Schaumburg businesses cautious to react to tax
Schaumburg's plans to consider a municipal property tax before the end of the year would put an even higher financial burden on its many businesses than on homeowners.
Yet, the village's largest commercial property owners Wednesday proved more reluctant to react immediately than were homeowners the day before.
Marc Strich, general manager of Woodfield Mall, the most valuable property in Schaumburg, said it's still too early to gauge the impact of the proposed municipal property tax.
According to the village's estimated tax rate, Woodfield's property tax bill would increase by about $1.4 million.
Also mum were officials from Motorola's Schaumburg-based global headquarters, Joseph Freed & Assocs., which owns Streets of Woodfield, and Inland Real Estate Corp., which owns seven shopping centers in the village.
Ironically, Wednesday was the day of the Schaumburg Business Association's annual Expo at the convention center. The event was anticipated as a time to look for rays of light amid the economic downturn, but ended up falling the day after the village's tax news.
"It's always a challenge keeping people upbeat in a down economy," SBA President Laurie Stone said of her members. "They all just got Cook County property tax bills that would knock your socks off."
Stone said the SBA will declare a position on the proposed property tax by the time of a public hearing on the matter Dec. 15.
She also reflected on what the absence of a municipal property tax has meant in building Schaumburg's attractiveness to businesses.
"I'm sure it's been a factor," she said. "Businesses like to go to communities they feel are friendly to them and where they're more likely to be successful."
Village officials do claim the tax won't change Schaumburg's position as the best place in the region to have a business. They say theirs will be the lowest municipal property tax around apart from Elk Grove Village's and insist Schaumburg's investment in business infrastructure remains second to none.
Though it's adding another layer of taxes to what property owners already pay, Schaumburg's portion will end up as only about 8 percent of the total paid to all taxing bodies, village Finance Director Doug Ellsworth said.
Stone agreed that in locating a business, the municipal portion of property taxes is only one small factor in what business owners have to consider.
"Businesses need to assess the big picture," Stone said. "People realize taxes have risen everywhere. The village wouldn't have taken this step if they saw another way. It's very easy to be an armchair quarterback if you don't have to provide the services."
Still, she says the village's claims of cash flow problems will probably gain limited sympathy at best from businesses managing money woes of their own right now.
And, in any economy, businesses tend to pass on such cost increases to their tenants, Stone said. The SBA itself will surely feel the impact of the property tax through its office lease, she added.
Village staff Tuesday announced their recommendation for a property tax that would bring in $23.7 million next year, helping fill an existing $17.6 million hole in the budget caused by dwindling sales taxes and other consumer-based fees.
Though the tax would come in as 25 percent of general fund revenues, officials say the goal is to keep it as low as possible, especially if sales tax revenues climb again in the years ahead.
Officials plan to approve a preliminary levy on Tuesday, Nov. 24; hold a public hearing Dec. 15; and consider final approval of a property tax on Dec. 22.
Bigger properties, bigger tax bills Homeowners may not like Schaumburg's proposed new property tax, but the bigger sticker shock could be coming to commercial landowners. Here's a look at the estimated impact on some the village's largest properties*. Location Potential tax bill increase Woodfield Shopping Center $1.4 million Schaumburg Corporate Center, 1501 Woodfield Road $460,000 Zurich North American building, 1400 American Lane $435,000 Woodfield Preserve Office, 10/20 Martingale Road $373,000r Motorola, Algonquin and Meacham roads $356,000 Streets of Woodfield $325,000 Hyatt Regency Woodfield, 1800 E. Golf Road $160,000 IKEA, 1800 E. McConnor Pkwy. $159,000
* Tax payments refer only to the municipal portion of the bill and are estimates based on the village's estimated property tax rate of $0.503 and assessed valuations provided by the Schaumburg Township assessor.