July 16, 2013
From The Chicago Tribune, by Melissa Harris http://www.chicagotribune.com/business/ct-biz-0716-confidential-method-20130716,0,615138.column?dssReturn
, the maker of hip-looking, eco-friendly cleaning products, plans to open a 150,000-square-foot soap production facility on Chicago's Far South Side next year, city officials are expected to announce Tuesday.
Method, founded in San Francisco and now owned by Belgium-based Ecover, is expected to receive $1.1 million in tax credits over 10 years from the state in exchange for employing 65 people in Pullman Park. An additional 20 people will work for an on-site supplier. The developer, the nonprofit Chicago Neighborhood Initiatives, is expected to apply for an estimated $10 million in taxpayer subsidies, known as tax increment financing (TIF), from the city.
Method, which makes biodegradable, nontoxic products, will build the plant behind an under-construction Wal-Mart Supercenter off the 111th Street exit of the Bishop Ford Freeway. The land was once the site of a Ryerson steel mill.
The addition of Method helps push forward redevelopment of Pullman Park, so named because Pullman railroad cars were once manufactured in the neighborhood. The 174-acre site is to be built in phases over a decade and include housing, retail, a neighborhood recreation center and park. The developer, known as CNI, had not planned for a manufacturing facility and will need a zoning change to make the Method deal happen.
"When we first planned this, the 50 or so acres behind the box retail, we contemplated that for housing," said David Doig, CNI's president and a former park district superintendent. "That was a function partly of hopeful thinking of the residential market coming back. We're now four years removed (from the recession) and the housing market on the Far South Side is not growing back. There's kind of been a little bit of a reality check on our part."
Meanwhile, residents are campaigning to have Pullman, one of the country's earliest "company towns," designated a national park or monument to attract visitors. And the state has spent $3.5 million on an ongoing renovation of the vacant Hotel Florence, the neighborhood's architecturally stunning centerpiece. Ideas are being sought for how that space should be used.
Method considered 150 sites across four states before settling on Pullman.
"We sold them on the community, the Pullman Historic District, and everything we're trying to do in the community," said Ald. Anthony Beale, whose 9th Ward includes the development.
Deputy Chicago Mayor Steve Koch said "the courtship" took "several months," and Method's board flew to Chicago to meet with Mayor Rahm Emanuel as well, Koch said.
"In this instance, these guys really wanted to be in Chicago," Koch said. "They wanted to be in a historic area. They wanted to be in sort of a classic, urban, manufacturing city. They probably in the end will wind up paying a little bit of a premium to accomplish that relative to some incredibly attractive packages that were being offered to them by Michigan."
Pullman was once an apex of Chicago's manufacturing economy. But the last Pullman car, an Amtrak sleeping car, came off the line in 1981. Electro-Motive Diesel, now owned by Caterpillar, closed its Pullman operation in the 1980s. A Dutch Boy Paint factory in West Pullman closed in the 1970s. International Harvester, now Navistar, left West Pullman in the early 1980s.
The Sherwin-Williams Co. latex paint plant is still there, as is Pullman Sugar, a subsidiary of dairy distributor Dutch Farms Inc.; the University of Chicago Press; and the Kellogg-Keebler baking facility.
A newcomer to the area is steel company A. Finkl & Sons Co., which is moving from the North Side onto the former Verson Steel site. Finkl is receiving $22.5 million from Chicago via tax increment financing. And state officials have pledged Finkl more than $7 million in tax credits and training funds.
"You have five Class 1 railroads — these are the big guys, CSX, CN, Norfolk-Southern — that run through the Calumet-Pullman area, and electrical power is abundant here," said Ted Stalnos, president of the Calumet Area Industrial Commission. "You couldn't build that on the North Side of Chicago, because the electrical power available wouldn't be there. The infrastructure was built for steel mills down here."
Tuesday's announcement will add to the taxpayer tab for Pullman Park, which is expected to be a retail destination for much of the Far South Side. The city had approved $11 million in tax increment financing for previously approved retail development. The state chipped in a $4.6 million state grant for road and infrastructure improvements. And CNI has used $22.2 million in federal tax credits for investment in low-income areas.
The newer round of TIF subsidies will go toward job training for Method workers, site preparation and land acquisition, including environmental cleanup. Doig said the site has to be cleaned of slag, a byproduct of smelting ore for steel production. And lead contamination dates to the late 1800s, when industrialist George Pullman filled in the site, then Lake Calumet, with debris from the Chicago fire and his own rail car operations.
Doig said about $3.5 million of the TIF will be spent on reimbursing his organization for the purchase of the 20-acre-plus parcel from U.S. Bank. Doig said CNI would then transfer the property to Method for approximately $750,000. CNI will build and own the driveway, amounting to a $1 million investment, Doig said.
The state tax credits would be paid out over 10 years, provided Method meets investment and employment requirements. The company also is expected to receive an estimated $30,000 in state job-training funds and apply for energy-efficiency grants related to wind, solar and wastewater reuse systems in its first manufacturing plant.
"We aim to make this an advanced, sustainable manufacturing plant," the company said in an emailed statement.
"Illinois is creating a green belt economy in the old steelyards," said Adam Pollet, director of the Illinois Department of Commerce and Economic Opportunity. "We're moving beyond these outdated notions of a Rust Belt economy and replacing it with a green belt economy, and that's (Method's) vision as well."