Tag: new business

Council approves Montclaire Business District Special sales tax will be used for upgrades

The Montclaire Shopping Center will receive a major overhaul in the near future.  

Redevelopment within the Montclaire Business District was approved with a 5-2 vote at last week’s Edwardsville City Council meeting.

Aldermen Barb Stamer, Tom Butts, Art Risavy, Jeanette Mallon and Will Krause were in favor of the motion; aldermen Craig Louer and Janet Stack were opposed.

The approved resolution authorizes an agreement for the city to encourage redevelopment and renovations in the district, anticipating a cost of $2.2 million. The improvements will include new facades on buildings, rotomill and resurfacing of the parking lot, retaining wall by the Rapid Lube building, rear screening, landscaping, lighting upgrades and storm water drainage improvements.

The developer, Jones Edwardsville Properties, has requested reimbursement from the city in the amount of $1,393,566 after the improvements have been made.

As discussion ensued, Louer said he was opposed to the resolution, as he was concerned about surrounding neighbors and taxpayers.

“If we were to do it, which I hope we don’t, I’d like to see a commitment to all parts of that project. With regard to the estimated costs…what we’re doing is taxing the people to shop there; we’re taxing our citizens to make improvements to private property. In some instances, I think I can justify it in my mind and those instances are instances where we’re asking a developer to go over and above what he would normally have to do in order to provide some extra protection or some amenities for our neighbors — one of those is a wall,” Louer said. “When you get to the façade for buildings, I look at those as investments that an owner should make on his own property. I want higher rent for a house I own, I clean it up and I get higher rent for it…I think it’s inappropriate for us to tax citizens to support the improvements on private property. I think that’s the owner’s responsibility.”

The city has no direct financial obligation with the developer and the costs that will be reimbursed must be eligible through the collection of business district taxes. Taxpayers who shop at the facility will also face a 1 percent Business District Tax.

“I can’t support it,” Louer said. “This is $1.3 million that we are going to tax our citizens and we are going to use approximately $600,000 of to improve private property. As I’ve said before, I’d be willing to vote for this if we limited the cost to the things that I think we’re asking for over and above.”

Butts was in favor of the motion and said he believes this is the best way to get the needed improvements completed.

“I think this is our best hope to get that blighted area. To the question of would we allow it for somebody else who wanted to come in and form a business district? I think we’d give it the same consideration we gave this – absolutely. We did it for Dierbergs,” Butts said. “This does not cost the city anything; it does cost our taxpayers who shop there an additional 1 percent. We had the same thing at Dierbergs. Dierbergs has been a huge success. If we can increase more sales, that’s more sales tax that the city gets as well.”

The additional Business District Tax, according to Butts, will not have a significant impact on the taxpayers who utilize the district.

“All the risk is on the developer. If he doesn’t have sales, if he doesn’t have tenants, if he doesn’t have people going to the cash register, he does not get his money back. I think it is not corporate welfare; I do not think we are putting a burden on our citizens. If they don’t want to shop there, they don’t have to shop there,” he said.

Discussion came to a close and the resolution passed.

For more information about the Montclaire Business District, visit the city’s website at cityofedwardsville.com.

Does Edwardsville Region have sufficient employees to satisfy existing Demand and future Demand?

timothy_sullivan8

Dr. Timothy Sullivan

Department of Economics & Finance Southern Illinois University Edwardsville

The recent announcement that Amazon will locate two new facilities in Madison County and hire 1,000 workers is good news for the region. But could these new jobs also create hiring issues in Madison County? Are there enough workers available in the region? Could the good news of Amazon’s arrival be offset by disruption in the local labor market as existing businesses find themselves unable to hire workers?

One extreme theoretical possibility is that the only qualified workers Amazon can hire are already fully employed. Under this unlikely scenario (what economists call “perfectly inelastic labor supply”), Amazon would lure workers away from existing businesses. These local employers, perhaps unable to match Amazon’s pay, would reduce employment by 1,000 jobs. Once the dust settled, there wouldn’t be any new jobs in the region – the only change would be that 1,000 workers would commute to Amazon instead of their current place of employment.

The opposite extreme theoretical possibility is that there are at least 1,000 qualified workers in the region who are currently unemployed or underemployed. Under this second scenario (what economists call “perfectly elastic labor supply,”) 1,000 unemployed workers would find work. Some would take new jobs at Amazon, while others would take over the jobs of currently employed workers who move to Amazon.

Of course it’s very unlikely that either of these extreme theoretical possibilities exactly describes the region’s labor market. The truth is somewhere in between. But where? The answer involves knowing the value of the elasticity of labor supply. In particular, we would need to know the elasticity of labor supply in our region among workers with the qualifications to be hired by Amazon. An elasticity close to zero would be consistent with the first scenario, where Amazon wouldn’t create any net jobs.  A large elasticity is consistent with the second scenario, where most of the 1,000 jobs will be new.

Unfortunately, while economists have studied labor supply elasticity for over 50 years, its numeric value is remarkably difficult to pin down. Economists find that labor supply elasticities can vary depending upon the occupation, the geographic location, the current state of the economy and whether we examine hours worked or the number of jobs. As a practical matter, calculating the 2016 labor supply elasticity for warehouse workers in Madison County is impossible.

Instead of trying to identify the precise number, economists often ask the following questions to gauge labor supply elasticities: (1) How does the number of new jobs compare with the number of people in the region who currently have the training and ability to perform the work? (2)  Of the people in the region who have the training or ability, how many are unemployed or underemployed? (3) How easy would it be for a new worker to obtain the necessary training to enter the occupation? Answering these three questions will give us some idea of the likely effects of Amazon’s arrival.

First, while 1,000 jobs is a welcomed addition to the local economy, it represents a fairly small portion of the local labor force. The latest numbers from the Bureau of Labor Statistics report over 135,000 members of the Madison County labor force. Adding in the bordering counties (including St. Louis and St. Louis County) puts the total labor force well over a million. Even within the specific occupations likely to be impacted, the 1,000 jobs are relatively small. The most recent government estimates list over 22,000 people in the St. Louis Metropolitan area working as “Laborers and Freight, Stock and Material Movers, Hand.” Another 5,000 have the classification “Packers and Packagers, Hand.” Adding in smaller occupations, such as “Transportation, Storage and Distribution Managers” would bump the value to well over 30,000 (Bureau of Labor Statistics, Occupational Employment Statistics, Metropolitan and Nonmetropolitan Area Occupational Employment and Wage Estimates, May 2015 data). In short, even if we use a fairly narrow definition of “affected labor force,” Amazon’s 1,000 jobs will represent, at most, about 3% of the workforce.

Regarding the second question, while unemployment rates have fallen since the height of the recession, unemployment in “Transportation and Material Moving Occupations” has remained stubbornly high. While occupation-level data aren’t available at the regional level, the most recent national-level data shows an unemployment rate of 7.5%. This is considerably higher than the overall national rate (5.1%), and it is one of the few occupational categories with a national unemployment rate that is higher today than it was a year ago. (Bureau of Labor Statistics, Employment Situation, Labor Force Statistics from the Current Population Survey, Table A-30, July 2016 data). With regards to local conditions, a recent analysis by CEB TalentNeuron, a consulting firm that analyzes local labor markets, rated the St. Louis Metropolitan area as number 10 in the nation for the availability of workers in the “Laborers and Freight, Stock, and Material Movers” occupation. CEB rated the hiring of workers in this occupation as “easy,” indicating a relatively large number of available workers in this occupation in the region.

Finally, most occupations in this category require comparatively little training, making them relatively easy to enter. According to the most recent national-level data, only 11% of workers in the “Laborers and Freight, Stock and Material Movers, Hand” occupation have a college degree, while about two-thirds have a high school diploma or less. The numbers are similar for “Packers and Packagers, Hand” (Bureau of Labor Statistics, Employment Projections, Educational Attainment for Workers 25 Years and Older by Detailed Occupation, Table 1.11, 2012-2013 data). The Bureau of Labor Statistics describes both occupation as requiring “no formal educational credential,” “no work experience in a related occupation” and “short term on-the-job training” (Bureau of Labor Statistics, Employment Projections, Education and Training Assignments by Detailed Occupation, Table 1.12, 2014 data). Thus it should be fairly easy for workers to move into the occupations being hired by Amazon.

Combined, these answers suggest that Amazon’s entry into the region will have a small-to-modest impact on local labor markets. First the 1,000 jobs will represent a relatively small portion of the local labor market. Second, unemployment in the affected occupations remains high, and analysis suggests that a fair amount of slack remains in the local labor market for those occupations. Finally, the most-affected occupations require little formal education, experience or training, making it fairly easy for workers in other occupations to change careers and apply for these jobs. In summary, the evidence suggests that Amazon will have little difficulty filling these 1,000 new positions. And, while the 1,000 jobs are exciting news for the region, they are unlikely to create much disruption.

The Scoop: Water Sweet Soap Company to Open in Edwardsville

The Scoop: Water Sweet Soap Company to Open in Edwardsville

The Edwardsville born Water Sweet Soap Company will open its first location in the newly renovated space at 112 North Main Street.  Gregg Sutterfield and his wife Lisa are excited about opening their first store.  Lisa has always wanted to open a shop to express her creative side.

The Sutterfield’s believe that they are not only opening a store, but also developing a new brand of artisan, handcrafted soap, bath, and body care products.  They are both manufacturer and retailer for the products.

Water Sweet Soap Company will carry handcrafted, small batch products that utilize natural ingredients to allow customers to “Bathe Clean” with no preservatives in any of the products.

The shop will carry over 40 different types of soap, including their regular line, men’s line, shampoo bars, shave bars, salt bars, bare bars (100 percent natural), and a line of coffee soaps that they are co-branding with Goshen Coffee.

There will also be other items like bath bombs, bubble scoops, sugar scrubs, lip balms, hair towels, soap dishes, etc.

Aldermen approve enterprise zone expansion Hurdle cleared for relocation of Prairie Farms headquarters

Posted: Monday, April 25, 2016 12:14 pm
By MATTHEW KAMP mkamp.edwi@gmail.com | 0 comments

The relocation of the Prairie Farms headquarters from Carlinville to Edwardsville took an important step Tuesday.
At the recent City Council meeting, Edwardsville aldermen approved the expansion of the enterprise zone to accommodate the move of Prairie Farms.

“Prairie Farms has expressed interest in moving to Edwardsville, and one of the prerequisites is having the enterprise zone available,” City Economic Development Director Walt Williams said.

The new $9 million, three-story headquarters would be located in the Edwardsville Corporate Center, located to the east of Interstate 55. Scott Credit Union and Hortica Insurance are currently located there.

Currently, the enterprise zone is 12-square acres with businesses taking up 5.5 to six acres. An additional six acres is being sought for the move.

“It’s a really small amount,” Williams said.
Once the move is complete, there will be the creation of 90 to 100 professional jobs, according to Williams.

Prairie Farms represents over 700 farm families and is one of the largest farmer-owned dairy cooperatives in the Midwest. Annual sales near $3 billion for the company that employs 5,700 and has 36 manufacturing plants.

Prairie Farms was founded in 1938.
Pontoon Beach and Madison County have already approved the resolutions for the expansion.

The project is estimated to take 18 months.

In other business, the aldermen approved a $6,000 tourism fund request for the upcoming Edwardsville Art Fair.
The Art Fair will take place Sept. 23-25 in City Park. If the weather is bad, it will be housed inside the Edwardsville High School gymnasium.

Last year, there were 68 artists, including several high schools, for the event. Iowa, Wisconsin, Kentucky, Michigan, Missouri and Illinois were all represented. There were 32 hotel room nights generated, according to the application.
Those numbers are expected to rise this year.

“They are expecting over 100 artists and more overnight stays,” Alderman Art Risavy said. “Based on those numbers and the expectations, we thought the additional amount was in line.”
The Edwardsville Art Fair was approved for a $5,000 tourism fund request last year.