HQ decision: MillerCoors incentives top $23M

The Business Journal of Milwaukee - by David Schuyler

MillerCoors LLC will receive financial incentives and tax breaks that could be worth more than $23 million from the state of Illinois and the city of Chicago in return for placing their headquarters in Chicago.

The greatest share of that package by far comes in the form of Economic Development for a Growing Economy (EDGE) corporate income tax credits valued at approximately $17.5 million over 15 years, according to the Illinois agency responsible for administering the state package.

The value of the tax credits is approximate because they are based on levels of job creation, said Ashley Cross, a spokeswoman for the Illinois Department of Commerce and Economic Opportunity.

MillerCoors expects to have 300 to 400 employees at its downtown Chicago headquarters when the office is fully established. The jobs will be transferred from Miller Brewing Co.'s existing corporate headquarters in Milwaukee and from Coors Brewing Co.'s headquarters in Golden, Colo. The two brewers -- the nation's second and third-largest beer producers -- merged to form MillerCoors July 1.

The state of Illinois is also offering a business development grant, from the state's Large Business Development Program, of $500,000 to cover some upfront capital costs, Cross said. A work force training grant of $325,000, through the state's Employer Training Investment Program, will also be offered over a period of two years.

The city of Chicago is offering aid in the form of tax incremental financing, or TIF district. The value of the TIF will depend on where MillerCoors decides to locate -- a site decision is expected to occur within the next few months. The assistance could be worth anywhere from $2.5 million to $5 million, according to a report from the Chicago Tribune citing the executive director of World Business Chicago, a nonprofit economic development organization. A spokeswoman for the group decline to verify those figures Wednesday, saying that the value will depend on where the company locates. Nonetheless, the TIF will require the approval of the Chicago City Council.

While the incentives did play a role in attracting MillerCoors to Chicago, the decision was still largely based on the city being a center for the marketing industry, a hub of international travel and an area with a large pool of talent, said Julian Green, MillerCoors spokesman.

Miller has a marketing office in Chicago with about 25 employees, and several of MillerCoors' key ad agencies are based in, or have major offices in, the city.

"Both (Miller and Coors) are marketing companies," Green said. "The desire to win the beer battle requires marketing."

Chicago's connections to international destinations -- MillerCoors is a venture of SABMiller in London and Molson Coors Brewing Co., which as a major office in Montreal, was also a major factor.

"We're a global beer company that's doing business all over the world," said Green.