Des Plaines city leaders hope a $5,000 carrot will draw new retail businesses to fill the more than a dozen vacant storefronts in downtown.
The Des Plaines city council Tuesday night unanimously authorized a $50,000 initial budget for the Downtown Business Assistance Program to be funded through Tax Increment Financing District No. 1, which is projected to have a $1.3 million fund balance by year's end.
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TIF District No. 1 includes the Des Plaines Public Library plaza and Metropolitan Square.
New retail businesses wanting to locate in that downtown corridor along Miner Street between Lee and Des Plaines River roads could be eligible for up to $5,000 in incentive. To qualify, businesses must sign a minimum one-year lease and show proof when applying for the grant.
Existing Des Plaines businesses that want to relocate in downtown also would be eligible to participate in the program.
Any new sales tax dollars generated by those businesses would replenish the TIF District No. 1 fund until the grant is repaid. Any tax receipts beyond that would go into the city's general fund.
Businesses approved for the grant can only apply the funding toward hard costs, such as interior build out, signage and physical improvements.
A few suburban communities - Arlington Heights, Elmhurst, Lisle, Mount Prospect, Palatine and Wheaton - have been experimenting with incentive programs for years with varying degrees of success.
"I don't think in Arlington Heights, Elmhurst or Palatine have filled all the storefronts," Des Plaines 8th Ward Alderwoman Rosemary Argus said. "I think it's definitely an improvement."
Presently, Des Plaines' program would only be open to businesses that generate sales, and food and beverage taxes.
Fifth Ward Alderman James Brookman said service-oriented businesses should also be allowed to compete for the funding.
"I think that's unfair discrimination against a business owner," Brookman said. "If a service business wants to come in, they should have the same opportunity as retail. I don't think government should decide what happens in the marketplace. The idea is to fill the storefronts."
Yet, the rest of the council rejected the idea of opening up the grant to service businesses at this time.
"We need to incentivize the businesses in the types of commerce that people want in their downtown," 3rd Ward Alderman Matt Bogusz said.
Brookman voiced several concerns with the program in its current form, including that existing downtown businesses that want to renovate their buildings would be ineligible for the grant.
"We're kind of penalizing the people that have been there," he said.
Argus said that existing businesses can now apply for another city grant that helps cover a portion of the cost of building facade and awning improvements.
Sixth Ward Alderman Mark Walsten said the program could be revised down the road but should be implemented as soon as possible so businesses that are ready to take advantage of it now can.
"I think this is a great start," Walsten said.
Brookman successfully pushed through an amendment that would allow an applicant who was denied a grant by the city's Economic Development Commission a means to appeal that decision before the city council.
The city council also authorized spending $5,000 to promote the incentive program once city staff develop a marketing plan that would be vetted by the council. Ideas include dressing up vacant storefronts similar to what Mount Prospect and Elmhurst have done.
"This is not going to fix everything," Bogusz said. "This is not going to turn this economy around. This is one piece of the pie, and I think it's a good one."