.

The Impact of Abt on Morton Grove's Budget

The first of five parts: Morton Grove's pre-recession, the loss of Abt.

In 2004, the Village of Morton Grove for the first time began charging for garbage collection, angering residents and sweeping in new Caucus trustee candidates in the April 2005 elections, who promised to try and change that and cut other newly implemented taxes.

But when they got a look at the financials, former trustee Georgianne Brunner said, "It was like 'What did I get myself into?'"

A full five years before the housing crash and recession kicked in everywhere else, the village was in the midst of a pre-recession of sorts, caused when Abt Electronics and Appliances pulled up stakes and moved to Glenview in 2002.

With that business went $1.6 million in sales tax revenue -- a full 30 percent of Morton Grove’s annual sales tax and 10 percent of its annual revenue.

“These other cities were fat and sassy and have had to learn to cut back,” Mayor Dan Staackmann said of the recent recession.

“We’ve been living with this so long [that] we knew what to do.”

The Abt episode – why it happened and what the village did about it, helps illustrates the challenges Morton Grove faces as it continues, almost 10 years later, to try to attract and retain businesses and to do more with less.

Why Abt left Morton Grove

Beginning as a mom and pop radio shop in Logan Square in 1936, Abt Electronics and Appliances has grown into a retail colossus.  According to co-owner Mike Abt, the company sold more than $250 million last year in televisions, cameras and refrigerators out of its new store on Milwaukee Avenue in Glenview.

Abt is the kind of retailer that small towns dream of luring to their community, and Staackmann said that he still hears from residents who blame the village for driving away Abt.

But the reason the company left is a structural problem – one that continues to restrain the village’s economic development efforts to this day.

Morton Grove’s 5.1 square-mile area* is triangulated on all sides by larger, more populous neighbors with bigger and more plentiful commercial spaces. Tilted heavily towards the residential, what commercial space Morton Grove does have tends to be small, like the mom-and-pop sized storefronts along Dempster Street.

Like many national retailers that are expanding, what Abt wanted was big-box. Very big box.

The store came to Morton Grove in 1988, having outgrown a store it had expanded “10 or 12” times in Niles, Abt said. That same year it began selling online at abt.com and the business grew exponentially. Fourteen years later, after two expansions at its Morton Grove store, Abt wanted to build a megastore.

“We were landlocked and we were bursting,” Abt said. “We needed more showroom space, more warehouse space, more parking – more everything.”

And Morton Grove didn't have anywhere to put it.

The largest available commercial lot in Morton Grove right now is 3.5 acres, accourding to Community Development Director John Said. The new Abt store and its 1,000-space parking lot covers 37 acres.

"We felt bad because we knew it would hurt," Abt said.

“They did everything they could,” he said of village officials, but they couldn’t create land, and that’s what we needed.”

Glenview, the northerly neighbor more than three times the size of Morton Grove, landed Abt and now it’s Glenview's largest single retailer. 

A Hole in the Budget

Abt left a substantial hole in Morton Grove’s budget, one the city filled in the first year with a one-time rebate of economic development money from Abt.

But going forward, the village needed to make up the revenue -- and fast -- so it increased taxes and user fees.

Among the more contentious things the village did was to begin charging people for trash collection, a service previously provided free of charge.

Morton Grove raised the sales tax .25 percent and created new gas and restaurant taxes. Ambulance fees also went up.

The response to Abt has become a blueprint for leaner budgets: Pare back services and add user fees and taxes when necessary.

On Tuesday, a bit of a breather: Real estate sales rescues the budget briefly, but overdue pension obligations and a second recession kick in.

*Correction: We originally wrote 5.1 acres, not square miles. 

Pat Craig April 26, 2011 at 08:28 PM
Sherwin; I certainly wouldn't be presumptuous enough to try to speak for Mayor Staackmann, he can speak for himself if he so chooses. If you see me as contradicting myself, you sir are blind ,or purposely failing to read what I wrote...and your repeating of something that is false doesn't make it true... just boring. Economics 101. To balance your budget you either cut expenses or raise income. 80% of governmental cost is labor and benefits to labor. Currently our municipal budget is being decimated by pension obligations, whereby soon we will be paying more to retirees than active employees. The goose that lays the golden eggs is about to expire. The question is; "What can be done?" Municipalities throughout the nation have cut essential services because they can no longer afford to pay for them, (there is a town in Michigan where the police department is closed after 6:00PM and on weekends). So far, luckily, Morton Grove has maintained essential services. You consistently say that services should be maintained, senior discounts and special treatment should be maintained and taxes should be lowered. Please share your magic twinkle dust as to just how these things can be done... it has to be magic... stuff j doesn't work that way in the real world.
sherwin dubren April 26, 2011 at 10:50 PM
I am not advocating reduction of essential services. You somehow connect the assistance to seniors as causing the problem. The village is still spending money on real estate deals and new water meters like it's business as usual. Giving Pequods a 100,000 dollar bonus to move a few blocks away is one example of a bad deal for us. Giving big tax breaks to Culvers to come into Morton Grove is again a no starter. Our limited land is to valuable to give special deals to businesses. Let's stop playing politics and fill some of the gap with an increase of property taxes. I know you think seniors should tighten their belts and grin and bear it, but they are the least able to survive without assistance. Social Security is frozen with no cost of living increase. The Illinois governor is threatening to remove Circuit Breaker and Illinois Cares Rx. That leaves many seniors with decisions about what food to buy vs. what prescriptions to take. I'm glad you are not in that position, but have some feelings for those that are.
sherwin dubren April 26, 2011 at 10:51 PM
I know our village government has made certain cuts, but I encourage them to look again at our budget and see if they can trim it back more. Certainly, stopping big grants to the Essex people would help. I always hear that some of this is TIF money, so we can freely spend it. I'm sorry, but that money belongs to the citizens of Morton Grove, and it should not be spent merely because it is available. When a TIF terminates, any left over funds are to be distributed to the village for improving infrastructure, etc. outside the TIF boundaries. The way we are spending money on both our TIF's. I doubt there will be anything left over. If our biggest problem is the pension funding, what is Mayor Staackmann and other mayors in Illinois doing to fix the problem. The police and fire people have strong lobbyists in Springfield and our legislators have to do the right thing and do what is best for all citizens.
Georgianne Brunner April 27, 2011 at 12:31 AM
Eric, The former Abt property is NOT part of the Waukegan Road TIF district. Go to the village website & view the map of the Waukegan Road TIF district to view the TIF boundaries.
Pat Craig April 27, 2011 at 12:35 AM
Sherwin; As you may or may not know, I too am on a fixed income, specifically social security. My service business died between my wife's illness and subsequent inability to help with clients and the crappy economy. Nevertheless, I don't think that just because I have attained a certain number of years on this planet that my neighbors have an obligation to subsidize my existence... apparently you believe that yours do have that obligation to subsidize you. We have a difference of opinion on that. I do not know what your profession was when you were working, but from your lack of grasp of basic economics, it is obvious that you have never run a business or made a payroll. Neither, apparently, do you understand the way that TIF's work and have worked for the past 10-15 years or more. While I am no fan of TIFs, they are a fact of municipal economic development. In another thread you were complaining that Oberweis went to Skokie and that Morton Grove "missed out". Oberweis's Skokie venture is, in part, being underwritten by TIF funds in Skokie. As much as you want to put your head in the sand over TIF assistance to businesses, that's just the way it is in the real world. You admit that the village has made cuts, you state you do not want to cut services, yet you say that the village should cut more. TIF funds, BY LAW, cannot be used for anything but TIF district projects, to suggest otherwise is uninformed and foolish. your repeating of cockamaimie schemes is rubbish.
Dan Staackmann April 27, 2011 at 01:29 AM
What one says & stands for is the only true way you are judged in life. The only thing you really leave behind is your name & reputation. Good or bad, it is up to you how to leave your mark on this world. I want to clear up some tainted facts. Mr Dubren states that "Staackmann voted to approve this increase." He is referring to raising taxes 28% earlier in his comments. I would like to clarify this. There was never a singular 28% tax vote. There was a tax increase of 20% in the 2006 budget. I did not cast a vote to pass the increase or the budget. Even with that increase, the village did not pay the full amount required that year to fund the pensions. The village has only fully funded the pension since 2007. There was a 5% tax increase in the 2007 budget. I voted against that increase & the budget. All of this is on the record; it is not a disputed fact. Mr Dubren further stated "like you, I want to see the truth coming forward." So do I Mr Dubren. I wish you would check the facts first before you mislead the public to your liking. Mr Dubren, you ask what is being done about pensions. I, & all the Mayors, are doing what we can for pension reform & any legislation that affects local municipalities, but we need help from residents who should call their legislators & tell them their concerns. We can build a better tomorrow if we all start working together instead of just finding fault.
sherwin dubren April 27, 2011 at 02:21 AM
Dan, My memory was not accurate on your voting, but I do remember Di Maria actually bringing up the subject of the pension funds and recommending that the village increase the property tax as required to satisfy the budget requirements. Krier raising the tax 28 percent probably cost him the mayorship, but I don't fault him or his party for getting into that predicament. Since you didn't vote for that tax increase, I am curious what alternative ideas you had to solve the pension fund deficit. As far as finding faults, they are the first step to finding solutions. We should not be burying our problems.
sherwin dubren April 27, 2011 at 02:24 AM
Pat, If you read my post carefully, you would have realized that I was talking about unspent funds left over when a TIF closes. At that time, these funds can be used for other purposes outside the boundaries of the TIF. Before you cast dispersions on my knowledge of TIF's, please read more carefully what I am saying.
Pat Craig April 27, 2011 at 02:37 AM
Sherwin; I may cast aspersions, doubts or perhaps even a Hawaiian Wiggler if I'm fishing for bass, but I have not once in my life cast one single dispersion.
sherwin dubren April 27, 2011 at 03:19 AM
Pat, Speaking of wigglers, I guess I left you enough room to wiggle out of your previous posting.
Pat Craig April 27, 2011 at 02:06 PM
Sherwin you take yourself too seriously... although as time goes by nobody else does. Unfortunately, like a small yappy dog, you keep barking and barking over nothing. It's annoying but unimportant in the scheme of things. Your inability to accept fact and offer meaningful comment and suggestions have become tiresome. You may have the last inane word as responding to you is pointless.
sherwin dubren April 27, 2011 at 05:30 PM
The only people that seem upset with my postings are Action People like Pat Kansoer. They are only annoying to self proclaimed pundits like Pat. I will admit to mistakes, when they occur, but that doesn't mean I have to censure myself. His longwinded speeches at the village meetings were long and boring and his postings are an attempt to demean others who do not fit into his view of the world. My goals are not to change Pat's mind or sway him from his devotion to the Action Party. He would have the village residents go into a state of suspension, ignoring what is going on around them, and believing all the hype that we get from the current Action Party. His kind of thinking will not improve the village, if we continue on the same course of action that we have seen in the past coming from this Action Party. The Action Party would have us forget their past mistakes and policies, the later of which I think have not changed. For Pat, if he doesn't like my postings, I would ask him not read them, and not to respond. His nasty remarks only point out his lack of respect for other people's opinions.
Dan Staackmann April 27, 2011 at 06:15 PM
Mr. Dubren you seem to have alot of comments & answers for what needs to be done to inprove the business climate in Morton Grove. would you be willing to help your Village by serving on the Economic Development Commission?
David Lewis April 27, 2011 at 06:35 PM
Mr. Dubren, I am upset with your postings. Your constant negativity about the Village of Morton Grove's elected officials and village administrators in addition to your attacks on responsible and engaged citizens like Pat Kansoer has become monotonous. I look forward to reading the Patch every day but dread reading your endless criticisms about the Village. Rather than spewing your anger on a daily basis I suggest you do what I did...step out from behind your computer and join a commission. Or, run for political office if you feel you can offer a viable alternative. The Village of Morton Grove is full of wonderful residents, several of whom I am fortunate to work with on the EDC. We are unpaid volunteers who donate our time and individual talents to promoting our business community. Your comment about our Economic Development Director is entirely unfounded as well. John Said is one of the most capable professionals I have ever worked with and what he has accomplished for the Village in less than one year's time is nothing short of amazing, especially when considering the horrible state of our nation's economy and this seemingly endless recession. I hope you will consider accepting my advice and find other opportunities within Morton Grove to positively channel your energies rather than using Patch as a source for venting your frustrations. Good luck.
sherwin dubren April 27, 2011 at 07:26 PM
Mr. Lewis, You and Mr. Kansoer feel that everything that is not in line with your philosophy is monotonous and disturbing. All my posts have my name attached, so I suggest if they bother you, DONT READ THEM. I am not spewing nor am I angry, just not happy with the way things have been going with the village. I lost my rosy colored glasses, so I can't gloss over problems in the village. I think we can learn from past mistakes and sometimes need to be reminded about them, especially since I see them being repeated now. You think the Economic Developement people, including it's director is doing a good job. I don't think so, even taking into account the difficult economic times.
Terri Cousar April 27, 2011 at 07:36 PM
I agree with Mr. Lewis that Mr. Dubren should join a Village Commission and maybe come up with a constructive idea or two, instead of constant berating and negativity. It's way too easy in life to gripe and point fingers. Mayor Staackmann is right -- We can build a better tomorrow if we all start working together instead of just finding fault.
David Lewis April 27, 2011 at 07:50 PM
Ms. Cousar, There are 16 committees and commissions available to Mr. Dubren. I suggest he choose one (including mine - we have one opening) and apply for inclusion. The same offer holds true for any Morton Grove resident who would like to serve our Village by joining a commission or committee.
Mark V. Matz April 27, 2011 at 08:09 PM
Once again Mr. Dubren seems to fabricate his own facts when it pleases him, a trend that many readers have come to experience the more he rambles on. Mr. Kansoer is not, nor has he ever been, a member of the Action Party. Many in the village will recall that he actively worked against it in past elections with Mr. Dubren. If he shows support for it now, it is most likely because he believes it is taking Morton Grove in the right direction during challenging times (as the majority of voters in the recent election must have felt too). We can't bring back the past, only learn its lessons as we look ahead. To constantly complain about past administrations and link them to new people who are volunteering their time to improve the village accomplishes little to nothing. It is every citizen's right to express their opinions, but a constant barrage of mis-information and rhetoric designed not to heal, but divide, will not bring us needed solutions. Also, Mr. Dubren should look in the mirror before accusing others of making nasty remarks and showing a lack of respect for others' opinions but his own. He had his chance to convince voters of his "qualifications and vision", but only about 500 people voted for him for him when he ran for office years ago. I wonder how many of these citizens would vote for him today - knowing just how little in the way of substantive plans,volunteer time or positive energy he offers our community?
sherwin dubren April 27, 2011 at 08:19 PM
Dan, I appreciate the offer to serve on the Economic Develpement Commission. However, I'm not ready to jump into that in light of past experiences and observations about the effectivity of these commissions. To remind you and others, I did serve on the Natural Resources Commission and was not happy with the effectivity of that group. Although we worked hard to propose changes to the tree ordinances, the most meaningful ones about trees on private property were sluffed off. The head of that commission quit along with myself when we felt all our hard work was for naught. I attended at least one of the Economic Developement Meetings and was not impressed with their proceedings. It seemed to be mostly a lot of bureacratic paper shuffling going nowhere. Before I accept any commission with them, I would like to attend one of their meetings to see if things have changed. One thing for sure, if I join this commission, I am not going to stop my letters and postings of my concerns about the direction the village is heading. I just hope everyone understands that. When is the next meeting of the Economic Development Commission and where is it held?
sherwin dubren April 27, 2011 at 08:26 PM
Well, I see Mr. Matz is back from vacation. Although I received 500 votes, there was a small turnout that election, so this represented almost 20 percent of the votes. I think for a start up party on a very small budget, I did quite well. OK, Pat is just an honorary member of the Action Party. Mr. Matz wants us to believe the Action Party has re-created itself, but I don't think so. It has the same policies as has had for the past 20 years.
Debi Scholtes April 27, 2011 at 08:30 PM
I want to voice the "little" guy's side... My take on Abt's leaving was the CONSTANT barage of complaints posted in the newspaper about the noise and the exhaust fumes and the traffic and,,,and,,,and from Abt's residential neighbors. Abt had most likely been there when those resident's bought those houses. Those complaints are equivalent of complaining about noise when buying a house near the airport. Abt had options...They could have warehoused across the street, or off site entirely. Now our Village has Culver's looking at our location...what do we hear again? We don't want the traffic,we don't want the noise. Look people- PICK ONE!!!! You can NOT complain about the necessities of thriving business WHILE you complain about paying higher taxes because we have a scrawny business revenue base. How many of you make it a point to shop here in Morton Grove? The politicians can bicker all they want as you see above...but the bottom line is...the population of Morton Grove is responsible for either helping our businesses to succeed and thrive..or PAY!
David Lewis April 27, 2011 at 08:38 PM
Ms. Scholtes, Your comments are much appreciated - I completely agree with you. By the way, Culver's is not "currently looking at our location"...in fact, it is a done deal. We anticipate the new Culver's will be open sometime this fall.
Mark V. Matz April 27, 2011 at 09:24 PM
Perhaps it's time for a new battery for Mr. Dubren's calculator? He claims his 500 votes (actually 458 to be exact) represented 20% of a "small turnout"? In fact, when you check the Cook County voter records for the 2007 Morton Grove Trustee Election, there were 8547 votes cast and it shows Mr. D's 458 as just 5.36% (by the way, Dan Staackmann who ran and was elected received 1746 or 20.43%). Just for the record, the Action Party doesn't have honorary members, but it truly appreciates all who support our elected officials in their work to help keep Morton Grove moving forward.
Pat Craig April 27, 2011 at 10:27 PM
Mr. Lewis, I hope your words come to fruition. In the time that we have heard that "Culver's is coming" we could have birthed an elephant. I understand that there have been "hiccups" along the way, but perhaps some type of reassurance from the folks at Culver's that they are, indeed, coming to Morton Grove would soothe my jones for a butterburger.
David Lewis April 27, 2011 at 10:36 PM
Mr. Kansoer, The demolition of the original bank building is currently underway. Once the new foundation is in place these types of "pre-fab" buildings go up rather quickly. Your butterburger would be nicely followed up by a serving of Culver's famous custard.
sherwin dubren April 28, 2011 at 01:11 AM
To answer Mr. Matz, I was looking at all three Reform Candidates when I claimed almost 20 % of the vote. I personally only had 5.75% of the votes, but considering the small size of our start-up party, I think it was a respectable amount compared to the forerunner Staackmann who received 20.08 percent of the votes.
Dan Staackmann April 28, 2011 at 12:03 PM
Agreed Mr Dubren. There is no control put on any commission or committee member. I aked that no chairman of a commission or committee be on the board of the Action Party this also goes for elected officals. This is in keeping with the new Ethics Ordinance established last year. The commission & committees are just one more check & balance to make governmet more effective & accountable. I also want any change that will make Morton Grove better but, it takes time & thought. It also takes people willing to stay the course not give up when it doesn't go their way. If you really want to make things better why not change them from the inside were you have a real forum to particapate.
Mark V. Matz April 28, 2011 at 02:13 PM
In the April 17, 2007 Elections, Cook County records showed registered voters in the entire county of 1,371,803 and a turnout 236,050 (17.21%). In Morton Grove, Mr. Dubren individually had 458 votes or 5.36% (not 5.75%). All three candidates running on his Reform Party ticket achieved 1356 votes or 15.86% (not really all that close to "almost 20%"). If you add all three Action Party candidates' votes, that total is 4854 or 56.79% with Dan Staackmann having 1746 votes (20.43%). I just wanted to make sure we're all comparing apples to apples. All this information is readily available on the Cook County Clerk's website, under "Election Results" for Consolidated Election 2007.
sherwin dubren April 28, 2011 at 05:25 PM
I don't consider myself or the chairman as giving up too soon. We had worked on a new tree ordinance for some time and were disappointed when most of it was ignored by the village board. It was not a trivial issue that caused us to leave. I am not saying that residents should not serve on these committees, but be aware that not all of their recommendations will be implemented by the village government. Their function is purely advisory. In my case, I have to decide if participation in the Economic Development Committee would be the most effective use of my time.
Noel May 13, 2011 at 05:07 PM
Wow.. nice article Carrie! It's nice that residents of Morton Grove now have an online outlet to voice their opinions and concerns. Losing ABT in 2002 was definitely a financial hit and maybe the Action Party could have done more to entice them to stay. Ultimately it was a business decision for ABT that I'm sure they have no regrets about doing. Our city as well as many other municipalities around the country are having financial difficulties. Tough decisions will have to be made and no one is going to be happy about it. I completely agree with Mr. Staackmann that we need to look ahead for solutions and work together. Re-hashing old arguments and finger pointing will not move us forward. How about talking about the struggling business (think Dempster construction) that are still operating in Morton Grove that could use our support.

Boards

More »
Got a question? Something on your mind? Talk to your community, directly.
Note Article
Just a short thought to get the word out quickly about anything in your neighborhood.
Share something with your neighbors.What's on your mind?What's on your mind?Make an announcement, speak your mind, or sell somethingPost something