HAMMOND — The City Council on Monday night followed through on last year’s promise to provide a $4 million tax incentive for the hard-fought Lear Corp. project.
The auto parts supplier — which makes seats for Ford Explorer at the nearby Chicago Assembly Plant in Hegewisch — is in the midst of a $30 million-plus expansion of 240,000 square feet on 30 acres just south of the South Shore Line train station in East Chicago.
Other cities across the Chicago area in Indiana and Illinois vied for the facility, and the city leaders, at one time, thought they had lost Lear Corp.
“This is a huge win for us,” Mayor Thomas McDermott Jr. said during Monday’s night caucus meeting.
A development agreement struck between the company and Hammond about a year ago required the city’s redevelopment commission to pay the $4 million incentive upon the issuance of a certificate of occupancy for the plant.
The bond sale approved Monday night will be paid back over a 15-year-period through tax increment financing revenues in the Hammond Central Allocation Area, according to city officials.
Under the terms of the contract, the bond interest rate cannot exceed 7 percent, but City Controller Heather Garay said it’s likely the rate will come in closer to 4.5 percent.
The Council also approved an amendment to the Lear Corp. agreement Monday night. The agreement initially required Lear use the money towards construction costs, but instead, the company now wants to use to the money for new employee training.
The move to a larger space in Hammond allows the company to consolidate its Hammond and Portage plants, meaning the 575 workers in Hammond and the 300 workers in Portage will be under one roof in the new facility. They're all represented by United Auto Workers Local 2335.
Buyer interest in 165th St. plant
Erica Brown, with Lear Corp., told council members a potential sale is in the works for the old 165th Street facility, where Lear had operated in Hammond since 1994.
When it outgrew its 100,000-square-foot facility on 165th Street because of strong demand for the Explorer. Lear moved about 300 workers 20 miles east to a business park in Portage in 2015.
Lear Corp. is in talks with a potential buyer, she said.
Mayor Thomas J. McDermott said he expects the building to house light manufacturing a few years from now.
“Once Lear moves into the new building, I think there’s a solid lead on the old building,” McDermott said.