Lincolnshire officials considering tax-sharing deal with local brewpub
Lincolnshire officials are considering a tax-sharing deal with a local brewpub to help the business raise money for expansion.
The Half Day Brewing Co., which is in the Village Green Shopping Center at Milwaukee Avenue and Olde Half Day Road, is seeking a multiyear tax rebate that could total $250,000.
The company wants to use the money to expand brewing capacity and begin distributing kegs of its products to the Tap House Grill restaurants in the suburbs. The brewpub and the restaurant chain both are owned by the Tap House Grill Management Group.
Half Day Brewing also plans to begin selling its beer in cans to other restaurants and to liquor stores.
The proposed tax deal would return to the business half the proceeds of sales tax and food and beverage tax the village collects from Half Day Brewing.
The rebate would be limited to $100,000 annually and would cap at $250,000 over the life of the deal.
The company initially wanted to borrow $500,000 from the village, but the tax-sharing deal developed after village officials voiced concern about lending money to a restaurant operation, Village Manager Brad Burke said.
"The village has not provided loans to businesses in the past," Burke said.
Half Day expects to pay the village $96,000 in sales tax and food and beverage tax annually, according to a memo Burke wrote to trustees. Based on that estimate, an estimated $48,000 would go back to the business each year, and the business likely would hit the $250,000 cap within five or six years, Burke wrote.
Reimbursements would be quarterly.
Half Day Brewing opened in 2016 in the same space that housed Flatlander's Restaurant & Brewery from 1996 to 2012.
Tax-sharing deals are most commonly offered as an incentive to entrepreneurs considering opening a business in a community, rather than existing businesses.
Burke sees the proposal as a chance to help Half Day Brewing expand its local operation and maintain its viability "in the competitive restaurant market."
Officials also don't want Half Day Brewing to leave and for its 14,500-square-foot building to be vacant for years once more.
"Given the size of the facility, it was a tough restaurant space to fill," Burke said.
If the brewpub closes and fails to open again in Lincolnshire within 18 months, or if it closes and then reopens out of town, the company would have to repay a portion of the tax rebate.
Additionally, if the business outgrows its current location, the deal requires the owners to find a different location in Lincolnshire.
A Tap House Grill Management representative couldn't be reached for comment.
Village officials publicly reviewed the proposal Tuesday night during a committee-of-the-whole meeting. The board could approve the plan at its June 11 session.