Officials back incentives for DS Volition

Officials back incentives for DS Volition

CHAMPAIGN — Fearing the damage that two empty floors in the One Main building might inflict on downtown Champaign, city council members said on Tuesday night that they want to give up to $200,000 in incentives to video game developer DS Volition to stay in the heart of the city.

Planning and Development Director Bruce Knight said losing DS Volition would be a major setback as officials begin staring down a December 2017 deadline, when city incentives for attracting or expanding business in downtown Champaign won't be so readily available.

"I think it would be very significant," Knight said. "The reality is downtown is still fragile. It's not a marketplace that can completely survive on its own."

DS Volition's 10-year lease at One Main is up at the end of May, and the company had been looking at cheaper options for office space. But general manager Dan Cermak said he and the other employees want to stay downtown — they just need to justify the cost to their Germany-based parent company.

Whether DS Volition would have left Champaign without the $200,000 deal is unknown. Knight said the company had told city officials that it was considering at least one alternative location at the Interstate Research Park in northwest Champaign.

"Not necessarily, but it was a possibility" that the company could have left Champaign, Knight said.

But on display Tuesday night was the ripple effect that DS Volition's 200 existing employees have on surrounding downtown businesses. The owners of Cream and Flutter, Jane Addams Book Shop and Exile On Main Street all told city council members that having DS Volition downtown is crucial to their businesses. The owners of Pekara Bakery and Bistro, Cafe Kopi and the Blind Pig also made their case in written communications read during the meeting by Mayor Don Gerard.

"I put my business into One Main because I knew Volition was going to be in there," said Jeff Brandt, the owner of Exile On Main Street. "They have literally a daily effect on my business."

A survey of DS Volition employees found they accounted for 30,000 visits and spent about $375,000 at downtown restaurants and retail stores over the last year.

Cermak said that, without the incentives, he would not have been able to justify the cost of staying at One Main to DS Volition's German owners.

"What their business is about is the bottom line," Cermak said.

The office needs to be redesigned if DS Volition is to grow and hire as many as 100 more people. The $200,000 in incentives will go toward those upgrades, which will include an expensive new server room.

The studio — best known for its "Saints Row" series of video games — was acquired last year by Germany-based Koch Media.

"This kind of thing allows me to go them and say, 'Hey, this is why we should stay in downtown Champaign,'" Cermak said.

The agreement still needs to be formalized at an upcoming city council meeting, but it will look very similar to the deal Yahoo got from the city to expand in the University of Illinois Research Park. DS Volition stands to receive $3 per square foot of new high-tech office space and $1,000 per new employee making 2.5 times minimum wage. The deal is capped at a total $200,000 payout should the game developer meet all its goals.

"Anybody that doesn't think it will have a huge impact on the effort of downtown and trying to bring it back is not thinking clearly," said council member Vic McIntosh.

Downtown Champaign is still on "an upward curve," Knight said, after it lost large businesses decades ago to Market Place Mall and the Neil Street pedestrian mall drove away traffic. A downtown tax increment financing district, which is a program that keeps property tax money set aside specifically for economic development in the immediate area, has allowed city officials to nudge along business growth over the past two decades.

But that program expires by law in December 2017, and downtown Champaign might not be quite there yet, Knight said. The opening of the Hyatt Place hotel and keeping DS Volition where it's at will help, though.

"We need a downtown that can stand on its own by December 2017," Knight said.

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cgirl wrote on April 23, 2014 at 11:04 am

This makes me happy. I think that this will result in a positive return on investment. Several of my friends work at Volition, and if they are typical of employees, then it won't take long for Champaign to make that money back. I'd be surprised if it took a year.