West Dundee approves downtown business district for redevelopment projects
Despite opposition from some business owners, West Dundee is implementing an added 1 percent sales tax in its downtown area that officials say will help to fund redevelopment projects.
Trustees voted Monday to establish a downtown business district from Lincoln Avenue south along the riverfront to Oregon Street and bordered on the west by Third Street.
In a business district, the revenue generated by the additional sales tax can be used for improvements in that area. The estimated $65,000 generated per year as a result of the tax increase will go toward the downtown redevelopment plan, said Village Manager Joe Cavallaro.
"Stakeholders within the community and the community residents themselves place a very high value on the perceptions and image of downtown," he said. "I think this is continuing that motivation to work with downtown businesses and property owners to improve the overall area and thereby improving the community."
Village officials last fall issued $2 million in bond proceeds for various projects, including a market study, beautification projects and the acquisition of properties at First and Main streets. The new sales tax revenue will be used to pay off those debts and fund other projects, such as a riverwalk extension, site demolition and preparation for future development.
Trustee Dan Wilbrandt voted against the proposal to establish the business district, saying the village "put the cart before the horse" by spending money it didn't have.
The tax hike brings the overall sales tax rate in the business district to 9.5 percent - comparable to Carpentersville's 9 percent and East Dundee's 9.75 percent, Community Development Director Tim Scott said.
Randall Errington, owner of Bikini Bottom Bar & Grill at 107 W. Main St., pointed out customers at downtown restaurants or bars would be taxed at an even higher rate of 10.5 percent because of an additional 1 percent food and beverage tax adopted by the village in 2014.
Increasing tax rates in an area meant to be developed, he said, may have the opposite effect.
"I think this is totally obscene," he told the village board. "You want to develop, and you want to make things happen, you're doing things 180 degrees the wrong way."
West Dundee is also considering a special service area that would levy an additional $1.60 per $100 in taxable downtown property value. Half of the $70,000 generated from the additional property tax revenue would be used for redevelopment, and the other half would go toward participating in the Discover Dundee marketing initiative.
A public hearing for the special service area is April 18.
Bonnie Yates, 77, who lives and runs a counseling business out of 217 W. Main St., said the additional taxes are onerous.
"I do want my town to look beautiful," she said, "but it's getting to be a burden at my age."
Village President Chris Nelson said downtown redevelopment is not possible without municipal participation.
"The intent here is to put money into (buildings) and the public spaces along the river, and make this a more viable downtown," he said. "I firmly support the imposition of this tax, knowing that it's a challenge for some of the business owners. This is not a decision we take lightly, but it's a decision we need to make because nothing has happened without municipal investment."