Rolling Meadows-based insurance giant Arthur J. Gallagher & Co. is planning to expand on its Golf Road campus with a new four-story building that would house 700 new employees. The move hinges on state and local tax incentives that may just be enough for the company to choose to build in the suburbs rather than lease cheaper space on a site near Houston.
The decision of the country's fourth-largest commercial insurance brokerage to expand comes as the company looks to grow its core business services, officials say.
It comes nearly two years after Gallagher returned to its one-time Rolling Meadows corporate campus following 26 years at an office building in Itasca. About 1,500 employees work at the global headquarters -- an 11-story, 315,000-square-foot building that underwent some $100 million in renovations from 2015 to 2017. Gallagher also owns a separate two-story building for its IT and mail departments.
The company has proposed construction of a new four-story office building on a 352,000-square-foot parcel near a parking garage on the campus. The estimated $45.6 million development would include state-of-the-art conference areas, "huddle" rooms, phone rooms and workstations.
With the additional space, Gallagher expects to create 700 full-time permanent positions over the next five to seven years.
"They've gotten to the point where they're at the end of the seams and they really are filled at that building," said Rolling Meadows City Manager Barry Krumstok.
While the company has eyed the Rolling Meadows site for its expansion, company brass have also evaluated potential sites near Houston, where the business has 460 employees.
Business assistance offered by Cook County and the state of Illinois would be "a major component" in the potential decision to stay in Rolling Meadows, company officials wrote in an application for a county tax incentive.
An analysis by Gallagher provided to the county estimates it would cost $763 million to build and staff the new building and pay property taxes, compared to $656 million for leasing, labor and taxes in Houston.
That's what led the company to apply for a Cook County Class 7B tax incentive, which would allow the property to be assessed at 10 percent of market value for 10 years, 15 percent in the 11th year and 20 percent in the 12th year.
Properties are normally assessed at 25 percent.
While the county board makes the final decision, Gallagher got Rolling Meadows' city council to endorse its application -- a necessary component to gaining approval.
"I think Gallagher coming to our town, period, was great," said Alderman John D'Astice, who represents Ward 6 where the company is located. "And now they want to create a corporate campus here. They want to construct a new building which is going to once again give more credibility to Rolling Meadows."
The Rolling Meadows Chamber of Commerce also backed the proposal, with executive director Linda Ballantine saying there were "700 valid reasons" for aldermen to support it.
Rob Banger Jr., the lone alderman to vote against the tax break, said he found it more objectionable than $30 million in tax increment financing district funds the company received from the city for its last redevelopment project.
"This is more of the same," Banger said.
The company also is seeking assistance from the Illinois Department of Commerce and Economic Opportunity.
If given final approvals, construction is estimated to begin in 2019 and be complete by the end of 2021.