They once built a train track through the Alps from Vienna to Venice before they had the technology to build a train that could make the trip. Wasteful government spending? Arrogance? No; just faith and good planning.
In 1999, we all heard the news about losing ComEd, but in 2001, we as a community had the faith to approve two school referenda in a single year. In 2002, the City Council committed to stay the course, kept all city services, limited spending and held the levy. 2003, the same decision. In 2004, we as a community ended Prohibition, not to foolishly attract just restaurants, but to be able to compete for retail, industrial and residential projects on a more level playing field. In 2005, we landed contracts with Walmart, County Inn, Culvers, CVS, Maine Plastics and more. In 2006, we saw the first shadow of a building in Trumpet Park with Calpine and FedEx. This is steady, strategic planning and it is working. All the negative propaganda to the contrary is very easy to create; but it lacks faith and is not a plan for financial recovery.
The plan has many layers, but Economic Development and TIF seem to be the most visible,
so let’s cover it. TIF #2 has already been retired. All of the new construction at 21st and Kenosha will be coming on the tax roles sixteen years ahead of schedule. TIF # 1 and #3 along Sheridan Road offer equally good news. Grants are awarded to new and existing businesses for facades, code upgrades, buy-downs, etc. These improvements will attract more businesses in time, like Market Square, and, just as importantly, they increase the
value of the buildings and create future tax revenues.
In all, since 2004, we’ve awarded $517,707.26 in business TIF grants. Whew! That's a lot of money to still see a vacancy at Hennessey's! What are those elected officials thinking? What could the Board of Review made up of reps from the ZBTHS Board, District 6, Zion Park District, the Library, the Chamber of Commerce, former Council members, business owners and volunteers working with myself, as Director, possibly be doing?
Quite simply, we're planning for the future. In exchange for our $517,707.26 investment, the business property EAV has increased from $7.38 million in 2005 to $10.03 million in 2007; a rise of $2.65 million in just two years. Even a non-MBA would agree that a 26% return on EAV and a 45% return in new increment are probably more than dumb luck.
While TIF has great successes, it also has limits. It cannot be used to hire police, fix neighborhood roads or lower taxes per state statute. Il also does not have the authority to manage private businesses and so, despite the same review process made by banks and investors, an owner can still misrepresent their experience or financial staying power. A business in a TIF has as much right to go bankrupt as anyone anywhere else. Location is no guarantee; consider Gurnee Mills, Hawthorne, downtown Chicago and bad management examples aren't all that hard to find. Luckily, unlike the bank or stockholders, TIF has the protection that its investment in the building improvements and the new EAV are permanent, even if an owner walks away, as in the case of Hennessey's.
As for the Country Inn grant, they must generate real estate taxes for six full years before they will see one penny of a grant payment. Separately, the have a limited rebate of hotel/motel tax based on performance, a revenue stream available only to the city for tourism and promotions. In the meantime, all of the money is invested and creating capital for other projects. This project delivered $4.5 million in new construction for the hotel and sparked four other projects in the same year. None received incentives, by the way.
What about all the rumors of tax incentives outside of TIF? Let's name them. Applebee's received a sales tax incentive to offset the higher cost of construction in Illinois than Wisconsin where they were planning to go instead. None of the real estate taxes or permit fees were waived. Walmart will receive the same type of incentive; but again no real estate taxes or permit fees are being waived. These are the only two projects that have received a sales tax incentive.
Other new projects include Dynacoil, no tax incentive, Maine Plastics, no tax incentive, FedEx, no tax incentive, Coral Chemical and Arby's, no tax incentives and, in fact by vacating the alley, we will actually add more taxable land to the project. National City, no tax incentive, Aldi, no tax incentive, Culver's, Zion Senior Cottages, Family Video, CVS, Salsa Brava, Great Lakes Credit Union, Calpine, Phillips 66, Shepherd's Crossing, all without tax incentives. Stonebridge Crossing, Zion Crossings, Walgreen's, Dunkin Donuts/Baskin Robbins and 7-11, all without tax incentives...seeing a pattern?
So why are they all coming to Zion if most of the talk of tax breaks is a lie? Because they have faith there is a future here. They believe we have a labor force that wants jobs with national companies. They believe in us, but some of us are still saying, "We're just Zion. Look at our schools, look at our neighborhoods.” Well these businesses have looked and they like what they see. We have problems, just like every community has, but how will they ever improve if we listen to people who can’t imagine a train track before the train exists, let alone have the ability to build one?
It's not 1999, we're not wringing our hands and wishing we were anywhere but Zion. We're a little older, but stronger for the experience and we will get out of this tax situation together, project by project. It will take faith and each one of us believing to keep things on track. As for those who only want to see our faults and predict the burden is too much to overcome, well, they really should consider getting out of the way of that oncoming train.
