Unico Expanding Its Caledonia Plant, Incentives Include Village Tax Rebate

Unico is set to expand its workforce and the Caledonia Business Park facility located at 3725 Nicholson Road, according to news reports.

In a unanimous vote, the Village Board and the Community Development Authority approved a development agreement with Unico at a Village Board meeting Monday night.

Village President Ron Coutts said the jobs announcement is a positive for the Village and Racine County.

"The Village is pleased that Regal has chosen to expand in the Caledonia Business Park, creating valuable jobs and expanding the tax base of our community," Coutts said. "The company's investment reinforces the Village's decision to create the Tax Increment District to support business growth in the Village."

Regal Beloit, which owns Unico, currently employs 196 people at the Caledonia plant. An additional 175 jobs over the next three years are expected to come on line with the 52,000-square-foot addition, according to the Biz Times. The company develops and manufactures drive systems.

Officials expect the jobs to be product and system assembly, and engineering positions, which are expected to have an average wage of about $17 per hour.

The expansion follows increased demand for Unico's products, which are used in the oil and gas industry and automotive markets, the Biz Times reports. 

Unico President Tom Beck was quoted in the story as saying, "This building project is the latest installment in a series of expansions of the Unico business since its beginning 44 years ago in a store front in the inner city of Racine. ... The growth of the Unico business is a result of the creativity, motivation and effectiveness of the Unico employees. This building expansion is proof that people in this community can successfully compete with anyone in the world."

Laura Million, business resource manager of the Racine County Economic Development Corporation, said the building addition is estimated at $5 million. Once complete, the Village anticipates an increase of $88,000 per year in tax revenue.

"Unico is looking for architects now," Million said.

The tax incentives to make the project happen included a:

• $695,000 in tax credits from the Wisconsin Economic Development Corporation, which will be distributed annually over a five-year time frame as the full-time positions are created.
• $260,000 forgivable loan from the Racine County Revolving Loan Fund.
• $44,000 for 10 years in financing assistance from the Village of Caledonia, which will come in the form of a "rebate" on Unico's tax bill.

The company had considered locations in Mexico and Missouri.

A Tax Incremental Finance (TIF) District is a development tool municipalities can use to attract business. A TIF takes property taxes from businesses in the district to pay back the loan used to establish the district. Funds are also used to establish and maintain infrastructure like roads, water and sewer inside the TIF.

Village Administrator, Tom Lebak, said the project is "as close as you can get to pay as you go."

The Joint Board of Review, a board comprised of representatives from the other taxing entities that would be impacted by the TIF, has been informed of the project and approved the plan, Lebak said.

"We are deferring the increment created from this project from other taxing entities, but it goes back to the 'but for' test," Lebak said. "But for the TIF this wouldn’t have happened. The other taxing entities have been cooperative and sometime down the road they’ll see a boost in their tax base."