What's next for Elliott? Tax break in hand, aviation company to announce plans

Posted Online: Feb. 16, 2013, 9:29 pm
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By Stephen Elliott, selliott@qconline.com
Elliott Aviation, a new permanent exemption from real-estate taxes in hand, will announce its plans for its Quad-Cities operations late this month, a spokesman said Friday.

Andrew Evans, marketing director for Elliott, said the fixed-base operator will reveal the plans during the week of Feb. 25. He said the exact date will be determined as the event is coordinated with the Chamber of Commerce and state officials.

Elliott, while requesting area legislators push the exemption into law, said the change could bring 300 to 400 jobs to the Quad-Cities that otherwise might go to Elliott locations in states that do grant such exemptions to fixed-base operators.

The bill, signed into law by Gov. Pat Quinn Feb. 1 and limited in impact to Elliott, says, "If property of the Metropolitan Airport Authority of Rock Island County is leased to a fixed-base operator thatprovides aeronautical services to the public, then those leasehold interests and any improvements thereon are exempt."

The bill attaches no conditions to the exemption for Elliott, which paid $220,000 in real-estate taxes in 2012.

Local governments worry

Some officials in the 10 local governments that will lose revenue -- they receive funds from taxes collected -- said this week they wish Elliott well, but remain concerned about the loss of income and by the possibility the Elliott exemption will be used as a precedent by other firms seeking tax breaks.

Dave McDermott, chief financial officer of the Moline School District -- which faces an annual loss of $150,000 -- said, "I hope ... the jobs are created and they (employees) stay in Illinois and don't go to Iowa."

He worries that other businesses may want special tax-exempt status now that Elliott opened the door to that avenue.

"That's our fear," Mr. McDermott said.

The Coal Valley Fire Protection District also is among the 10 local agencies hit by the exemption. Chief Dave Dunham said, "We're losing $15,000 a year from our operating budget when times are tough. And, where do you squeeze another $15,000 out of the budget?"

The chief said the fire protection district's annual budget is approximately $400,000.

"I'm all for economic development, but it costs us money every single day to pay the lights and the gas bill," Chief Dunham said. He said his department responds to fire and medical calls at the airport, including those from the Elliott area.

He said, too, he is worried about the impact on other taxpayers, who may end up paying more. "It's very frustrating some days to look at a budget and squeeze a nickel out of a penny. You can't tax people to death. They'll move out."

Asset or annoyance?

Moline School Superintent David Moyer said, "I still have some very serious concerns with what was done ... and what type of precedent it sets, and the overall general attitude of the state and business community towards the priorities of public education as an asset to overall community health, as opposed to some type of annoyance that needs to be tolerated."

Mr. Moyer said he's also concerned about other companies seeking similar tax incentives.

Steve Brown, spokesman for Illinois House Speaker Michael Madigan, said it's hard to say if the Elliott bill will set a precedent for other businesses to seek tax-exempt status.

"I don't know if there will be a big rush on those kinds of proposals," Mr. Brown said. "I'm not sure that's a signal this is going to send to companies all over the state in droves making that kind of request.

"The state tries to be judicious where there are tax incentives for companies to stay and expand."

Mr. Brown said if somebody is going to advance an idea for a tax incentive, "they need to be persuasive to a wide range of legislators. I think legislators from your area were proponents."`

Mr. McDermott said State Rep. Pat Verschoore, D-Milan, and Sen. Mike Jacobs, D-East Moline, "have been very good to education" but "were put in a bad spot, and they tried to broker an agreement. Elliott is part of the community. They're adding jobs, and that's great. But, we (school district) get funding through taxation. They went around the spirit of the law."

Lawmaker sees no problem

Sen. Jacobs, who co-sponsored the tax break bill with Rep. Verschoore and former Rep. Rich Morthland, a Cordova Republican, said he doesn't believe Elliott's tax-exempt status will create problems.

"That happens on a day-to-day basis," Sen. Jacobs said of tax-break requests. "I think, as legislators, we look at things that are serious. Elliott was heavily recruited by other states trying to take our business."

He said while the company is under no formal obligation to provide additional jobs, legislators could always come back and take the company's tax-exempt status away.

"We (legislators) had to make a decision. We might not like it, but that's the way things work. I will monitor it and see if they do what they said they were going to do. If they don't, what the government giveth, the government can taketh away."

Rep. Verschoore said the company assured him it was going to expand. He said Elliott wanted to buy the Deere & Co. hangar at the airport and build around it.

"That's why we pushed to get this (bill) passed," Rep. Verschoore said. "They're definitely going to expand. That was the deal."

Competitive disadvantage

In May 2012, while the bill was pending before the legislature, Mr. Evans said in an email to The Dispatch/Argus that Elliott's company's growth concept included a long-term lease of an existing hangar and the construction of new facilities in the same area at the Quad City International Airport.

He said then that the company is at a competitive disadvantage relative to similar businesses in surrounding states, specifically in Iowa, Nebraska and Michigan, where fixed-base operators on airport property are tax-exempt.

Bill Martin, senior vice president of economic development for the Quad City Chamber of Commerce, which lobbied in support of the tax exemption, said in December that Elliott's request was not unreasonable.

"Elliott doesn't automatically get business here," Mr. Martin said. "They have to bid on it. Bids for new work are based on their cost. If the business climate isn't conducive to them getting new work, there won't be jobs here."

The tax exemption signed into law Feb. 1 follows 10-year partial exemptions granted in 2002 by the Moline School District, Rock Island County, Black Hawk College and the airport authority.

The firm said then it would work with the Quad Cities Chamber of Commerce to establish a plan for the Moline School District to develop school-to-work programs, job opportunities, classroom presentations and other programs, including donating any computer equipment it no longer plans to use to the school district.

School officials said during a board meeting in May 2012 that the arrangement lasted for about a year. Mr. Evans said in December that Elliott had fulfilled its obligations.

Where Elliott's real-estate taxes went

Taxes collected from Elliott Aviation from two parcels of land.

Total amount of 2011 taxes collected payable in 2012 was $220,599.60

Combining the parcels, taxes were collected for:

Rock Island County  - $22,521.15

Rock Island County Forest Preserve - $2,746.78

Coal Valley Township - $2,636.20

Coal Valley Township Road & Bridge -  $3,800.08

Moline School District - $147,231.27

Coal Valley Fire Protection District - $15,246.88

Metro Air Authority - $2,182.28

Robert R. Jones Public Library - $6,605.04

Black Hawk College - $15,622.22

Coal Valley Fire Protection District Bond - $2,007.70


Local events heading

  Today is Monday, Oct. 20, the 293rd day of 2014. There are 72 days left in the year.

1864 -- 150 years ago: The store of Devoe and Crampton was entered and robbed of about $500 worth of gold pens and pocket cutlery last night.
1889 -- 125 years ago: Michael Malloy was named president of the Tri-City Stone Cutters Union.
1914 -- 100 years ago: Dewitte C. Poole, former Moline newspaperman serving as vice consul general for the United States government in Paris, declared in a letter to friends that the once gay Paris is a city of sadness and desolation.
1939 -- 75 years ago: Plans for the construction of an $80,000 wholesale bakery at 2011 4th Ave. were announced by Harry and Nick Coin, of Rock Island. It is to be known as the Banquet Bakery.
1964 -- 50 years ago: An application has been filed for a state permit to organize a savings and loan association in Moline, it was announced. The applicants are Ben Butterworth, A.B. Lundahl, C. Richard Evans, John Harris, George Crampton and William Getz, all of Moline, Charles Roberts, Rock Island, and Charles Johnson, of Hampton.
1989 -- 25 years ago: Indian summer is quickly disappearing as temperatures slide into the 40s and 50s this week. Last week, highs were in the 80s.

(More History)