Schaumburg sets renewal policy for tax break

  • Cheese is added to pizzas at Nation Pizza Products in Schaumburg. The business was the first in the village to receive a renewal of the Cook County Class 6B property tax incentive in 2007.

    Cheese is added to pizzas at Nation Pizza Products in Schaumburg. The business was the first in the village to receive a renewal of the Cook County Class 6B property tax incentive in 2007. JOE LEWNARD | Staff Photographer, 2011

 
 
Updated 1/28/2015 1:53 PM

Schaumburg trustees have approved specific criteria to consider the growing number of renewal requests for Cook County's Class 6B property tax incentive for industrial businesses.

These require a demonstration of significant employment and business growth, substantial capital improvement, ongoing community involvement and the need for another 12 years of reduced taxes.

 

Only the Cook County Board can approve these long-running tax breaks, but a recommendation by the appropriate municipality is required in advance.

Since 1988, Schaumburg has recommended more than 80 Class 6B incentives. But eight renewals have been recommended since 2007, with more requests expected this year, Schaumburg Economic Development Manager Matt Frank said.

The tax break has helped to retain 3,800 employees in Schaumburg and to bring in 2,800 new workers.

"It's had a huge impact for us," Frank said.

Some nearby communities like Elk Grove Village and Wheeling prohibit renewals after a dozen years of a business benefiting from reduced property taxes.

Hoffman Estates reviews renewal requests on a case-by-case basis as Schaumburg has been doing, but villages like Arlington Heights and Mount Prospect have established specific criteria.

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In Arlington Heights, a business must employ at least 25 people -- 10 of whom must live in the village. The tax break must also be shown to have a five-year financial benefit to the village with no adverse impact to other firms.

Mount Prospect renewal requests must demonstrate how the business has been involved in the community and show how they've expanded during the period of the tax break.

Some Schaumburg renewal requests have already been denied under the less tough criteria the village has been using up until now, Frank said. With a couple exceptions, the businesses have continued to operate.

The first renewal in Schaumburg was granted to Nation Pizza in 2007. Paddock Publications, publisher of the Daily Herald, received one for its Schaumburg printing facility in 2014.

                                                                                                                                                                                                                       
 

While the village is aware that some industrial businesses have been operating for 30 years or more without such tax breaks, there haven't been many complaints voiced by such businesses, Frank said.

To qualify for the Class 6B program in the first place, an industrial property must have been vacant or on the market for at least two years. The tax incentive is intended to keep the development of such properties competitive with similar sites in surrounding counties.

The incentive reduces the level of assessment on a property from 25 percent to 10 percent -- effectively cutting property taxes in half -- for 10 years, village officials said. The level of assessment then rises over the next two years before returning to normal.

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