Elgin council approves $21,000 incentive package

A business on Elgin’s northwest side will receive $21,000 from the city council to stay in the city and relocate downtown.

A&R Global Logistics already employs 14 people from its office on Davis Road but plans to move into the second floor of the Leath Building on East Chicago Street and hire another 15 people by September. The city offered $500 to A&R for each retained position and $1,000 for the 15 new jobs filled in the next eight months.

Councilman John Prigge was the only council member to vote no on the agreement, which also included six free memberships for The Centre. He said paying a business to move 3 miles from one part of Elgin to another sets a poor precedent for future businesses seeking similar deals and sends the message that there are two Elgins, with downtown being treated differently than anywhere else.

Assistant City Manager Rick Kozal helped negotiate the incentive agreement and said that was not the case.

“This is about keeping a business in Elgin,” said Kozal. “The fact that it happens to be moving to the downtown ... we see that as a bonus.”

Kozal said the company plans to spend $100,000 building out its new office space and will fill a building left largely vacant since 1997, though Prigge pointed out it was leaving an empty building behind.

Tonya Hudson, executive director of the Downtown Neighborhood Association, helped encourage A&R management to choose downtown over other cities it considered, including Arlington Heights and Schaumburg.

Hudson said she expects the 29 employees to make a notable impact on the downtown with use of coffee shops, restaurants and other businesses.

She also said the company, which provides outsourced third-party transportation management solutions, is very tech-reliant. Hudson expects its presence to create business-to-business opportunities for the tech companies that make up an important niche in the downtown.

“I think they’re a great fit,” Hudson said.

Jeff O’Connor, CEO of A&R Global Logistics, said he was attracted to the downtown for its urban feel that offers a draw for young college graduates.

A cost-benefit analysis by Incentis Group of spending $21,000 to retain the company showed a return on investment of about $26,100 in the first year alone. Including direct and indirect tax benefits for the city, A&R Logistics is expected to bring close to $479,000 to Elgin in 10 years.

The council gave the agreement preliminary approval Wednesday and will cast the final vote at the next council meeting.