East Dundee to consider creation of business district

East Dundee trustees are set to implement a new special taxing district near one of the village's busiest intersections as a way to curtail the village's economic downside with word that the village's largest revenue generator will close.

The village board on Monday held a second public hearing on a proposed business development district at the intersection of routes 25 and 72 on the village's east side.

The designation would allow the village to add up to 1 percent in sales tax to the current taxes in the district. The village is considering adding one-half percent to the current 8.5 percent.

The revenue generated from the additional tax would be reinvested in the area to cover expenses related to rehabilitating and redeveloping the area. Retailers in the area include Wal-Mart, numerous used and new auto dealers, auto repair shops, as well as the River Square Shopping Mall. A business development district is similar to the village's tax increment finance district but would not add on to property tax revenue.

Revenue generated would fund programs to address the area's decline such as marketing development opportunities n the district through channels such as the village's Web site, enhance entrance way signage, rehabilitate existing structures and improve streetscape throughout the corridor.

Unlike the previous public hearing, residents and business owners attended and voiced concern about the increase in sales tax.

"There's a lot of talk about attracting new businesses to the area but we have got to keep the businesses that are already in the area," said Brian Conradt, general manager of Saturn of Dundee who said the area's crumbling infrastructure and the economic decline are hurting sales and service revenues.

"It's not a matter of how much money car dealerships are making, it's a matter of if car dealerships are making money," Conradt added.

The proposed district covers about 266 acres with a majority of the use zoned for office and commercial uses with two small lots zoned for residential use.

Robert Skurla, the village's economic development consultant, said the additional tax is estimated to generate between $400,00 and $450,000 as long as Wal-Mart remains in business.

"If Wal-Mart could keep up for a year, we could generate substantial funds to get something done," Skurla said.

But former Village President Roger Ahrens, who now owns Piece-A-Cake Bakery, said the additional sales tax would not generate the anticipated revenue because the village does not have the necessary sales base.

"You are not going to generate $300,000 without $60 million a year in sales taxes," Ahrens said.

And, Ahrens said, hitting people in their wallet "is not the way to go."

"This would affect everybody," Ahrens said. "It would affect sales, it would affect everybody."

The village will consider the proposed business district at its Monday, Sept. 29, special board meeting.