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Town OKs utility deal with Peer Foods

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CUMBERLAND — Peer Foods moved a step closer to finalizing its plans to move to western Hancock County when Cumberland Town Council approved a utility agreement with the meat production company this week.

Earlier this month, Peer Foods, a 146-year-old company with headquarters in Chicago, asked Hancock County Council for a tax abatement. Wednesday, the town council agreed to waive some fees for Peer to hook on to utilities.

The company plans to bring 70 manufacturing jobs to the former Emge cold-storage building at 5563 W. U.S. 40.

Peer Foods hopes to be operating at its Hancock County facility this summer, and will be cooking and smoking Aidells sausage and hot dog products.

Aidells, found in stores like Kroger and Marsh, uses chicken, turkey and pork for gourmet sausages, with flavors ranging from artichoke and garlic to mango.

Because the company is regulated by the United States Department of Agriculture, municipal utilities are required at the site.

Peer plans to spend roughly $185,000 to install new utility lines to hook up to Cumberland sewer and Gem water; both utilities are owned by the town of Cumberland.

Fees to hook up to the town’s infrastructure, however, totaled $336,800. Wednesday, the town council agreed to give peer a $120,550 break on that cost.

Steve Yagelski, utility director for the town, said the incentive made sense for the community because the project will bring jobs to the area and the additional infrastructure could spur more economic growth.

The two properties immediately to the west of the Peer Foods site, for example, are for sale. With municipal water and sewer available, Yagelski said the properties could be more marketable.

“It benefits us because we get the infrastructure and we didn’t pay for it,” Yagelski said.

And since Peer will be using about 20,000 gallons of Gem water a day, Yagelski said that could help lessen a possible rate hike for Gem customers.

Last year, Gem customers were told they could see a 60 percent water rate increase. The council hasn’t acted on it yet; Yagelski was hired to find efficiencies among all of the town’s utilities in an effort to lower the increase.

Yagelski said he will meet with the town’s financial consultant to see whether the increased water usage from Peer would mean less of a water rate increase for the rest of Gem’s customers.

“This represents a large contribution who will help offset some of the ongoing costs,” Yagelski said. “I know it’s going to benefit the utility, and I hope it will translate to the individual homeowner.”

Council members were all smiles at the meeting, thanking Yagelski and company representatives. Bill Jones, facility director for Peer, said the company first started considering Hancock County last March.

Council members were especially pleased to hear that Peer would be making Aidells, a product they are familiar with.

“It’s great sausage – I bought it yesterday,” said Nicole Bell.

While Peer Foods awaits final word on a tax abatement from the county council – a public hearing will be held next month – Jones said he’s excited the project is moving forward.

“We’re looking forward to working with Cumberland and Hancock County,” he said.

Tax abatements are offered by county officials as a way to attract businesses to the community. If the company promises to invest in the community and bring jobs, property taxes are phased in over a period of time.

Peer plans to invest $2.7 million in new manufacturing equipment at the site, like packaging machines and cooking units. A three-year abatement on equipment would mean roughly $23,000 in savings for Peer.

The real estate investment at the site is at least $1 million. A 10-year tax abatement on that would mean $122,000 in savings.

The annual salaries at Peer will be $1.5 million; the average salary will be about $11 per hour.

The well-known stone pig in front of the building will remain in place, Jones promises, and it will still wear seasonal outfits. In fact, motorists can expect to see a St. Patrick’s Day outfit soon, he said.

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