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Daley backs city aid to mega-market

Posted July 15, 2007 11:00 pm

Mike Ramsey

Mayor Richard Daley on Monday endorsed the idea of offering public assistance to the city's pair of newly merged financial markets, the Chicago Mercantile Exchange and the Chicago Board of Trade.

"Everyone here has a cousin, relatives or friends or neighbors that work at the Board of Trade or Merc or some related industry," Daley said at a Chicago appearance. "That's one of the largest growing industries here in the city of Chicago. That could have been moved to New York."

"The futures industry was born here, right here in the city of Chicago," the mayor added, "and we have kept it here by that merger."

His remarks followed a story from Crain's Chicago Business that said both Daley's office and a state economic development official offered potential incentives to the two markets in separate July 6 letters that predated the exchanges' merger. CBOT had entertained a competing acquisition offer from an Atlanta financial market before its shareholders OK'd a later offer from the Merc worth nearly $12 billion.

Daley would not talk specifics, but the Crain's article suggested the city may put up millions in tax-increment financing as the Merc, on Wacker Drive, relocates to CBOT's Jackson Boulevard headquarters. TIF money, from earmarked property tax growth, is typically used for urban redevelopments.

The consolidation won't be without pain: Hundreds of layoffs are expected. The new entity - the world's largest exchange - will be called CME Group.

Before the merger deal, Illinois Department of Commerce and Economic Opportunity Director Jack Lavin told market officials the exchanges may be in line for potential state tax credits, agency spokesman Andrew Ross said. They took a pass, but Ross said partial reimbursement for job training may still be available to them.

"The fiscal impact of having this merged operation in Illinois is very important in our global economy," Ross said. "We are very, very happy they've decided to invest and stay in Illinois."

Daley's news conference was his first session with local reporters since he traveled to Rio de Janeiro with local planners to see how the Brazilian city is handling the Pan American Games. Rio, like Chicago, is a contender for the 2016 Summer Olympics.

On Monday, Daley and Chicago police showcased a new anti-terrorism command center.

Mike Ramsey can be reached at (312) 857-2323 or ghns-ramsey@sbcglobal.net.

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