Chicago Trying to Land United with Incentives

The city's offer includes $4.4 million in tax-increment financing if the airline relocates downtown, according to a source familiar with details of the plan.


The City of Chicago is offering United Airlines a tax-incentive package in a bid to convince the carrier to move its headquarters downtown.

The city's offer includes $4.4 million in tax-increment financing if the airline relocates downtown, according to a source familiar with details of the plan.

The deal would be contingent on United remaining in the city for at least a decade and employing an agreed-upon number of workers.

City economic development authorities and an airline spokesman declined to discuss details of the offer Monday.

"We will be discussing our options with city officials and not negotiating in the media," said Brandon Borrman, spokesman for UAL Corp., United's parent company.

The city's offer is not of the same magnitude as the various incentives that lured Boeing Corp. from Seattle in 2001. The package that helped woo the aircraft manufacturer included $14 million from the state over 20 years.

Other incentives provided to Boeing included $3 million in city grants and $19 million in property tax abatements.

United announced in May that it may move from its longtime home in Elk Grove Township, near O'Hare International Airport. In addition to downtown, the carrier said it also is considering San Francisco and Denver, cities where United has major hubs. Top officers from the airline were in California last month to meet with authorities there.

United also has said it could opt to keep its corporate offices in Elk Grove Township. The airline reportedly is looking for 150,000 to 160,000 square feet of office space.

Chicago economic development officials have been working with United, said city Planning Department spokeswoman Connie Buscemi.

"We're trying to find a place that meets their needs," she said.

Any move would involve about 400 top managers and support staff.

If the headquarters moves from its existing site on East Algonquin Road, it likely would free up room for United to consolidate other operations on its campus there. In addition to office space it rents in several suburbs, including Schaumburg and Itasca, United has a call center in Chicago.

The vast majority of United's 16,000 Chicago-area workers are at O'Hare International Airport, the carrier's largest hub. About 3,600 work at the offices in Elk Grove Township.

United has long been known as Chicago's "hometown airline." The push to keep the carrier's headquarters in Illinois comes just months after United emerged from a 38-month bankruptcy. The carrier has not recorded an annual profit since 2000.

Sen. Richard Durbin (D-Ill.) recently wrote United Chief Executive Glenn Tilton urging him to keep the airline's operations based in Illinois.

"Moving United's headquarters out of our state would not only hurt over 16,000 United employees in the Chicago area, it would be a major setback for the airline," Durbin said in a statement last month released by his office.

"United is as dependent on the contributions of their highly trained professionals and partnership with O'Hare as the people of Chicago are on its business."



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