Blagojevich breaks ground on TargetDistribution center to bring 500 new jobs

Gov. Rod Blagojevich was in DeKalb this morning to officially break ground on Target Corp.'s 1.5 million-square-foot distribution center in Park 88. The center is expected to employ 500 people initially. Chronicle photo RENEE MESSACAR

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DeKALB - Gov. Rod Blagojevich stopped in DeKalb this morning to formally announce a $9.6 million package of tax breaks and other incentives for the development of a 1.5 million-square-foot Target Corp. distribution center on the south side of DeKalb. Construction of the project, to be located in the Park 88 industrial park along Fairview Drive, will create 500 jobs, Blagojevich said, as well as 500 more at the center once it has opened. Blagojevich was the key speaker this morning in a ceremony at Park 88 to formally announce the building of the center. With earth-moving equipment at work in the background, Blagojevich said the incentives were just one part of a formula for attracting business that includes investing in education, health care and public safety. "We'll continue to stay the course in the policies we've developed," he said. Blagojevich and other officials at the ceremony pointed out that the Target project would be a linchpin for development in the wider northern Illinois region. "A new distribution center can help catalyze business growth across the local economy," said Jack Lavin, director of the state Department of Commerce and Economic Opportunity. "In this global economy, companies have choices, and Target chose DeKalb." Mitch Stover, senior vice president of distribution services with Target Corp., complimented the DeKalb community and the state for the work they did to lure the company's distribution center here. "There are lots of reasons you come to a city," Stover said. "This is a state that really knows how to get it done." Stover said Target has its own internal rating system for communities in which it is looking to build. DeKalb was the first to get a perfect score on that rating system. He also reminded the 100 or so people who turned out for today's event that Target donates about $2 million a week to charitable efforts in the communities where it has stores. Construction of the $100 million project is just getting under way. The jobs it creates will go toward offsetting the approximately 4,000 jobs that have left DeKalb County in the last six to seven years. The distribution center is expected to be fully operational by November 2006. "We're thrilled that Target has decided to locate a new distribution center in DeKalb that will bring hundreds of new jobs to the community," Blagojevich said in a statement released this morning. "By being pro-active and ensuring that businesses have all the tools they need to compete and thrive, we're creating a very appealing business climate that is continuing to lure nationally successful companies like Target to Illinois. Our goal is to make Illinois the most attractive state to do business in, and we'll never stop working to make that happen." The project had been in the works for nearly a year, originally going by the code name "Temecula." The Chronicle reported in early June that Target was the company negotiating with city and state officials, and the city confirmed that about a month later. Target will be the industrial park's first permanent tenant, although space there has been leased out to Del Monte for two years. Park 88 was first launched in 2000, and its first spec building went up in 2001. "DeKalb was the ideal location for us to locate a new distribution center," Stover said in a statement. "The partnership we received from the city of DeKalb and the state of Illinois was extraordinary. We look forward to building a long-lasting relationship with the DeKalb community." The city of DeKalb, the DeKalb School District and the seven other local taxing bodies that include Park 88 have already committed to abate or rebate some $3.75 million in expected property taxes on the project. The company will get a 90 percent break in its first year of operation, an 80 percent break in its second, and so on until year six, when taxes will be paid in full. The city also has agreed to waive building fees and provide other financial help to cover infrastructure work on the project. Those costs come to about $1.4 million. The total of all incentives from state and local governments comes to between $14 million and $15 million. DeKalb Mayor Greg Sparrow said that in his 20 years as mayor, the Target center is the largest economic development project he has seen. Addressing Blagojevich and gesturing toward the 460-acre industrial park, he said he hoped it wasn't the last time the governor made the trip to DeKalb, "because I have big plans for what you're looking at." According to the development agreement signed with the city of DeKalb, Target has agreed to initially create some 500 jobs at the site, almost all of which would pay at least $12 an hour. The payroll is expected to rise by hundreds of jobs by the center's third year of operation, when the staff could total about 1,000 people, Stover said. An analysis by Northern Illinois University estimates that every $1 million in wages paid at the distribution center will generate another $565,000 in economic activity in the area. The center's payroll is initially expected to be about $20 million a year. With the General Assembly's veto session beginning today, the governor said he would not support any move to increase the state's income or sales taxes. He also complimented the Northern Illinois University Huskie football team on the winning season it's having. "And all I will tell you is that they didn't do that good when the other guy was governor," he quipped. Chris Rickert can be reached at crickert@pulitzer.net.