'Atrocious': Des Plaines moves to revoke tax break for company

A Des Plaines company improperly took a Cook County tax break, paid nearly $170,000 less in taxes than required, illegally allowed businesses to occupy its building and installed a parking lot without permission, according to city officials.

Aldermen voted unanimously Monday to ask Cook County to revoke the 6b property tax incentive granted to Aero M & P Properties, an entity of Ampol Group International. While cities recommend approval of the tax break, which is intended to spur industrial growth, it's the county that ultimately grants requests.

City council members said the business' abuse of the county tax break is "egregious" and "atrocious."

"This is an egregious offense and abuse of a right we have given to a business owner who has effectively stolen taxpayer dollars from the residents," Mayor Matt Bogusz said.

Ampol Group International CEO Peter Schultz told the city council the company didn't realize it could be breaking any laws and it's actions stem from trying to fill its oversized building at 521 Santa Rosa Drive.

"When we first built the building, it's hard to plan what's going to happen and how our business would grow," Schultz said.

The company received a 6b property tax incentive in 2015. The tax incentive reduces property taxes for industrial businesses that occupy previously vacant or obsolete buildings. It lowers the assessed market value of properties to 10 percent for 10 years, 15 percent the eleventh year and 20 percent the twelfth year before returning to the normal 25 percent.

At the time, Ampol Group International told city and county officials it would spend $700,000 to remodel the Santa Rosa Drive building - half a million of which would happen in the first three years - and create up to 25 jobs in Des Plaines.

The company said the expansion was necessary to accommodate its growing business of manufacturing lifts, conveyors, dock plates and roller systems for cargo companies such as FedEx, DHL and UPS.

However, that didn't happen, city officials said. In 2018, city officials began auditing 6b recipients to ensure the companies were undergoing substantial rehabilitation and investing dollars. Their investigation of Ampol Group International uncovered a list of problems, according to the city.

For example, the city found that the company had not invested $500,000 in the building as promised. Additionally, it demolished part of the building without a permit and paved a nearly 20,000-square-foot parking lot over green space without installing stormwater facilities, curbs and gutters, or obtaining permission from the city or Metropolitan Water Reclamation District.

The city also determined that Ampol Group International had been operating a contracting and snowplow removal business in a large part of the building, which it never mentioned in its application for a tax break.

Some of the businesses located in the building, including contractor-based businesses and auto repair shops, did not qualify as "industrial uses" required to get the tax break.

According to the city, when the company submitted a building permit application, it contained false information in architectural drawings that indicated warehouse space where two auto body shops operated instead. Warehouse space would have required fewer parking spaces under city code than auto body repair shops.

Lastly, because the company completed construction inside and outside of the facility without a building permit, the corresponding increase in value was not reported to the city and the township assessor's office. This kept taxes on the property "superficially low," according to the city.

The company was supposed to pay about $126,000 in property taxes each of the first three years, according to the 6b application. Instead, it paid about $90,311 in 2016, $60,335 in 2017 and $60,335 in 2018. That's a total of about $168,516 less than the proposed taxes in the 6b application.

City officials say staff attempted to bring the property into compliance for nearly two years without success.

"We don't issue 6b's in good faith - we will follow up," 3rd Ward Alderman Denise Rodd said. "Let that be a lesson to anyone else who comes forward with a 6b (application), that there's a certain responsibility and a privilege to having this class and that the taxpayers are on the hook for it."