CRYSTAL LAKE – City officials made sweeping changes to economic incentives offered to retailers, expanding one program’s thresholds and eliminating another.
The City Council last week changed parameters in its Enhanced Sales Tax and Matching Grant incentive programs and did away with the Façade and Commercial Tenant Improvement grant.
The Enhances Sales Tax Incentive Program, or ESTIP, has been offered to high sales, tax-generating businesses – most recently car dealerships looking to move or expand. The program allows an eligible business to recoup half of the sales taxes generated up to $1 million.
The council expanded that threshold to a minimum $5 million generated by new or existing dealers and, at the same time, opened the program to all retailers with a minimum of $3 million in taxable sales.
Previously, other retailers were eligible only for the city’s Existing Retailer Matching Grant program, no matter their size or amount of sales-tax revenue. That program also was designed for businesses looking to expand.
“[Businesses] that generate more than $7.5 million in annual sales have expressed interest in our ESTIP program for projects over $150,000 but less than $1 million,” city officials wrote in a memo. “Through our existing programs, the city would only be able to provide up to $5,000 in matching grant funding.”
But with the changes, those retailers now are eligible for grants of $5,000 for businesses that bring in $150,000 to $2.49 million a year in sales tax, to $20,000 for those that generate $7.5 million in taxable sales.
“We’ll never have a program that addresses every different retailer out there,” said Michelle Rentzsch, the city’s director of planning and economic development. “This works to make it a little more equitable and acknowledges a level of contribution.”
At the same time, the city removed the Façade and Commercial Tenant Improvement grant program. It has not been widely used because a prevailing-wage requirement dilutes any benefit for the grant recipient, Rentzsch said.
“There’s a state requirement that if public funds are used for improvements that prevailing wage must be paid,” she said. “You’ll find a lot of small businesses will do some work themselves, and that’s in conflict. If they have to pay to prevailing wage, the numbers don’t add up.”