Chicago, IL - Mayor Richard M. Daley

Wheatland Tube Company

The Wheatland Tube Company manufacturing mill which operates at 2300 West 47^th Street is a Chicago - and a CDBG - success story.

When the CDBG program was created 25 years ago, South Western Avenue between 39^th Street and 55^th Street was a booming industrial strip where thousands of workers were employed. Since then, however, many of the industries and the jobs they offered have left the area. Jones and Laughlin Steel Corporation is an example: When it moved out, its warehouse property was dormant for many years. In the early 1980s, another heavy industry moved onto the property but failed in a relatively short time. A few years later, an auto and truck parts company took over the property but was bankrupt in about a year. At this point, the blighted and contaminated property - described by the director of the Back of the Yards Neighborhood Council as the worst he had ever seen - appeared doomed. What was once a booming area was now occupied by a furniture outlet, a flea market and a children's play fair.

In 1996, the Wheatland Tube Company wanted to expand and was planning to move its tubular products manufacturing operation from Chicago to Little Rock where it had another plant in operation. Through contacts with the Neighborhood Council, Wheatland determined that the property on West 47^th Street - close to its plant on South Western Avenue and located in an Empowerment Zone and State Enterprise Zone - had the crane capacity and size needed for their expanded operation, but also determined that the cost of the environmental and general clean-up of the property, coupled with the cost of the new machinery and equipment they would have to purchase, made the move there nearly impossible.

At this point, the City was able to provide the only incentive that would make the Wheatland deal work: A $12 million CD Float Loan, secured by a letter of credit from Northern Trust Bank, to cover site acquisition and preparation, construction of a new mill, renovation of an existing 360,000-square-foot warehouse, purchase of machinery and equipment, and soft costs and contingencies. By capturing the Wheatland mill, which became operational in 1997, the City retained about 140 mill employees and added about 25 new ones. The Neighborhood Council estimates that the deal also helped protect an estimated 900 service jobs supported by Wheatland.

Contact: Meredith O'Connor, Assistant Commissioner, Department of Planning and Development, (312) 744-0109

The United States Conference of Mayors

J. Thomas Cochran, Executive Director
1620 Eye Street, NW, Washington, DC 20006
Telephone (202) 293-7330, FAX (202) 293-2352

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