Republic Windows Was Daley's Darling

A development success gone bad

The standoff at the Republic Windows and Doors factory may have become, in the words of AP, "a symbol of mounting anger" and a national "rallying point" for the "grim economy," but Republic itself is also a local symbol, for better and worse, of Mayor Daley's economic development philosophy, including a reliance on tax increment financing and a change of heart about creating special industrial zones.

In 1996, the mayor agreed to help subsidize Republic's expansion by using TIF funds.

"It was intended to help the company develop its Goose Island facility," reportsTIF guruBen Joravsky, of the Reader.

Back then, the company was known as Republic Aluminum. A Sun-Times story from 1996 noted that Republic had operated in Chicago for 31 years, and had "outgrown its facilities, which include a 125,000-square-foot site it owns at 1725 W. Diversey."

Republic was threatening to move to the suburbs when the mayor stepped in, and he would go on to use the Republic TIF as an example of how TIFs work as a development tool, even though critics such as Joravsky point out that TIFs hoard money that would otherwise go to schools and other taxing entities.

Soon after the deal with Republic was struck, the mayor, who had once opposed special efforts to keep factories in the city, was touting the North River Industrial Corridor - which included the FedEx distribution site there - as a national model. The Sun-Times described it as "one of the city's most intensive job-creation efforts."

In 1998, Republic opened its new factory and headquarters on Goose Island to rave reviews.

"The building is a head-turner," wrote Lee Bey, who was then the Sun-Times architecture critic.

But Republic had to go back to the city for a larger subsidy than Daley had originally intended.

"The project's cost ballooned more than 80 percent, to $37 million, according to a 2000 amendment to a public subsidy agreement with the Daley administration," the Tribune reported. "The city boosted its subsidy for the project nearly 50 percent, to $9.6 million, because of larger-than- expected public infrastructure costs and an increase in the building's size."Before the project, Republic was virtually debt free. But the firm is now burdened by about $30 million in loans, sources said. Bank One holds three notes totaling $20 million and a revolving loan with a $12 million maximum, mortgage documents show." Republic disputed those figures, but clearly the company's financial picture had changed.

In 2004, Republic considered selling its state-of-the-art building and leasing back the space.

By 2006, Republic was going in reverse. The Tribune reported in 2006 that the Wm. Wrigley Jr. Co. had "purchased a 348,400-square-foot facility at 930 W. Evergreen Ave. from Republic Windows and Doors Inc. in a deal valued at $31 million," and that Republic was looking to move to a smaller, more economical facility."

The Trib noted that "Wrigley's purchase price for the Republic deal is less than the building's $37 million construction cost in 1997, when it was a key project in the industrial redevelopment of Goose Island, a 146-acre island in the Chicago River between North and Chicago Avenues that was designated a planned manufacturing district by the Daley administration in 1990 to prevent residential development."

Ironically, sources told the Trib that, in looking for a smaller facility, "Republic initially wanted to stay in Chicago but expanded its search to the suburbs after the Department of Planning and Development turned down a company request for a $3 million tax- increment financing grant."

Apparently once was enough.

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