One of Champaign County’s largest employers will move its corporate headquarters to Chicago after receiving local and state tax breaks the last two years.
Rittal Corp.’s move will mean 40 new jobs for Illinois, but one local official said the decision also could lead to more production jobs in Urbana.
Rittal, which employs more than 700 people in Champaign County, has had its headquarters in Urbana since 2011. Just two years ago, the company received a tax exemption from the city, allowing it to expand operations, retain 545 workers and add at least 120 jobs.
The company has received tax credits from Ohio as well, and is eligible for tax credits in Illinois, according to information from the Illinois Governor’s Office.
Records from the Champaign County Auditor’s Office show Rittal is the eighth-largest taxpayer in Champaign County.
While some of its high-paying executive positions will move to Illinois, production lines are expected to remain in Urbana, said Marcia Bailey, economic development coordinator for Champaign County.
Company officials could not be reached for comment despite several calls Thursday. Rittal’s press release said the company will invest in a multi-million dollar upgrade to Urbana’s production lines, but gave no further details.
Executives from the company met with Illinois Gov. Pat Quinn on Thursday and announced it is opening a new corporate office in Schaumburg, Ill., a suburb northwest of Chicago.
The 40 jobs will include the company’s executives, as well as sales leadership, marketing and product management staff. The Illinois facility is expected to be open in September and will include space for product testing, as well as a large-scale product showroom.
The announcement is a mixed bag for Urbana, Bailey said.
“I don’t have any reason not to think production will be increased,” Bailey said.
Bailey said she does not expect a significant loss of jobs and said the Urbana facility is still among the company’s largest. That means customers who want a first-hand look at Rittal’s products are still likely to come to Urbana, she said.
Rittal produces computer racks and enclosures, among other products.
“In reality, if a buyer wants to actually see the products, we’d still have that influx coming in,” Bailey said.
Urbana Mayor Bill Bean said the impact on the city may be minimal because the production lines will likely remain in place. The company has made a significant investment in the Urbana plant in the past several years, Bean said.
“I’m hopeful that they’ll bring in more people and expand their line,” Bean said.
Bailey said the move is unlikely to affect the incentives the company received when it announced the expansion at its Urbana facility two years ago.
Rittal Corp. was awarded a state tax credit effective January 2012 in exchange for a commitment to create 118 full-time jobs, generating $4.4 million in additional payroll and retaining 531 jobs. The 7-year, 55-percent tax credit was approved by the Ohio Tax Credit Authority in July 2011 as recommended by JobsOhio, Gov. John Kasich’s nonprofit economic development organization. At the time, Rittal’s investment was valued at $6.6 million.
It was unclear Thursday whether Rittal will receive its Ohio benefit. The company has three probationary years to generate jobs and payroll, according to a Development Services Agency spokesperson.
Rittal filed its first report on the agreement in spring 2013, which will be audited before any benefits are awarded. During the first three years, Rittal does not have to meet the commitment but can receive a tax credit proportional to the number of new jobs and amount of new payroll generated.
Rittal committed to maintain operations in the state for 10 years.
JobsOhio spokeswoman Laura Jones said the organization is excited about Rittal’s future in Ohio.
“We are very pleased that Rittal is part of the Ohio economy and excited about the ongoing commitment it is showing through job creation and investment in its operations here in Ohio,” Jones said in an email. “The company has a long history with Ohio, and we look forward to continuing that relationship.”
Urbana City Council members also approved a resolution that includes a tax exemption for 75 percent of the real property tax for 10 years for the $6.7 million expansion in Urbana.
A press release from the Illinois governor’s office showed in that state, Rittal will also be eligible for tax credits under the Economic Development for a Growing Economy program, administered by the Illinois Department of Commerce and Economic Opportunity.
“The tax credits, based on job creation, can be used against corporate income taxes to be paid over up to 10 years,” according to the press release.
However, Bailey said the city’s tax incentives were tied to the jobs they created, and the company has met the standards required to receive those credits. Rittal is located within an enterprise zone, a economic development tool that allows city and county governments to provide tax exemptions to companies that invest in the state.
The city reviews the company’s tax exemptions annually, Bailey said.
According to its website, Rittal Corp. was founded in Springfield in 1982 and is a subsidiary of Rittal GmbH and Co. KG in Germany. Its parent company, Rittal, was founded in Germany in 1961. The parent company has offices in 70 countries and manufacturing facilities on four continents.
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