Elk Grove Village Business Year In Review

Record Low Vacancy Rate, Technology Park Top Business Stories Of 2018

Business boomed in Elk Grove Village in 2018. The vacancy rate in the village’s business park reached historic lows as ground broke on the new 85-acre Elk Grove Technology Park, representing an estimated $1 billion in new investment.

The following is a list of the top 10 business stories for Elk Grove Village:

Elk Grove Technology Park

In January, officials with the Brennan Investment Group closed on 11 properties totaling 85 acres, including the largest parcel Busse Farm to make way for the planned $1 billion Elk Grove Technology Park.

The campus is located between Higgins Road and Oakton Street west of Lively Boulevard. The development would start with four buildings, built on spec with room for as many as nine buildings on the site.

In July, Mayor Craig Johnson, Gov. Bruce Rauner and a host of other dignitaries joined developer Michael Brennan, principal at the Brennan Investment Group, for a groundbreaking.

West of Lively Boulevard on Oakton Street are tall walls erected for the first buildings to make up the 1.2 million square foot development.

Leasing officials with the firm CBRE say each of the tech park’s buildings are set to be modern, precast structures with high-end glass facades, state-of-the-art systems and fixtures and 32-foot ceilings. Buildings would range in size between 75,000 to 250,000 square feet, along with two additional identified hospitality amenities like an upscale business hotel.

The technology park would also feature community bike and walking trails along Higgins and a fountain with four large brass elk statues.

The technology park is marketed to several businesses sectors, high tech clean manufacturing companies, including robotics, data centers, where servers for websites and web-based cloud storage are housed in massive secure buildings, and “pick and pack” e-commerce based businesses, similar to Amazon fulfilment centers.

CBRE leasing agents said there is a great deal of interest in the development community in the Elk Grove Technology Park project.

The new development should be a huge windfall for taxing bodies including the village, schools, the park district and library. The tax rate on agricultural land has among the lowest tax rates paid. High tech, modern industrial buildings would not only have a far higher appraised value, but would also receive at a higher tax rate than the former Busse Farm.

Low Vacancy Rate

The vacancy rate in Elk Grove Village’s 62-million square foot business park, just under six square miles, continues its historic drop. Village officials celebrated in August when Colliers International reported the vacancy rate had fallen below 3 percent to 2.64 percent. In November, end of third quarter numbers released by Colliers showed that rate fell further to just 2.55 percent.

Johnson previously said a vacancy rate below 5 percent is basically full as part of the typical ebb and flow of businesses opening, closing and moving. The vacancy rate has remained below 5 percent for the last two years.

Michael Brennan, of the Brennan Investment Group developing the 85-acre Elk Grove Technology Park, said earlier this year that Elk Grove Business Park developments coming into the business park are considered Class A-1 buildings with high loading docks and ceilings. Many of those new developments are “teardowns” replacing older Class B or C buildings with new modern facilities.

The village has been aggressive both in its marketing of the business park and offering incentives for businesses to relocate and improve properties in the park, including 6B property tax incentives and tax increment financing districts.

A 6B tax incentive awarded by Cook County lowers property tax rates for 12 years to long-vacant or blighted properties. It must include a local recommendation from village trustees. In 2018, through November, Elk Grove Village issued 13 Class 6B property tax recommendation agreements.

Although Elk Grove Village does not have the obvious retailers like communities such as Schaumburg or Niles, businesses in the business park do generate substantial sales tax revenue to the village. In 2017, the village generated $20 million in sales tax revenues with a higher vacancy rate.

Bahamas Bowl

Elk Grove Village officials approved a $400,000 contract with marketing firm Red Caffeine in late July. Of that contract, $300,000 is related to the village’s sponsorship of a college football bowl game.

Elk Grove Village is the primary sponsor for the Makers Wanted Bahamas Bowl, which will see Florida International University take on Toledo University. Kickoff is set for 11:30 a.m. (Central Time), Friday, Dec. 21 at Thomas Robinson Stadium in Nassau as part of ESPN’s college bowl series. Makers Wanted is the village’s tagline for the business park. Internet searches using “Makers Wanted” bring up information on the business park among top results.

Johnson said the sponsorship is bringing the business park national and international attention and brand awareness.

Representatives of several local businesses, including Brennan, developers of the Elk Grove Technology Park, and Tom Walter of Elk Grove’s Tasty Catering will make the trip with Johnson to Nassau.

An analysis of the media coverage, social media traffic and hits to the village’s website marketing the business park after the July 31 bowl game announcement, which echoed across the United States and around the world, estimated the advertising value of that media coverage at $3.6 million in just the first 24 hours.

For about the last two weeks, marketing has ramped up with a digital email campaign using a database of hundreds of thousands of business leaders who are being directly targeted with digital ads.

In 2017, the village’s Makers Wanted campaign was a sponsor of the Chicago Cubs. When announcing the Bahamas Bowl sponsorship, Johnson showed how traffic to the village’s Makers Wanted website ramped up in March at the start of the season and trailed off in November when the Cubs lost to the Los Angeles Dodgers in the National League pennant series.

Trump’s Tariffs

In early March, President Donald Trump announced sweeping tariffs of 25 percent on imported steel and a 10 percent tariff on aluminum, with few exceptions.

Although the Elk Grove Business Park does not have any steel or aluminum mills, it is home to several metal processing plants along with machining businesses that use steel and aluminum to create precision parts, or sell architectural steel and aluminum products, all impacted by the tariffs.

A tariff is a tax levied on specific items being imported or exported. Governments often use tariffs to generate revenue or to protect domestic industries from competition abroad.

“It’s a complex problem,” said Steve Clingan, president of Clingan Steel in Elk Grove Village. “That shotgun approach is wrong.”

Clingan said he and and other metal processors saw immediate hikes in price by domestic steel and aluminum mills. He said he, in turn, had to pass those heightened raw material costs on to his customers.

Some from the Elk Grove business community expressed optimism the tariffs could lead to increased sales of products produced domestically.

Ring Road Progress

Illinois Tollway projects made substantial progress in 2018. Friday, Dec. 14, the Des Plaines Oasis is set to close to makeway for ramps connecting the Jane Addams Tollway (I-90) to the coming I-490 tollway on Elk Grove’s eastern edge with O’Hare Airport.

Work on those ramps is set to begin next spring. The entire project should finish in 2023.

The I-490 project, part of the $3.4 billion Elgin O’Hare Western Access project, would run between Des Plaines, at the former oasis site and Franklin Park, connecting the Jane Addams to the Tri-State Tollway (I-294).

I-490 would also connect with Route 390, the other leg of the Elgin O’Hare Western Access project, completed in 2017. That leg extended the Elgin O’Hare Expressway to the west side of O’Hare Airport and Elgin, and would also intersect at a western entrance to the airport.

Other related projects move Mount Prospect Road and raise Touhy Avenue over Union Pacific railroad tracks.

The I-490 project saw delays caused by lawsuits by railroads over needed land at the Bensenville Rail Yard, owned by Canadian Pacific, for I-490. In June, the tollway came to an agreement with Canadian Pacific and in November came to an agreement with Union Pacific. Although some details still need to be worked out, tollway officials said the two agreements allow the I-490 project to move forward.

Part of the Route 390 project saw a interchange built at Elmhurst Road helping truck traffic moving in and out of Elk Grove Village.

Students Show Business Skills

The link between students attending schools serving the village and the business community remained strong in 2018 as Elk Grove High School showed off its Career Pathways program and five Conant High School graduates launched a vermiculture composting business.

U.S. Rep. Raja Krishnamoorthi (D-8th) toured customized classrooms at Elk Grove High School used to teach hands-on skills in engineering, high tech manufacturing, computer coding, computer aided drafting, automotive repair, criminal justice, graphic arts, health care, broadcasting and education in August.

Legislation Krishnamoorthi sponsored would provide additional federal dollars for school vocational training programs.

Five Conant High School students walked into their first day of a business incubator class in August 2016. Two years and two pitch contests wins later, GreenDirt LLC is up and running in an 1,800 square foot facility in Arlington Heights, converting 200 lbs. of food scrap into rich fertilizer each day.

Residential and business customers from five communities pay GreenDirt to pick up buckets of food scrap on a weekly basis. The leftovers are processed into a rich, nutrient-filled soil, sold at garden stores and other wholesale and retail outlets as GreenDirt. In three composting machines, around 120,000 worms digest and break down the food scraps, leaving behind “worm castings” that provide a fertilizer in the soil.

April 2017, the Conant students won the Conant Incubator School Pitch Night. By that summer, their concept and pitches netted GreenDirt $40,000 in start up money.

Opioid Treatment Program

Village officials rolled out their new Elk Grove Village Cares comprehensive opioid addiction program in late June. The program allows those suffering addictions to turn themselves into police and go directly into a treatment program without fear of facing drug charges.

The multifaceted program includes buy-in from local businesses, two dozen of which allowed the village to place Narcan treatment kits in their businesses. Besides local businesses, Narcan kits were placed with village external automated defibrillators.

Narcan, also known by its generic name naloxone, is a nasal spray which can counteract the effects of opioids such heroin or oxycodone and stop an overdose.

Police and firefighters have held classes to teach people how to administer the drug, look for and treat signs of medical distress.

Johnson said the impacts on business from the opioid addiction crisis are significant, including lost productivity and employee theft.

The program works with outside social service agencies and addiction treatment providers. Deputy Police Chief Michael Gaspari attended a national U.S. Justice Dept. gathering in Texas to detail the program that senior Justice officials called “revolutionary.”

Leading By Example

LA-CO Industries, a family owned, global, Elk Grove Village business specializing in industrial hand-held markers, plumbing chemicals and livestock identification products, received the Business Excellence For Community Support Award at the village’s Made in Elk Grove Manufacturing & Technology Expo in October at Elk Grove High School.

The company was lauded for creating a handbook, aptly named HOPE (Hiring Opportunity Preparation Execution), for hiring people with disabilities. The handbook is serving as a model for other companies.

Company officials said the company’s employee turnover rate has plummeted, falling from 44 percent to 11 percent since the program began. Employee morale also skyrocketed.

Tim Engstrom, head of supply chain and logistics at LA-CO Industries and instructor at Elmhurst College, developed the handbook with his graduate students at Elmhurst College.

Business Excellence Awards

Johnson hosted 96 companies at the village’s sixth annual Made in Elk Grove Manufacturing & Technology Expo at Elk Grove High School on a Monday in October, with the goal of keeping products used up and down the supply chain by village businesses “Made in Elk Grove.”

Deputy Gov. Leslie Munger presented the 2018 Business Excellence Awards to five companies. Winners included LA-CO Industries for community support, the Brennan Investment Group for industrial development, Permatron for sustainability, Procom for innovation and Elk Grove High School senior Kacper Migacz for excellence in manufacturing education.

Brennan Investment Group officials broke ground on the 1.2 million square foot Elk Grove Technology Park, one of the largest developments in the village’s history representing about $1 billion in investment, in July.

Migacz won repeated awards at the SkillsUSA state competitions for the last three years. He also took nearly every manufacturing and engineering class offered at the Elk Grove High School.

Procom is a leader in custom electronic systems and intelligent control technologies. Permatron recently expanded its line of environment-safe products.

Town Center

Planet Fitness is expected to open an 18,000 square foot health club early next year in part of the former 72,000 square foot Joe Caputo & Sons Fruit Market and Dominick’s anchor tenant site of the Elk Grove Town Center Shopping Center at the southwest corner of Arlington Heights and Biesterfield roads.

Johnson said there are ongoing inquiries and discussions with developers to fill the remaining 54,000 square feet of vacant space in the anchor tenant space.

Former Town Center owner Brixmor Holdings sold part of the shopping center, including the anchor store, this summer to Elk Grove Holdings LLC, a private development group affiliated with Elk Grove Village municipal government.

Village trustees approved a four-year tax increment financing development agreement with Elk Grove Holdings which could see developers receive as much as $500,000 per year. Johnson said the TIF generates about $800,000 per year.

The agreement, which includes Brixmor, requires Brixmor to make $100,000 in specific repairs and improvements to the Town Center.

The agreement also contains a “no lights out” clause requiring Elk Grove Holdings to repay TIF funds if the property experiences sustained vacancy.

Brixmor Holdings owned the shopping center for about 15 years. After many years in business, Dominick’s closed its Elk Grove Town Center location in 2013, along with all other Dominick’s stores in the greater Chicago area. In November 2015, Joe Caputo & Sons Fruit Market opened in the space, but closed by February 2016.

Author: Tom Robb
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