Main and Main - Part 3

Why is Amazon building a grocery/general merchandise facility in Orland Park? Aren’t we crowded with grocers as it is?

Jewel, Pete’s, Mariano’s, Trader Joe’s, etc.?

Amazon, even with Whole Foods, has a 3% share of the grocery market while Walmart has a 21% share of an estimated one trillion-dollar market. Walmart salivates at Amazon’s online presence while Amazon drools at Walmart’s in-store grocery business.

That’s what this is about.

The village stands to benefit from this battle of the titans with an expanded tax base. Still, some grumble that no matter what happens with the old Petey’s II and the thirty-five acres, residential tax bills won’t be mechanically adjusted down because of the development.

So…what’s the point?

Why not just leave the corner undeveloped?

Before the mall opened fifty years ago, the 1975 special census identified 13,137 residents in Orland Park. Three years later the estimate put the population closer to 18,000.

A 37% population increase in three years that now included a 1.2 million square foot mall.

Did the addition of mall in 1976 re-adjust the residential EAVs (equalized assessed values) downward?

No.

Orland Park, like surrounding communities, was in the midst of a growth spurt where housing demand far outstripped supply and increased the EAVs. Some of this demand was driven by the mall’s presence.

Here’s the truth about big retail developments and residential property taxes:

In most Illinois (and U.S.) districts, a big retail development does not automatically make residential property taxes go up or down.

Either outcome is possible, because property taxes are driven by:

(1) how much revenue local taxing bodies choose to levy and

(2) how the total taxable value (EAV) is distributed across properties.

So, when a large retail development is added, it mainly changes total EAV and the mix of EAV. What happens next depends on what happens to levies and other assessments.

Residential bills can rise even with a shiny new retail complex if any of the following occur:

1. Levies increase (new spending, higher pensions/insurance, new municipal service demands, etc.). A larger tax base does not stop governments from levying more; it can simply change the rate required to collect that levy.
2. Your home’s assessed value rises faster than the average (e.g., the development boosts nearby sale prices, or your neighborhood reassesses upward more than the rest of the district – this is what happened in the 1970s). Cook County’s primer notes that different properties’ assessments change by different amounts, so impacts vary parcel-by-parcel.
3. The project receives incentives that reduce its near-term tax contribution, shifting more burden onto everyone else (at least temporarily).

In Orland Park (Cook County), a large retail development can reduce the residential share of the property tax burden, but it often does not—and in some cases residential bills still rise. The outcome depends on (1) whether the project’s value actually shows up in the “regular” tax base and (2) what local taxing districts do with their levies.

Cook County’s system is levy-driven: taxing districts file levies, and the County Clerk calculates tax rates that, taken together (“composite rate”), are applied to your equalized assessed value.

So, a new retail project affects you only through:

• Tax base (EAV) changes: more (or less) taxable value in the district; and/or
• Levy changes: schools, parks, village, county, etc. decide to request more (or less) property-tax revenue.

When retail development can help residential taxpayers (rate relief / burden shift)

Residential taxes can go down relative to what they otherwise would have been if all of the following are true:

1. The retail project adds meaningful new Equalized Assessed Value (EAV) to the tax codes your home sits in, and
2. Taxing districts do not increase levies proportionally, and
3. The project is not sheltered by TIF capture or significant incentives.

Cook County’s classification structure can make this effect more plausible than in non-classified counties: most residential property is assessed at 10% of market value while commercial is assessed at 25% (before equalization), meaning a large commercial project can add a comparatively large chunk of assessed value.

What are the positives?

The Village’s own press release frames the project as generating “millions in sales and property tax revenue” and specifically emphasizes sales-tax as the resident-facing benefit.

Even if that doesn’t lower your tax bill, it can:

• Support municipal services without leaning as hard on property taxes
• Reduce the need for future fee increases or new borrowing
• Create budget flexibility for capital work that otherwise gets deferred

None of this can be accomplished by leaving Petey’s II to deteriorate and leaving the rest to nature.

Doing nothing with the site won’t lower our residential taxes, either.