GARY — An Illinois steel company could receive a $1.4 million net incentive package from the city to relocate from its Bedford Park facility to Fifth Avenue under a proposal being floated by the City Council next week.
Alliance Steel Corp.’s planned move to a recently vacated facility at 2700 E. Fifth Ave. represents a $19.7 million investment, according to city documents. The company expects to be operational at the the 236,000-square-foot space by January 2020.
Alliance, a flat roll steel service center, expects to bring over 100 existing full-time positions from its Illinois facility and expand its workforce by 20 to 35 positions over the next two years.
Andy Gross, president for Alliance, said the move means Alliance will be "ideally located much closer to major steel mills, which will allows us to reduce inbound freight as well as service our customer needs much better. All suppliers and customers will be in a much better proximity being located in Gary."
The company will be repurposing a building vacated in January by ATCO-Gary Metal Technologies after the owner abruptly announced plans to shutter its Gary plant and lay off scores of workers.
“This is the perfect location for Alliance,” Gary council President Ron Brewer said Wednesday.
Brewer said he's “all for” the incentive package being offered to Alliance, which includes a $1.2 million tax abatement, $200,000 TIF infrastructure subsidy and $100,000 moving subsidy, documents show. Alliance must pay a $90,000 fee for these incentives.
After getting $1.97 million in income tax, the city stands to make a net gain of $554,121, according to figures provided by Joe Van Dyk, executive director for the city’s Redevelopment Commission, to city officials on Nov. 7.
Gary Mayor Karen Freeman-Wilson said the company's move is "a great prospect for Gary" that is consistent with efforts to increase the city’s assessed valuation and add well-paying jobs.
“Alliance expects that their in-house trucking company would spend approximately $1.2 million annually on fuel in Gary, and Alliance would continue to purchase over $80 million of finished steel annually from Indiana-based mills, namely USS Gary Works,” Van Dyk wrote.
If approved by council, the 24-acre area where Alliance will relocate will be designated as the Alliance Economic Revitalization Area to authorize the tax abatements.
Alliance is expected to make reasonable efforts to contract with Gary-based business and suppliers for improvement made to its facility and prioritize Gary residents for hire by partnering with the city's workforce development liaison, Brewer said. Jobs there average $31 per hour.
"A lot of times, Gary residents are left out of the process. This time, it's different," Brewer said.
In August 2017, the company submitted a $925,000 bid to the city’s Redevelopment Commission for 25 acres at 6200 Industrial Highway, land previously owned by Majestic Star Casino.
That proposal had called for construction of a new 250,000-square-foot production facility, new production lines and accompanying offices.
"The change in location was due to some timing issues that occurred on the original site in that there was few infrastructure items that could not be performed as quickly as this move required. We were lucky enough to have found a soon to be vacant, building which was formerly operating a sheet metal operation that was conducive to our needs," Gross said.
Brewer said Alliance was smart to jump at the chance to repurpose an already existing facility.
The Gary City Council next meets at 6 p.m. Dec. 4 at the Genesis Center.