Elgin OKs pawnshops within city limits

With a buffet of payday loan stores, auto title loan locations and "cash for gold" joints dotting Elgin, does the city really need a pawnshop?

The Elgin City Council answered that question Wednesday night with a yes, saying pawnshops have tougher regulations, charge lower interest rates than loan stores and could provide people strapped for cash with a viable and safe alternative.

"This is a better way for them than some of the other establishments that we have," said Mayor Ed Schock. "It's not perfect, but I think it's good."

The change will allow Lee Amberg to open Elgin Jewelry and Loan in a strip mall at 943 N. McLean Blvd. on the city's near northwest side.

Amberg, who operates six pawnshops in the Chicago area and suburbs, along with two more in Florida, told the city's plan commission last month that 93 percent of items pawned at his establishments are eventually reclaimed by their owners, according to transcripts on the city's website, cityofelgin.org.

Amberg also told the plan commission that national statistics show that .001 of 1 percent of items pawned are stolen goods and his stores provide a daily inventory to police and also subscribe to a national database that catalogs all items.

"We loan money to people who don't have access to banking and statistically, in most areas, that percentage is growing," he told the city last month.

City Manager Sean Stegall said all of Amberg's references checked out, and Amberg received the first license to operate a pawnshop in the city.

Councilman Richard Dunne was the lone no vote, saying there's more locations in that area where people can get a short-term loan rather than a loaf of bread. Councilman David Kaptain, who is a member of the nearby Eagle Heights Homeowners Association, which opposed the pawnshop, cited a conflict of interest and abstained.

While Amberg said many of his clients are middle and upper class, Elgin council members said it could provide an alternative to lower-income residents.

Councilman John Prigge, who is an auctioneer by day, supported the plan. "I believe in this business. I believe it will fill a void," he said. "This will be an enhancement to the area."

Councilman John Steffen agreed.

"I see this as a way to steer these people toward better options," he said. "I see this in a little different light."