Marengo plans a business boom. It needs McHenry County’s help. Here’s how.

Enterprise zone in McHenry County soon to include Marengo, hoping to help grow economy of region

A sign announcing a new travel center in the I-90/Route 23 corridor on Tuesday, July 26, 2022. A year after Marengo's mayoral race drew attention to development of the I-90/Route 23 corridor, both city and county officials are optimistic that the area could seen be a hub of both industrial and commercial activity.

A few years ago, Pedigree Ovens founder Kurt Stricker was fielding multiple offers from Wisconsin towns to take his business out of Illinois.

The Harvard-based food manufacturer always had been in McHenry County, Stricker said, but when weighed against what he was being offered, the reasons to keep it there were shrinking.

Yet today, the business, which has been renamed PetDine since being bought by ADM, remains in town, and has expanded its operations to the tune of nearly $40 million. Stricker attributes the decision to stay rooted in McHenry County to the area’s enterprise zone.

“The enterprise zone got us back to even par with the incentives from Wisconsin,” he said. “It really helped us to decide … to stay in Illinois.”

After nearly seven years of activity, the enterprise zone in McHenry County has seen dozens of business take advantage of its benefits, which in turn has helped the economy of the area, the zone’s administrator Charles Eldredge said.

Currently containing Harvard and Woodstock, along with parts of unincorporated McHenry County, the zone is gearing up to add its third city in Marengo, which officials think could be home to significant development activity in the coming decades.

With all three cities, along with the county, having already approved the addition, it’s all up to the state to sign off, which officials expect in the coming months. Once added, the zone, currently called the Harvard/Woodstock Enterprise Zone, will become the McHenry County Enterprise Zone.

Officials with each town said the zone has helped their respective communities in a variety of ways, and bringing Marengo into the fold is something that could benefit the region in general, Eldredge said.

Recent improvements at the Route 23 and Interstate 90 interchange in Marengo could see manufacturing come into the area, which some officials have said could result in commercial as well. A few officials across the area, including Marengo Mayor John Koziol, said they think the enterprise zone could help the interchange grow quicker.

“This is just something to try to entice people to come out here,” Koziol said.

An enterprise zone provides a variety of benefits within a certain geographical area, with the goal of helping economic growth. In McHenry County, the zone is helping its western rural parts grow, Harvard Mayor Michael Kelly said.

“Any additional business that locates to western McHenry County is good for all of us,” he said.

McHenry County’s tax base is also made up almost entirely by property taxes, Eldredge said. Adding business to the area could help shift the burden, which in turn could bring down property taxes across the board.

“I would say our zone has been very successful,” Eldredge said. “We have gotten some significant number of businesses that would not have been located [here] except for the benefits of the zone.”

While the zone does offer benefits, Eldredge stopped short of saying it’s the reason a business may come. Instead, he likened it to a tie-breaker, saying it can “get you over the top.”

The zone has been in place since the beginning of 2016. After the state revamped its laws for the zones more than a decade ago, all active enterprise zones had to reapply, Eldredge said. Some, as a result, were not reapproved, which left openings available. McHenry County, which had never had an enterprise zone before then, took advantage and applied.

Since going into effect, Woodstock Mayor Mike Turner said the zone has been an important component to the city’s discussions with developers. He called it an “attention getter,” saying he thinks it entices businesses.

About two dozen projects in Woodstock have used benefits from the zone in the last few years, Economic Development Director Garrett Anderson said. Some of those include the city’s Old Courthouse renovations, Cedarhurst Senior Living and the Casey’s store on the south end of town.

“I’m very supportive of the enterprise zone,” Turner said. “I believe it does make a difference.”

The Old Courthouse and Sheriff’s House is photographed Tuesday, March 1, 2022, in Woodstock. The renovation of the courthouse has started, with construction and demolition underway.

County Board Chairman Mike Buehler, R-Crystal Lake, said in its current form, the zone is not using the full amount it is geographically allowed to. Adding Marengo will see more space utilized.

“I think [the zone] is one of the most effective tools … to attract businesses to the rural areas of McHenry County,” Buehler said.

The zone works by offering businesses who work within it certain benefits on both the local and state levels.

In McHenry County, those working on construction projects that qualify don’t have to pay state sales tax on materials used in the project, Anderson said. For example, a project that costs $5 million in material can save around $300,000.

A business can also get half a percentage of the total project taken off its state income tax.

On the local level, the zone offers breaks on property taxes, along with a reduction in permit and inspection fees, Eldredge said.

It’s also an easier incentive to use compared to other economic tools, Anderson said.

Unlike other districts and zones that provide incentives, such as tax increment financing districts, also known as TIFs, there isn’t an approval process needed to receive benefits from an enterprise zone, Anderson said.

“As long as you’re investing inside the zone, you’re approved,” Anderson said. “That makes it a whole lot more attractive to people that are using it.”

Harvard’s Kelly said he thinks it also incentives businesses already in town to stay and expand. Or if they move into a building that is already constructed, there isn’t much benefit to be had unless they make changes.

“If they don’t add value to the property, there’s not really much benefit,” he said.

Benefits on the local level, along with what qualifies, can vary from zone to zone, Eldredge said. Some, for example, allow residential projects to qualify, though McHenry County’s doesn’t.

Currently, the county and cities are waiting for the state to give the final thumbs up on the addition of Marengo, Eldredge said. Before it can become official, it has to go through the state’s Department of Agriculture before getting a final sign-off from the Illinois Department of Commerce and Economic Opportunity.

“This is government bureaucracy,” he said. “These things almost automatically get approved. … It just takes a long time.”