Second engine plant gets tax break
Dundee Village Council approved a 50% tax abatement for the second Global Engine Manufacturing Alliance (GEMA) plant at its Tuesday, April 20 meeting.

“This will allow us to proceed with developing the second engine plant on the existing site,” said Al Pope of DaimlerChrysler, one of the three partners in the alliance. The other two companies are Mitsubishi and Hyundai.

“Our investment is in the billion-dollar range between the two facilities,” added Mr. Pope. “Seven states competed for the site of this engine plant.”

Property taxes paid by the company are being captured by the village in an LDFA (Limited District Finance Authority) to pay for infrastructure improvements. The tax abatement will cover about a 14-year period.

Village Manager Patrick Burtch said $3.2 million in LDFA bonds have just been sold. $1.2 million will pay for onsite electrical work for GEMA, and $2 million for an industrial wastewater pre-treatment facility.

Industrial wastewater pre-treatment facility
Instead of having GEMA construct its own industrial wastewater pre-treatment facility, the Village of Dundee decided to build the facility itself, and see to its operation. This will allow the village to attract other industries by offering to let them use the facility. The operation and maintenance will be paid for by user fees. The facility itself was to be built with LDFA funds.

Village Council members heard an extensive presentation from engineers from Arcadis FPS at the April 20 meeting. The firm was hired to design and build the new industrial pre-treatment facility for the village.

However, total cost of the project increased to $2.5 million, and the village had to request another $500,000 from the state. The state is using HUD (federal) funds, and so the project has to meet federal prevailing wage standards. Now the project has to be bid out for construction.

Arcadis is charging the village “not to exceed $50,000” (expected actually to be about $40,000) for a preliminary design for the plant. This money was used to research what type of facility and process to use to treat the heavy wastewater generated by the engine plant.

In addition, Arcadis originally told Council the cost for the final design phase would be $148,000 but on Thursday, April 22, Mr. Burtch said the village negotiated this fee down to $145,000.
Mr. Burtch said the total engineering fees of about $185,000 are within the 8-10% of the total project cost, which is reasonable.

At the meeting, Mr. Burtch expressed frustration that engineers were unable to give an estimate of what they thought the project could cost to construct. By Thursday, he said the construction is likely to cost about $1.8 million. In addition, there are site work and utilities, as well as bond sales in expenditures.

The initial plan was to have Arcadis operate the plant for the village. However, the village now may seek bids from other companies to do this work. So while Arcadis may end up operating it for the first year, another company may take over later, said Mr. Burtch.

Because treating industrial wastewater is very complicated and must meet rigorous Department of Environmental Quality standards, it is expected to be less expensive to have an outside firm contract with the village to operate the plant.

“The reason we pre-treat industrial wastewater before we let that into our regular wastewater treatment plant is because some of the industrial wastewater characteristics would destroy our biological treatment system,” said Mr. Burtch.

The industrial pre-treatment plant will be designed to treat about 100,000 gallons of industrial wastewater per day. It will be located on the north side of Ty Circle (soon to be Alliance Drive), across from existing GEMA offices.

Arcadis engineers said they would design the plant for two different bidding processes. One proposal request will be for the construction of the actual building. The other proposal request will be for the equipment and installation inside the building.