Schaumburg may toughen rules for some tax incentives

  • A request by Amada Machine Tools America Inc. has prompted Schaumburg to consider toughening the criteria for industrial businesses getting county tax breaks.

    A request by Amada Machine Tools America Inc. has prompted Schaumburg to consider toughening the criteria for industrial businesses getting county tax breaks. Daily Herald file photo, 2008

Updated 8/28/2015 8:23 AM

Schaumburg officials are considering toughening the criteria for industrial businesses asking for county tax breaks if they are already in an existing tax-increment finance district.

The new criteria were prompted by Amada Machine Tools America Inc.'s request for a renewal of its Class 6B property tax incentive at 2324 Palmer Drive, which is now within the village's new North Schaumburg TIF district.


A Class 6B incentive essentially cuts the property taxes of an industrial business in half for 10 years. The taxes then gradually increase during the 11th and 12th years before returning to normal. However, businesses can request a second incentive when the first one runs out.

Both the Class 6B incentive and TIF districts cause a shift in the property tax burden for taxpayers and taxing bodies, Schaumburg's Economic Development Manager Matt Frank said.

The incentive is designed to make certain vacant industrial properties in Cook County competitive with those of the collar counties.

A TIF district lasts for 23 years and is intended to spur redevelopment within its borders. It works by freezing the amount of tax each local government agency receives at the level of the first year. Any increase in the amount property owners pay goes to a fund to finance public improvements within the district.

Frank said Schaumburg's Finance, Legal and General Government Committee has recommended Amada for the Class 6B renewal as it meets the proposed guidelines. The final decision rests with the Cook County Board.

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The new criteria include additional investment in the property sufficient to raise its assessed value by at least 25 percent within two years.

Qualifying businesses must also add a minimum of one full-time employee per 1,000 square feet of business space, provide ongoing involvement and financial support in the community, and accept limitations to their ability to appeal their property assessments.

These guidelines go even above the criteria for renewing Class 6B incentives anywhere in the village, that were approved at the start of the year.

Paddock Publications, publisher of the Daily Herald, receive a renewal of its Class 6B incentive for its Schaumburg printing facility in 2014.

There has been only one previous example of a Class 6B being awarded in a TIF district in the village before Amada's request, Frank said.

This was for Sunstar Americas Inc. to build its new North American headquarters next to Medieval Times Dinner & Tournament overlooking the Jane Addams Memorial Tollway.

The Class 6B within the new TIF district was considered an incentive to bring the previously unincorporated and tax-exempt property that had been owned by the Archdiocese of Chicago onto Schaumburg's tax rolls, Frank said.


Ric King, assistant superintendent for business operations in Schaumburg Township Elementary District 54, said his district was not consulted about the changes to Schaumburg's Class 6B criteria but generally stays neutral on TIF district issues.

While sensitive to the fact that TIF districts affect the distribution of the tax burden, they also spark redevelopment that attracts new businesses and residents to the area, King said.

"We're supportive of the efforts of the village to make it a community that's thriving," King said.

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