Submitted By
Tammie Grossman, Director Development Customer Services
Reviewed By
LKS
Agenda Item Title
Title
A Resolution to Support and Consent to the Class 7C Incentive Application of 221 Harrison Street, LLC for the Property Located at 219-221 Harrison Street Consistent with Recommendation of the Oak Park Economic Development Corporation (Oak Park EDC)
End
Overview
Overview
221 Harrison Street, LLC has requested, through the Oak Park Economic Development Corporation (“OPEDC”), Village of Oak Park support for its application seeking a Cook County Class 7(c) Property Tax Incentive for 219-221 Harrison Street.
Body
Staff Recommendation
Approve the Resolution
Fiscal Impact
Commercial property in Cook County is assessed at 25% of market value (as determined by the County Assessor). Under the Class 7(c) program, commercial properties meeting certain requirements are eligible to receive a reduced assessment level of ten percent (10%) of market value (again as determined by the Cook County Assessor) for the first three years of the program, fifteen percent (15%) for the fourth year and twenty percent (20%) for the fifth year. Projections show that the property tax incentive would yield approximately $100,000 in savings for each building over the five-year program.
Background
On August 7, 2017, the Village Board approved a Resolution to support and consent to Class 7C Incentive Application of the prior owner, Harrison Street Ventures, LLC for the 219-221 Harrison Street. In November 2017, prior to Cook County’s review of the 7C application, Harrison Street Ventures sold the property to the current applicant 221 Harrison Street, Ventures, LLC.
The Class 7C Incentive - the Commerical Urban Relief Eligibility (“CURE”) - is a new Cook County five-year commercial property tax incentive program. In order to be eligible for the program, a property must meet the following four requirements:
Real Estate Tax Analysis - the property has declining or stagnant assessed values for the last six years.
Viability and Timeliness - the project will move forward in a reasonably timely basis, resulting in economic enhancement.
Assistance and Necessity - the project would not move forward “but for” the incentive
Increased tax revenue and employment - the project with the incentive will result in higher real property tax revenue and will increase employment opportunities.
The 7C Applications contain personal financial information. They are available for review at the Village Attorney’s Office.
Below is the Oak Park EDC’s summary of how the property meets the eligibility criteria:
221 Harrison Street
Real Estate Tax Analysis: According to Cook County Assessor’s Office records produced by the applicant, the property’s assessed value stagnated or declined in three of the past six years (70% decline in 2014, 0% change in 2015, 55% decline in 2016 and 0% change in 2017).
Evidence of Vacancy: The property has been vacant for over 15 years, exceeding the twelve month minimum vacancy requirement. A vacancy affidavit can be provided upon request.
Proof of Necessity: Ownership has demonstrated that the property produces a negative return without the incentive based on market rents and reasonable expense/development costs assumptions.
Increased Tax Revenue and Employment: Projections show the potential for a 100% property tax increase once the incentive expires. Again, the property is currently vacant and any new business would result in increased employment opportunities.
Alternatives
Not adopt the Resolution or request additional analysis or information from the Oak Park EDC.
Previous Board Action
On August 7, 2017, the Village Board approved a Resolution to support and consent to Class 7C Incentive Application of the prior owner, Harrison Street Ventures, LLC for the 219-221 Harrison Street.
Citizen Advisory Commission Action
NA
Anticipated Future Actions/Commitments
NA
Intergovernmental Cooperation Opportunities
NA
Performance Management (MAP) Alignment
A governance priority for the Development Customer Services Department is economic development.