Give Company A Tax Break? Niles Board Split

One company wanted to buy a vacant property to expand in Niles, but said it needed a tax break to do so. Trustees disagreed Tuesday over whether to just give it to them or wait until they could develop criteria for which companies get tax breaks.


A request from a business for a tax break gave rise to heated discussion on the Niles village board Tuesday.

Trustee Andrew Przybylo recommended the board grant a tax break called a 6B to Gustafson Group, LLC, which wants to purchase a vacant building in disrepair at 7430 N. Croname Road, Niles, and renovate it extensively to conduct business there. Gustafson is a family-owned business that has done commercial printing in Niles for 25 years, he stressed. 

The 6B is a Cook County program that gives businesses an incentive to occupy vacant property, according to a board agenda item explanation.

However, Trustee Chris Hanusiak urged the board to develop parameters and guidelines for when to grant businesses 6B status.

"We talked at the last meeting about establishing parameters for using 6B. There are many vacant properties, and we could get inundated with many 6B applications," he said.

He moved to table the vote to the next board meeting to give the board time to develop guidelines on when to grant businesses 6B status.

Chuck Ostman, the director of community development, noted that the property buyer and seller wanted to conclude the sale before the end of the year to get tax advantages. 

Przybylo and Mayor Robert Callero both indicated their willingness to develop parameters in the future, but urged the board to grant 6B status to Gustafson immediately.

"This is a question of loyalty. This is ludicrous," Przybylo said. He urged the board to pass it, saying, "Anything else is anti-business and is disruptive to community."

But Hanusiak said that if the village grants one business a tax break, other businesses have to pay a larger share of taxes. He questioned whether that was fair to other businesses. 

"We have to decide-- are we going to push other businesses out of Niles? Because their taxes could go up," he said. 

Trustees Jim Hynes and Louella Preston asked questions to try to clarify the property tax implications, and Finance Manager Scot Neukirch said that Cook County taxes collected from vacant property are typically less than that of a property designated a 6B.

Cook County taxes occupied commercial property at 36 percent. With the 6B, however, the business would pay 16 percent, he said. (UPDATE: Neukirch clarified after this article originally posted that he was using percentages from 2010, since that was the last time he worked on a 6B.)

The Cook County assessor's office website says that a 6B business gets assessed at 10 percent of its market value, instead of the usual 25 percent, for the first 10 years--a significant tax savings. Then it goes up gradually after that, according to the Village of Wheeling's website.

Hynes asked "who loses?", i.e., if someone gets a tax break, does someone else have to pay more?

Neukirch replied that municipalities do not lose money because the 6Bs are already factored in to the tax base when the levies are calculated.  

"We have to get educated so we know what we’re doing here," Hynes said. 

Callero turned to Hanusiak and said, "I want to make sure (to note) that your statement was incorrect that we’re putting taxes on the other businesses."

Hanusiak responded that the village needs parameters so that businesses can know if they qualify for 6B and so the village knows how to prioritize in case it gets 20 applications for 6B status.

"This is not against the company that’s filing this at all," he said. "... We don’t have any true understanding of what a 6B is."

"All this wisdom is dizzying. Call the motion," said Przybylo, asking for the vote to be called. 

Callero urged the board to grant 6B status to the company.

However, the board tabled the issue, deferring it until January, by a 4 to 1 vote with one absence.

A man in the audience asked if he could comment, was recognized, came to the podium and identified himself as John Gustafson, one of four brothers in the family-owned company. 

He told the board he agreed that they needed parameters, but that his company drew up the deal counting on the 6B status, and the deal would need to be closed by the end of the month.

"We don’t have a signed contract, we’ve been going back and forth. The building is a dive and we’ve got to put a lot of work in," he said. He said the company has three other buildings in Niles, none of which are 6B.

Materials presented to the board indicated the Gustafson's printing company, JohnsByrne, employes 131, and the expansion would allow them to hire "hopefully" 10 more full-time and 35 more part-time employees. 

After he finished, Callero asked the trustees if they wanted to make a motion to re-open the vote, but none of the trustees responded.

"I’m sorry, Mr. Gustafson, I’m ashamed of this board," Callero said.

During the public comment period, Harry Achino, a resident and businessperson, expressed his displeasure with the board's decision and said he apologized to the Gustafsons for getting caught in the middle of a political squabble. 

"What was missing in the discussion was the real estate taxes they are paying on all their other properties," he said.

Norbert Johnson, also a resident and business person, echoed his comments.

George D. Alpogianis December 14, 2012 at 07:03 PM
Dear CK, I am glad to see that you agree with the bulk of what I said. I understyand business. My father worked hard to get Kappy's going and insisted that I do the same. He made me do the same as him, take out a loan with my brother to buy his partners out and has just moved into semi-retirement about 1 month ago. NOBODY should be handed a business without working for it, entitlements are what is ruining our country. As Trustee Hynes, he is a lawyer that worked for the government, never in his own practice as far as I know. Trustee Preston has a law degree, and I believe never practiced as far as I know . She was also part of the Chicago Board of Education for years as I stated earlier. Lets not forget that we ran together on the same ticket 4 years ago, and I was amazed how she threw everyone, including myself under the bus as quick as she was done with them. That's why I chose not to run with her this time. The L6 would have benefited the Village greatly, since Sales Tax $$ were involved and the Village only sees a minute part of property taxes. Lets not also forget that during Blases' tenure, 2 Walmarts, 2 Targets, 3 Jewels and 2 Home Depots were opened and still provide a great source of revenue for US!
HARRY ACHINO December 14, 2012 at 08:09 PM
CK, Since you are to much of a coward to use your real name, your opinion is just more BS floating around cyberspace. George was kind enough to respond to your ranting and ravings I will not. Peace and have A nice day.
CK December 17, 2012 at 02:44 PM
Dear Mr. Alpolgianis: The minister said yesterday that we are supposed to tell others things to make their life better and so then ours is. I cant see why you say I agreed with the bulk of what you said. I didn't agree with anything. I was upset that you went after the two trustees becuase of their jobs. Blase was a lawyer and didnt have business until he was in power. Did you tell him he wasn't qualified. Governor Quinn who gave you a pardon is a lawyer and not a businessman. Did you complain to him about his lack of credentials to be a village trustee and even governor?????? As for the big boxes coming to niles, those locate at places identified by professional market researchers and not to places becuase some guy is mayor. My neighbors tell me that when Old Orchard got Fields Niles got Goldblatts under Blase. They also told me that years ago in Blases time many small businesses left Niles. Get real. Merry Christmas sir.
CK December 17, 2012 at 02:47 PM
Better thought to be a coward than be known as a screwball
Matthew Lagodzinski December 18, 2012 at 03:57 PM
In principle, I agree that there needs to be criteria to either approve or deny 6B requests. In the absence of that being defined prior to this request, I don’t think its fair to penalize the requestor. That being said, after watching the video it seemed clear to me that a more constructive discussion could have been attained if the request was presented a bit differently. The issue seemed to boil down to the following decision tree. The property is currently vacant, collecting 22k worth of taxes. First question, considering all of the repairs required, is it likely the property sell without a 6B (to any investor)? If the answer to that is No, then I think the response is to approve and collect the additional 14k in taxes for whatever that duration is. If the answer is Yes, then the question is, how long is the Village willing to wait to for a buyer to purchase outright without a dependency for the 6b (80k range)? From that decision, you can calculate the lost opportunity in collecting tax revenue with the 6B while hedging for that purchase without the 6B. If in the long run that is more palatable for the Village, then the vote should be to deny. Obviously there are other considerations, perceptions of being anti-business, etc. I think this will be the hard part to include in any parameters going forward as there will need to be subjectivity in creating a risk profile based on the property and location and not necessarily the investor.


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