundations in the Greater Aurora area.

The SIB Lab will be putting out an RFI (Request for Information) in the coming weeks, seeking potential projects that could be ideal for a social impact bond-based solution. Targeted policy areas include reducing recidivism rates among ex-offenders, improving school graduation rates, reducing hospital readmission rates, and bettering outcomes for at-risk youth.

Judith Rodin, president of The Rockefeller Foundation, said that it was win-win-win proposition – no tax dollars required by the government for a proven intervention, programs initiated by local organizations can be brought up to scale, and investors can get social as well as financial returns.

New York City tried this last year on a program called ABLE (adolescent behavioral learning experience) which had an aim of reducing chances of incarceration. It was managed by the non-profit MDRC, with funding from Goldman Sachs and a grant from Bloomberg Philanthropies.

At a time when Illinois is facing unprecedented financial challenges, Gov. Quinn said that the social innovation model was unique in that it would generate investments for community priorities “without dipping into the pockets of Illinois residents.”

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