Jul 29, 2014
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Give Company A Tax Break? Niles Board Split

One company wanted to buy a vacant property to expand in Niles, but said it needed a tax break to do so. Trustees disagreed Tuesday over whether to just give it to them or wait until they could develop criteria for which companies get tax breaks.

Give Company A Tax Break? Niles Board Split Give Company A Tax Break? Niles Board Split


A request from a business for a tax break gave rise to heated discussion on the Niles village board Tuesday.

Trustee Andrew Przybylo recommended the board grant a tax break called a 6B to Gustafson Group, LLC, which wants to purchase a vacant building in disrepair at 7430 N. Croname Road, Niles, and renovate it extensively to conduct business there. Gustafson is a family-owned business that has done commercial printing in Niles for 25 years, he stressed. 

The 6B is a Cook County program that gives businesses an incentive to occupy vacant property, according to a board agenda item explanation.

However, Trustee Chris Hanusiak urged the board to develop parameters and guidelines for when to grant businesses 6B status.

"We talked at the last meeting about establishing parameters for using 6B. There are many vacant properties, and we could get inundated with many 6B applications," he said.

He moved to table the vote to the next board meeting to give the board time to develop guidelines on when to grant businesses 6B status.

Chuck Ostman, the director of community development, noted that the property buyer and seller wanted to conclude the sale before the end of the year to get tax advantages. 

Przybylo and Mayor Robert Callero both indicated their willingness to develop parameters in the future, but urged the board to grant 6B status to Gustafson immediately.

"This is a question of loyalty. This is ludicrous," Przybylo said. He urged the board to pass it, saying, "Anything else is anti-business and is disruptive to community."

But Hanusiak said that if the village grants one business a tax break, other businesses have to pay a larger share of taxes. He questioned whether that was fair to other businesses. 

"We have to decide-- are we going to push other businesses out of Niles? Because their taxes could go up," he said. 

Trustees Jim Hynes and Louella Preston asked questions to try to clarify the property tax implications, and Finance Manager Scot Neukirch said that Cook County taxes collected from vacant property are typically less than that of a property designated a 6B.

Cook County taxes occupied commercial property at 36 percent. With the 6B, however, the business would pay 16 percent, he said. (UPDATE: Neukirch clarified after this article originally posted that he was using percentages from 2010, since that was the last time he worked on a 6B.)

The Cook County assessor's office website says that a 6B business gets assessed at 10 percent of its market value, instead of the usual 25 percent, for the first 10 years--a significant tax savings. Then it goes up gradually after that, according to the Village of Wheeling's website.

Hynes asked "who loses?", i.e., if someone gets a tax break, does someone else have to pay more?

Neukirch replied that municipalities do not lose money because the 6Bs are already factored in to the tax base when the levies are calculated.  

"We have to get educated so we know what we’re doing here," Hynes said. 

Callero turned to Hanusiak and said, "I want to make sure (to note) that your statement was incorrect that we’re putting taxes on the other businesses."

Hanusiak responded that the village needs parameters so that businesses can know if they qualify for 6B and so the village knows how to prioritize in case it gets 20 applications for 6B status.

"This is not against the company that’s filing this at all," he said. "... We don’t have any true understanding of what a 6B is."

"All this wisdom is dizzying. Call the motion," said Przybylo, asking for the vote to be called. 

Callero urged the board to grant 6B status to the company.

However, the board tabled the issue, deferring it until January, by a 4 to 1 vote with one absence.

A man in the audience asked if he could comment, was recognized, came to the podium and identified himself as John Gustafson, one of four brothers in the family-owned company. 

He told the board he agreed that they needed parameters, but that his company drew up the deal counting on the 6B status, and the deal would need to be closed by the end of the month.

"We don’t have a signed contract, we’ve been going back and forth. The building is a dive and we’ve got to put a lot of work in," he said. He said the company has three other buildings in Niles, none of which are 6B.

Materials presented to the board indicated the Gustafson's printing company, JohnsByrne, employes 131, and the expansion would allow them to hire "hopefully" 10 more full-time and 35 more part-time employees. 

After he finished, Callero asked the trustees if they wanted to make a motion to re-open the vote, but none of the trustees responded.

"I’m sorry, Mr. Gustafson, I’m ashamed of this board," Callero said.

During the public comment period, Harry Achino, a resident and businessperson, expressed his displeasure with the board's decision and said he apologized to the Gustafsons for getting caught in the middle of a political squabble. 

"What was missing in the discussion was the real estate taxes they are paying on all their other properties," he said.

Norbert Johnson, also a resident and business person, echoed his comments.

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