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TO: Mayor Robert J. O’Connor
FROM: Bill Wiet, Chief Development Services Officer
DATE: April 21, 2017
SUBJECT:
To provide Nutrivo, a sports nutrition manufacturing facility at 1785 North Edgelawn, a property tax rebate of $99,000 to be paid over a ten year period. Also, The West Aurora School District has partnered to support this project with a property tax rebate of $299,000 from the District to be paid over the same ten year period. Rebated funds would only come from property taxes generated at the facility
PURPOSE:
Nutrivo, a sports nutrition manufacturing company, is considering options for expanding production. Nutrivo currently operates a facility in Aurora, as well as a facility in South Carolina. Nutrivo has requested public financial assistance for the prospective expansion of their facility in Aurora. The proposed project includes facility expansion of 92,000 square feet, as well as rehabilitation of the current facility and purchase of new machinery and equipment. Total project costs are $6,500,000
BACKGROUND:
Nutrivo has worked with the Illinois Department of Commerce and Economic Opportunity and has secured an Economic Development for a Growing Economy (EDGE) grant. EDGE provides tax credits as an investment incentive to companies considering expanding in another state. Nutrivo is also requesting a property tax abatement from the City of Aurora (20% of total tax assessment) and the local School District 131 (60% of total tax assessment). Invest Aurora has analyzed the current tax bill and estimates future tax assessment of approximately $1.10 per square foot. Based on this estimate, Invest Aurora recommends a property tax abatement of $396,000 over 10 years.
DISCUSSION:
The abatement is contingent upon meeting payroll projections of at least 15 additional jobs per year, with each position paying an average of $36,000 annually plus benefits. Payroll will be verified through annual reporting to the Department of Employment and Security. Any employees above 15 will be credited to future years. If Nutrivo fails to add fifteen additional employees and/or maintain the average $36,000 annual wage for any two year period then the agreement shall immediately expire; no abatement will made for that year or for any subsequent year. The incentive being afforded will be abated on the newly constructed addition only. Should that addition not generate the necessary property tax abatement then the City shall be under no obligation to make up the difference. The property owner will not be allowed to challenge their first year tax bill to ensure it is within market value after consenting the City of Aurora. The property tax bill for the next nine years cannot be challenged without the consent of the City of Aurora. Nutrivo also agrees to become a contributing member to the School District 129 A+ Foundation.
IMPACT STATEMENT:
This agreement if approved will have a positive impact in further expanding manufacturing facilities and job opportunities in Aurora.
RECOMMENDATIONS:
It is recommended that the agreement with Nutrivo for a property tax rebate of $99,000 be approved.
cc: Alderman O’Connor, Chairman
Alderman Mervine
Alderman Bohman
Alderman Mesiacos, Alternate
CITY OF AURORA, ILLINOIS
RESOLUTION NO. _________
DATE OF PASSAGE ________________
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A Resolution Approving Agreement between the City of Aurora, West Aurora School District 129 and Nutrivo LLC, regarding a Property Tax Abatement for the Expansion of the Nutrivo Facility at 1785 North Edgelawn
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WHEREAS, the City of Aurora has a population of more than 25,000 persons and is, therefore, a home rule unit under subsection (a) of Section 6 of Article VII of the Illinois Constitution of 1970; and
WHEREAS, subject to said Section, a home rule unit may exercise any power and perform any function pertaining to its government and affairs for the protection of the public health, safety, morals, and welfare; and
WHEREAS, Nutrivo, LLC, a sports nutrition manufacturing company located at 1785 North Edgelawn in the City of Aurora, is desirous of expanding their facility by adding approximately 91,721 square feet of manufacturing space, rehabilitating the current manufacturing space and purchasing new machinery and equipment, with an estimated project cost of $6.5 million dollars; and
WHEREAS, in order that Nutrivo proceed with this expansion project, the City of Aurora and School District 129 have agreed to provide Nutrivo with a real estate tax abatement on certain real estate taxes assessed by the City and School District against the Nutrivo property, all as set forth in the tax rebate agreement attached hereto and incorporated by reference herein; and
WHEREAS, it is in the best interests of the City of Aurora and its residents to enter into said tax abatement agreement for the Nutrivo expansion project in accordance with the provisions contained in said agreement)
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Aurora, Illinois, as follows: That the Agreement Between the City of Aurora, West Aurora School District 129 and Nutrivo LLC in regards to a Property Tax Abatement Relative to the Expansion of the Project Muscle Facility at 1785 North Edgelawn, as set forth in the attached Agreement, is hereby approved.