Part of Sara Lee’s corporate headquarters is coming “home” to Chicago – along with up to 650 jobs – thanks to a $6.5 million city subsidy that’s a first for Mayor Rahm Emanuel.
Sara Lee was headquartered in Chicago for more than 60 years before a 2005 consolidation moved the company to Downers Grove, where more than 1,000 employees are located.
Early next year, Sara Lee is splitting into two publicly traded companies – one focused on American meats, the other on international coffee and tea.
It is the meat company – with a yet-to-be identified name that Executive Chairman Jan Bennink vowed would be a lot more imaginative than “MeatCo” – that will make the move to 400 S. Jefferson in early 2013. The international beverage company is expected to be headquartered in Europe.
The plan calls for the antiquated building to be gutted and renovated at a cost of $60 million that does not include moving costs, interior finishes or furniture.
That’s where the city subsidy comes in.
“I wouldn’t call it a deal-breaker. It’s something that is important,” Bennink told a news conference at the soon-to-be-rehabbed building.
“This is a major investment we’re gonna make. Building the building, moving everybody over…. In order to make this massive investment – because we’re talking really big money coming here, making this office different – part is, of course, financial. Do we need it in order to, at some point, move the needle? Yes we do.”
The building is located in the Canal-Congress tax-increment-financing (TIF) district, from which the $6.5 million subsidy will be drawn.
Emanuel campaigned on a promise to reform TIF’s and limit subsidies to companies that create jobs and revitalize areas that would have a tough time attracting development if not for the city subsidy.
The mayor said he made the Sara Lee project the first city subsidy of his six-month tenure because it meets the “standard we wanted to have for economic growth.”
It’ll create “good-paying jobs” – at least 500 and as many as 650 permanent jobs and up to 300 temporary construction jobs – in a part of the Central Business District that “wanted to see expansion it hasn’t had before,” he said.
“We didn’t rely on it for everything….You have to do all of ’em. You can’t do just one of ’em and succeed. What has happened in the past is, we’ve tried to reduce our economic development to TIF’s,” he said.
“I want a highly educated, highly-motivated work force. I want us to invest in our infrastructure so we can move people and goods quickly. I want to make sure our schools are top of the line. I want to show ’em . . . we can put our budget in order. I wanted to tell them we were gonna cut the employee head tax. Every one of these things [is] part of our economic tool box. Not one of ’em – all of ’em.”
The mayor’s 2012 budget calls for cutting the $4-a-month employee head tax in half next July and eliminating the remaining $2 levy two years later.
The move to Chicago will leave Downers Grove with roughly 100 of its 1,000 Sara Lee employees.
Does that put Chicago at war with the suburbs over jobs?
“No. It’s just, we won,” said Emanuel, who likes to win and loves keeping score.
Reminded that his victory declaration “implies a battle,” the fiercely competitive mayor said, “No it doesn’t. It implies the DNA of an Emanuel.”
Before the move to Downers Grove, Sara Lee was headquartered at 70 W. Madison with 250 employees.
Sara Lee will get the first $1 million of the city subsidy in early 2014, one-year after a “certificate of completion” that calls for finishing the building renovation and relocating at least 500 jobs.
Every year after that for the next four years, the company will get an additional $1 million so long as it maintains at least 500 jobs at 400 S. Jefferson.
On the five-year anniversary of the move, Sara Lee could get another $1.5 million, but only if it then has at least 650 jobs at the South Loop location and maintains them for at least five more years.
