Vernon Hills nixes shopper rebates

Attracting business remains a priority for Vernon Hills, but throwing money at shoppers won't be part of the strategy.

Neither will a tax on food and beverages to generate cash for low-interest loans or grants, though village trustees agreed rebating sales taxes to businesses that open or expand is an incentive worth pursuing.

The discussion Tuesday involved ways to keep the village's large commercial base humming, while simultaneously filling vacancies and attracting new stores, restaurants or other ventures.

First up was a suggestion to give shoppers who spend $500 during the holiday season a $50 gift card. The program would have been limited to the first 2,000 takers.

"I can't see it being positive in any way, shape or fashion to our bottom line," said Trustee Jim Schultz.

Staff estimated such a program could generate $1 million in sales, but admitted that number was uncertain. Based on its 1 percent cut, the village would see an increase of $10,000 in sales tax revenue.

"That tells me basically we've got a $100,000 giveaway here," Schultz continued.

Village Manager Mike Allison said it was more of a marketing program.

"There's no guarantee of success but it's trying to get people to come to town," he said. "The only reason we're bringing this up is because of the economy."

The village is considering several incentives needed because the commercial market has soured and tenants, rather than landlords, are calling the shots. That means less cash available for large-scale improvements, according to Assistant Village Manager John Kalmar.

"These are tools we can use to compete," he said. "We need to protect our market and continue to develop our retail base."

While there likely would be takers for grants or low-interest loans, the village board at this point isn't interested in imposing a food and beverage tax to raise money for it.

Sales tax rebates were regarded favorably because the village would share new revenues, not existing funds.

"You're splitting that money that neither of you would have had if the business had not gone forward," Trustee Thom Koch said.

Businesses that would apply for that incentive would have to submit detailed financial information.

In a separate matter, board members decided to limit the advertising budget for the 2009 holiday light show to $5,000. The budget last year was $17,000 for advertising on three radio stations.