The Pound Bakery (top left) shows the Pedigree Ovens expansion site to its left, at Harvard’s Arrowhead Industrial Park, prior to the start of construction. (Photo courtesy of Harvard Economic Development Corporation)

The state budget stalemate has forced the city of Harvard to secure a $1.3 million loan to compensate grant funding to the Pedigree Ovens expansion project, which began last August.

The funding has not been released at the state level, and the amount will complete the city’s portion toward the 210,000-square foot structure in the Arrowhead Industrial Park, located at 495 Comanche Circle.

The actual grant amount is $980,000. The additional funds would be earmarked for infrastructure improvements such as a water main and a linking route to Diggins and Lawrence roads. The industrial park was designated as a tax increment financing district, effectively freezing the equalized assessed valuation of the property boundaries, for up to a 23-year period. The tax payments, above the staid rate, are placed in a fund for site improvements. The TIF funds will be used to repay the loan.

“The state hasn’t paid the grant amount, and contractors are working at the expansion site, so this is a bridge loan that covers the gap until payment,” said Harvard City Manager David Nelson. “The TIF portion will be expended for the balance of the repayment period, which balloons in five years. The loan was completed through the Harvard Savings Bank, and all locally committed.”

Pedigree Ovens, and The Pound Bakery, is a producer of pet treats, along with other pet foods, and a major player in the local economy. The factory addition is expected to add approximately 100 jobs for the community, essentially doubling its current workforce. “The construction work is expected to be completed by the end of July, with a tentative August factory opening date,” said Nelson.

Nelson also said the state was to provide $981,000 of the grant money, more than one year ago, when the agreement with the manufacturer was tendered. The importance to the community necessitated the bank loan as a stop-gap measure. Another economic factor is that the industrial park is also situated within the Harvard-Woodstock-McHenry County Enterprise Zone, established in December 2014.

The zone encompasses Harvard, the main commercial corridors at the intersection of routes 47 and 14 in Woodstock, as well as nearby unimproved properties under county jurisdiction over a 7.72-square-mile area. The three governmental agencies partnered together to take a proactive stance in addressing economic downturns suffered in recent years.

The enterprise zone concept was initiated by the state of Illinois in the 1980s, as a tool for communities that have suffered economic setbacks through the loss of commercial entities. Inducements to businesses include reduced permit fees, rebates on tax liabilities for equipment purchases, real estate tax abatements for new plant construction or expansion, relaxed regulations designed to promote commercial growth. In addition, special taxing districts and different designations help promote tax incentives.

“The industrial park is inside the enterprise zone,” Nelson said. “There’s been interest, in and around town, although there are time-consuming processes like real estate property transactions that slow efforts to take quick advantage of the zone’s amenities.”

Pedigree Ovens was prepared to move its operation to the state of Wisconsin, which was offering tax incentives and other concessions. The benefits of the enterprise zone, along with cooperation between the state of Illinois, McHenry County, and the city of Harvard helped retain the facilitate in its present location, and initiate the expansion to accommodate more packaging floor-space, and shipping potential.

“The zone doesn’t really have the impact, it is designed to accomplish, because the state has to keep its commitments,” said Charlie Eldredge, the zone’s administrator. “However sure that the money is there, it has to be released. Pedigree Ovens is an appropriate example since it will add 100 jobs to the area workforce, once they move into the new building. The state still owes the money, and they are $15 billion, or so, behind in overdue bills.”

Nelson was unsure when the funds would be released, although TIF funding has accumulated nearly $2.5 million, to date.

“The factory expansion is moving forward to the projected August opening date, and the city keeps it commitments,” said Nelson.

–Harvard fulfills Pedigree Ovens grant through loan–