Crystal Lake passes stimulus package
CRYSTAL LAKE – Consumers and retailers could get a boost from a $600,000 package of programs designed to stimulate the local economy.
The Crystal Lake City Council approved the four economic development programs at a meeting Tuesday night.
“This is an investment in the future of Crystal Lake,” Mayor Aaron Shepley said. “We will get more than a dollar-for-dollar return.”
The package includes an Enhanced Sales Tax Incentive Program that allows some businesses to offset the cost of improvements and job creation with sales tax dollars. It also establishes targeted development zones along Route 14 and Route 31, a $250,000 facade improvement program, and new shopping incentives to lure consumers.
Hurt by increased competition and the recession, sales tax revenue has dropped from $11.3 million in 2006 to $10.5 million in 2009. From 2008 to 2009, Crystal Lake saw a 3.36 percent decrease in sales tax revenue, according to city records. The new measures are meant to stave off further losses and generate new funds.
Under the Enhanced Sales Tax Incentive Program, retailers that produce at least $10,000 in sales taxes could agree on a base sales tax figure with the city. Money brought in above that amount could be used to repay the business for public improvements, expansion, redevelopment and marketing. The base sales tax rate would not be lower than the sales tax collected from the business or property in the last 36 months. The contracts could last for up to 10 years.
It also could open up a stream of sales tax income to businesses moving to Crystal Lake to neutralize the cost of redevelopment, improvements or relocation.
Only increases in sales tax would be shared with retailers; the Enhanced Sales Tax Incentive Program does not provide any new funding from existing revenues. The City Council would have to approve each Enhanced Sales Tax Incentive Program contract.
“This is a very, very creative program,” Councilman Jeffrey Thorsen said. “We are taking a proactive approach.”
Not everyone on the City Council agreed. Some were hesitant to spend money on the programs.
“I think we are biting off more than we can chew,” Councilman Ralph Dawson said. “There has to be a limit.”
The Targeted Development Zones approved by the City Council along Route 14 and Route 31 are aimed at encouraging redevelopment along those corridors. Businesses within the zones would be allowed to waive half of their city review, permit and inspection fees for commercial improvements valued at more than $250,000.
Further redevelopment is encouraged with the $250,000 facade and tenant improvement program, which makes up to $5,000 in matching grants available to businesses for exterior renovation. Funding for the program comes from the city’s reserve fund.
“I think we need to stimulate redevelopment as much as possible,” Shepley said.
By far the most expensive part of the stimulus package, the shopping incentive program could be a boon for both consumers and retailers.
Modeled after the I Shop Crystal Lake campaign started in 2008, it would be a hook for area consumers to spend their money in the city.
In addition to repeating last year’s holiday shopping program that rewarded consumers who spent $300 in Crystal Lake with $30 gift certificates, this year’s program would include gift certificate incentives for back-to-school shopping of $300 and car purchases of more than $10,000.
The gift certificates, worth up to $250, can be used at any retail outlet in Crystal Lake.
The City Council approved $350,000 for the incentive programs from a combination of budgeted and reserve funds.
Councilman Brett Hopkins called the shopping incentive program a “shot in the arm” for the local economy.
“These are all tools in our arsenal that give us an advantage,” he said.