City to sell steelmaker 13 acres for $1
(Crain's) — The city of Chicago has agreed to sell six vacant Southeast Side properties for $1 to A. Finkl & Sons Co. as part of the steelmaker's plan to move there from its longtime headquarters on the western edge of Lincoln Park.
After mulling a move to Canada, Finkl decided last year to relocate to the former Verson Steel plant at 1355 E. 93rd St., a property it bought in 2006. The project will keep 300 factory jobs in Chicago, a rare piece of good news in a city that has seen its industrial base shrink further in the recession.
Related story: Steelmaker staying put
In addition to the Verson site, Finkl needs the adjacent land from the city for storage, to move an existing railroad line and to provide a buffer between the factory and nearby residential development, according to a report to the Community Development Commission (CDC), which approved the land sale Tuesday.
Though the company would pay the city just $1, the six parcels, which cover 13.3 acres, have been appraised at $934,500, according to the report.
Finkl and the city also are "involved in productive discussions" over additional financial incentives, including tax-increment financing (TIF), the report says.
A spokeswoman for the commission declines to disclose how much assistance the city has offered, but a TIF grant typically covers about 15% to 20% of a project's cost, says Samuel Polsky, a Chicago attorney who specializes in TIF issues.
With the Finkl project projected to cost $149 million, that means Finkl could get as much as $30 million in TIF money.
Bruce Liimatainen, Finkl's chairman and CEO, did not return phone calls.
Founded in 1879 and acquired by German manufacturer Schmolz & Bickenbach A.G. in 2007, Finkl has outgrown its current factory at 2011 N. Southport Ave. Including the city land, the Southeast Side property covers 44 acre acres and includes eight buildings encompassing about 500,000 square feet.
Finkl plans to construct four new buildings totaling 106,000 square feet on the site, the CDC report says.
The largest of the six properties being sold in the one-dollar deal is an 11-acre parcel at 9001 S. Woodlawn.
The City Council still must approve the land sale. Any TIF subsidy would also need the blessing of the CDC and City Council.
Separately, the CDC on Tuesday approved a proposal to provide a $15-million TIF grant to CME Group Inc. In return, the CME has agreed to keep its headquarters in Chicago, retain its current workforce of 1,750 people and add at least 638 jobs in the city over 10 years, according to a report to the CDC.
Related story: CME wants city subsidy for renovation
The CME sought the city's assistance back in 2007, when InterContinental Exchange Inc. (ICE) emerged as a competing bidder for the Chicago Board of Trade, which had agreed to a sale to the Merc.
Had Atlanta-based ICE prevailed, "it is likely that they would have moved the headquarters and many CBOT jobs to Atlanta," so the city offered financial help allowing the CME to boost its price, the report says.
Also, Nymex Holdings Inc., which the CME acquired in 2008, had excess space at an office building it owns in Manhattan, raising the prospect that CME would move some jobs there, the report says. The TIF subsidy will prevent that from happening, according to the report.
