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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. 

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.

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