ROCKFORD — Rocknel Fastener is planning a $2.1 million addition to its operations at 5309 11th St., but first needs the city to extend Logistics Parkway so trucks can reach its warehouse.
The City Council Planning & Development Committee Monday approved a proposed development agreement with the manufacturer that would do just that.
Under the agreement, the city would tap the Rockford Global Trade Park Tax Increment Financing District fund for $183,000 to make a temporary extension of the road Logistics Parkway, which would be situated between Illinois 251 on the east and Chicago Rockford International Airport on the west. A TIF district is a financial tool that municipalities use to generate revenue for economic development projects. As development within the special zone blooms, the city captures the increased property tax revenue, or tax increment, and spends it on redevelopment projects.
The city plans to apply to the Illinois Department of Transportation for a grant that would pay for a permanent road expansion, which is expected to cost around $3.8 million.
Mark Williams, city economic development manager, said the addition to the Rocknel building would generate about $229,000 in additional taxes over 10 years, which is when the TIF expires. The additional tax revenue from the Rocknel addition would cover the city's investment into the temporary road, Williams said.
Ed Vaughn, director of operations at Rocknel Fastener, said the company employs 188 people and will add at least 10 employees as part of the addition. Vaughn said the company wants to begin construction by the end of March.
Rocknel was formed in 1989 as a joint venture between Elco Industries Inc. and Nagoya Screw Manufacturing Co. Ltd. Elco wanted to do business with Japanese firms, which in the late 1980s were setting up car factories here. Nagoya helped it break into the market. Since 1998, Rocknel has been a wholly-owned subsidiary of Meira, Inc., a Japanese company that focuses on automotive and aerospace fasteners.
"It's mainly Japanese automotive plants," Vaughn said, of Rocknel's customers. "There is a lot of growth there and it drives our business."
Vaughn said that while building construction will cost $2.1 million, the company's total investment will be $7.7 million. Rocknel will use some of the extra space for a new metal plating line, which will require new equipment.
Todd Cagnoni, the city's director of community and economic development, said Rocknel says it is planning to expand again within five years.
"They've got two additions that they're proposing here," he said.
The development agreement is expected to be on the City Council's agenda on Monday.