Purchase, rehab of Wheeling site rests on tax breaks, developer says
A distributor of industrial machinery will seek the Wheeling village board's support Monday to clear one hurdle toward securing Cook County property tax breaks for the next 12 years.
Vinston U.S. Corp. says its purchase and rehab of an empty building on Carpenter Avenue isn't financially feasible without the county's Class 6B tax incentive. If the deal is approved, the company would move its operations from Niles to Wheeling and expand them.
Thirty-four Wheeling businesses have received the perk from 2003 through last December.
"The class 6B is our primary economic tool to reoccupy and rehabilitate vacant industrial properties in the village," said John Melaniphy, Wheeling's economic development director. "Just in the last year or so, we've reoccupied over 640,000 square feet of vacant space in the village."
The 40-year-old structure, formerly used as a warehouse, has sat completely vacant since February. But parts of the more than 16,000-square-foot space have been persistently vacant since 2006. A number of challenges have kept the property from attracting consistent business, Melaniphy said.
"We're looking at an older building that is not as marketable to meet today's prototypical needs of warehouse and distribution facilities," he said.
Besides age, the building's ceilings are low, and it doesn't have enough loading docks for most manufacturers, Vinston's attorney argued in a letter to the village.
With most of Wheeling's industrial base built out - covering about 13.5 million square feet - there's a limited supply of vacant land for developers to build to their tastes, Melaniphy said.
As a result, the village works to reoccupy older properties, he said. The incentive is meant to do that and keep manufacturers from opening shop in neighboring counties with cheaper tax rates.
If the Cook County Board approves the tax breaks, the property would be assessed at 10 percent of its market value for a decade; 15 percent for the 11th year; and 20 percent for the final year. Industrial sites are typically assessed at 25 percent.
After 12 years, Wheeling prohibits businesses from renewing the incentive, while suburbs with a smaller inventory of industrial properties tend to allow extensions.
"We believe that the Class 6B was created to provide short-term assistance and that the Class 6B has a finite life," Melaniphy said.
In Niles, Vinston U.S. Corp. currently has three full-time employees. If the company moves to Wheeling, it could potentially add three more over the next two years. Most of the space, 12,000 square feet, would be used for warehousing and distribution.
Vinston also plans to expand that portion by 8,000 square feet within three years, an estimated $480,000 project.