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Arguments Erupt Over Proposed Golf Mill Tax

Seven professionals urged the Niles Village Board to raise sales tax at Golf Mill, but Kohl's representative, citizens spoke against it.

 

Emotions flared Tuesday during a public hearing on whether to raise the sales tax at Golf Mill Shopping Center by 0.25 percent (25 cents on $100).

Proponents of the tax, mostly mall management and consultants, said the revenue received from the tax would rejuvenate the mall, allow it to thrive against competing malls and provide the sales tax revenue needed to keep Niles' residents' property taxes relatively low.

Opponents said the proposed tax would drive shoppers to other towns with lower sales taxes. One complained mall management was asking the public to pick up the tab for upkeep that she felt the mall should have made over the years.

Earlier:

"I don't mind public-private partnerships to reenergize things, but this is for deferred maintenance," said Pat Argyrakis, a citizen who spoke at the hearing.

Anchor tenants disagree

Even the mall's anchor tenants do not agree on the tax hike and mall plan.

A Sears executive said Sears favors it to prevent Golf Mill from going into decline; a Kohl's executive spoke against it, saying shoppers would not come to Kohl's if they could pay less tax at Toys R Us and Marshalls across the street. Mike Williams, the mall's general manager, said other anchors have not commented. However, more than a dozen owners of small businesses at the mall came to the meeting to show support for the plan.

Trustees had many questions

Trustee Louella Preston floated the idea of having the village hire its own independent consultant to advise it on the complicated issue.

Trustee Rosemary Palicki asked who owned Golf Mill, and Williams said the Cuneo family has owned it privately for 50 years.

"Looking at (the document which details the mall's condition and the plan to reinvent it),  it’s a predominance of unsafe conditions. Why has this been allowed to develop over a period of 50 years?" she queried.

Williams responded that the mall is restricted in how much stormwater it can send down to the sewer system, which is undersized.

Trustee Andrew Przybylo asked if the mall had figured the fact it was probably going to lose shoppers into its sales projections.

If the trustees vote to permit the Golf Mill sales tax, it could come on top of the to fund flood-prevention efforts.

The one percent?

Joe Makula, a citizen who served on a branch of the village's Ethics Committee, during the public comment portion of the meeting.

"This is basically taking from the 99 percent of the population and giving to the one percent," he said. If the mall doesn't have the money to fund its own improvements, it should be sold to other management who could possibly do a better job, he added.

Consultants made points in favor of tax

The hearing started with consultants making Golf Mill's case for asking the village to raise the sales tax. , to give it legal authority to collect the extra sales tax only at Golf Mill and funnel it to the mall.

Points the consultants made include:

  • Enacting the business district (with the 0.25 percent sales tax) would keep property taxes for Niles residents lower, according to Dan Gardner, a principal with Houseal Lavigne Associates, the consulting firm which prepared the 2030 Niles Comprehensive Plan.
  • Sears favors the sales tax/business district plan, said Sherry Devoe, real estate strategist with Sears Holdings Corp.
  •  "In most places where there’s active revelopment, there’s a partnership between malls, anchors and governments," Devoe explained, saying it's virtually impossible for a declining mall to get (bank) financing.
  • Wendell Hollan, who specializes in the retail industry in the commercial real estate field for CB Richard Ellis, and who has renegotiated tenant leases at Golf Mill, said the mall has to perpetually reinvent itself to fend off competition from Old Orchard, The Glen, Randhurst Village and the
  • If the tax is not passed, "Golf Mill will ...ultimately fail as a significant ecnomic engine for the village of Niles," Hollan said.

Mall would get high-tax reputation

Opponents, however, pointed to the increased sales tax as creating competitive disadvantage for stores in Golf Mill.

"I ...compete with Toys R Us and Marshalls across the street. And I now must charge more," said Jeffrey Poole, manager of real estate development for Kohl's. 

"Consumers today are extremely savvy. They go into stores with cell phones and check prices. A mall gets a reputation in terms of higher costs."

He also suggested that industry practice for malls includes setting aside money for refurbishment every year, and said some of the things included in Golf Mill's plan are being paid for by tenants and grants, not the mall itself.

"I just think it needs to be drilled down," he stated.

Other points proponents of the tax increase made include:

  • Mall ownership is investing $15 million in redevelopment, in addition to what the sales tax revenues provide, said Gardner, of Houseal Lavigne.
  • The mall's redevelopment plan meshes with the Comprehensive Plan, in terms of transit improvements, stormwater improvements, and creating a more attractive Milwaukee Avenue, said John Houseal, also of Houseal Lavigne.
  • The mall's plan would increase stormwater holding capacity, to prevent flooding, by 50 percent, according to a representative from Gewalt Hamilton, an engineering consultant.

After the hearing ended, a few proponents and opponents in the audience argued with each other.

"I guarantee if they pass this sales tax, I'l tell as many people as possible when they're all up for re-election," said Argyrakis.

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Pat Tackett March 02, 2012 at 05:48 PM
As Mr. Poole aptly stated - shoppers have choices - and in today's economic times, shoppers can and do look for the best value. Golf Mill's General Manager believes that shoppers are too stupid to even notice a tax increase this small - but not only is he underestimating the public,he is not factoring in the additional 0.25% sales tax increase that goes into effect later this year for flood control - which may also benefit Golf Mill. I notice this type of increase and I believe most shoppers do. Unfortunately there will be shoppers such as seniors, disabled or others who must rely on the Niles bus or public transportation to get to a mall - and that may make Golf Mill their only option These shoppers may be those on fixed or limited incomes. It is truly unfair to these types of folks. My outrage is for them. However, another point made by Mr. Poole, and stated in a NY Times article last July regarding Randhurst - shopping today is not only for necessity but has moved to "a shopping/entertainment experience" which Golf Mill is and has not been for years. By passing this tax, unfortunately Golf Mill will not get a negative image - the Village will -- all to allow a private concern to make improvements it should have long ago and increase its worth on the backs of shoppers.

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