Agreement will enable Illinois State Police to reduce costs, increase efficiency as it consolidates many operations
SPRINGFIELD – Governor Rod R. Blagojevich today announced that the state has reached a landmark agreement with American General Life Insurance Co. (AIG American General), a member company of American International Group, Inc. (AIG), to acquire its current office buildings and to retain the company’s operations and at least 400 jobs in Springfield. In the coming months, AIG will invest $25 million as it constructs a new facility that will serve as a life insurance processing and service center.
Purchasing AIG’s current facilities – commonly known as the Franklin Life complex – will allow state property management experts to consolidate many Illinois State Police functions being managed throughout the capital city, and transition additional agencies into the remaining space as an important initiative that will increase efficiency and reduce administrative costs. This acquisition will increase the state’s portfolio of owned space by nearly 375,000 square feet and up to 1,500 employees will be located at the facility.
“This is a unique opportunity for the state to acquire a landmark building, while being able to retain a company that has strong ties to Springfield, the region and the state,” Gov. Blagojevich said. “AIG is a prime example of a successful company that we can keep in Illinois by taking creative steps to boost its competitiveness, increase its productivity and keep at least 400 jobs in Central Illinois.”
As part of the agreement to purchase the Complex, AIG American General agreed to maintain a
presence in Springfield for its life insurance business. The company will construct a 115,000 square-foot building for its use at a site on the southwest side of Springfield. AIG considered consolidating at locations out of state.
“We are pleased that our negotiations have been successful and look forward to welcoming the Illinois State Police to their new headquarters,” said Rick Hollar, Chairman and CEO of AIG American General’s Life Profit Center. “Construction of our new Operations Center will commence in a matter of weeks, thereby starting the next chapter of our long and distinguished history within the Springfield community.”
"Keeping AIG’s operations in Springfield has been a priority of my administration, and that is why we’ve worked closely with the state to help make that possible. The Blagojevich administration has shown great coordination across multiple state agencies to put together a comprehensive package that is beneficial to both the city and the state. This company has a long, storied history in Springfield, and I’m pleased that they will remain part of our business community," said Springfield Mayor Tim Davlin. "I am also pleased the State Police will be occupying this historic building, rather than having it deteriorate and become a blight in our community. Their presence in that neighborhood will be welcome. And, consolidating their operation under one roof will undoubtedly improve efficiencies of service to the people of Illinois."
Acquiring the Franklin Life Complex:
After the state and AIG American General complete the real estate transaction in March, Illinois State Police (ISP) employees will begin to transition to the Complex from up to eight separate offices that are currently located throughout Springfield, which is expected to increase the efficiency of the agency and eliminate ongoing leasing costs.
Under terms of the agreement, the state will pay $13.25 million for the facilities; AIG American General will pay nearly $300,000 in upgrades to prepare the facility for state occupancy. The purchase will take place entirely in FY 2007 using FY 2007 appropriations.
“Acquiring these facilities is not only a historic opportunity, but also offers incredible potential for future cost savings. This is an investment that will consolidate several disparate offices from throughout Springfield and transition them to state-owned space. One of the greatest opportunities lies with the State Police, which can gain efficiencies by consolidating its operations to this complex and reduce its need for leased space,” said Central Management Services Director Paul Campbell.
For about one year following the closing of the transaction – while AIG American General’s new facilities are being built – AIG American General employees will share the building with the State Police. Steps are being taken to ensure that both AIG American General and State Police spaces are secure. The Illinois Department of Central Management Services (CMS) continues to work with ISP to review existing facilities to determine what functions can and should be moved; CMS is also reviewing additional agencies that could also move into the facility.
After ISP’s operations are consolidated, the agency will house approximately 700 employees at the complex and occupy approximately 70 percent of the space. Other agencies will also move into the facility.
“The Illinois State Police is grateful to Gov. Blagojevich and his administration for their support and ongoing efforts on behalf of this agency,” said ISP Director Larry Trent. “The consolidation of several ISP offices into the AIG Building will allow the ISP to better accomplish its primary goal of providing quality law enforcement services in the protection of our citizens.”
In addition to its size and ideal location near downtown Springfield, the building offered additional amenities that made it attractive to state property management experts, including significant IT infrastructure that will require only minimal state investment and abundant accommodations for storage and parking.
Investing in Companies that are Investing in Illinois:
The state’s $2.8 million business investment package with AIG comes as a part of Gov. Blagojevich’s Opportunity Returns regional economic development strategy to create better jobs and spur even more growth in Central Illinois and throughout the state. The company intends to invest $25 million as it constructs its new facility.
The Illinois Department of Commerce and Economic Opportunity (DCEO) is administering the business investment package. It includes Economic Development for a Growing Economy (EDGE) corporate income tax credits over the next ten years based on job retention; Employer Training Investment Program (ETIP) job training funds that will help the company enhance the skills of its workforce in areas including new computer and office software; and additional financial benefits, such as sales tax exemptions and tax credits for job creation and retention, resulting from the company’s location within an Enterprise Zone.
“Gov. Blagojevich and I are excited to be working with AIG American General to enhance its presence and keep 400 jobs right here in Springfield. This support is helping the company maintain its leading status in the marketplace and keeping our regional economy moving forward,” DCEO Director Jack Lavin said
AIG American General is the marketing name for the companies comprising the Domestic Life Operations of American International Group, Inc. (AIG), including American General Life Insurance Company. AIG is the leading international insurance organization with operations in more than 130 countries and jurisdictions.