A Tale of Two Properties: How Maywood’s High Taxes Block Business

Wednesday, September 13, 2017 || By Wayne Beals || OPINION || @maywoodnews 

Featured image: A building at 6800 Roosevelt Road in Oak Park, left, and a similar property at 904 South 5th Avenue in Maywood. | Google Earth 

So there was a big community meeting regarding a very reputable nonprofit developer’s proposal to build a brand new 64-unit, 5-story, mixed-use property on 5th Avenue that would feature first-floor commercial space.

Many of Maywood’s most involved residents turned out to hear the pitch with a mix of anxiety and excitement. Many were very vocal about the village’s need for a grocer, which they hoped the nonprofit would attract to this proposed building’s first-floor space.

After some dialogue about other needs and concerns, the elephant walked into the room and sat in a front row seat — hello property taxes, good of you to make it. ‘Could this developer tame the village’s heavy property tax burden,’ many residents wondered?

An official with the nonprofit said that they weren’t sure about the amount of taxes they would pay, but that in Oak Park, where they operate a mixed-use housing development, they pay about $80,000 per year in property taxes.

As I sat in the audience, I could only stare in befuddlement. How could a 64-unit development with an enormous lower level retail space pay only $80,000 per year in property taxes?

I doubted whether the developer clearly understood the main challenge blocking most economic development in Maywood. After the meeting, I posted my thoughts about the meeting on Facebook — which in turn, prompted a range of responses from Maywood residents. From the exchange, I discovered that many residents don’t understand the village’s main development problem.

I hope the following is a decent primer for those Maywoodians who may not really understand the basic anatomy of our commercial development is simply due to the village’s high commercial tax rate.

‘Oh, what else is new,’ you may say. Taxes are high everywhere in Cook County — from Forest Park to Oak Park and beyond. Yes, they are, but Maywood’s taxes are even higher given the value of the real estate here.

Take, for example, a beautiful mixed-use building located at 904 South 5th Avenue, right in the heart of what’s perhaps the village’s most important commercial corridor.

This building has been on the market since 2014, and was originally offered for $189,000. It’s brick, two stories and 3,800 square feet. At today’s interest rates, the price seems like a bargain. At a 5.5 percent interest rate (reflective of today’s rates), with 25 percent down, it would cost an operator only $804.84 per month to own.

This seems affordable for a small business owner who would, for instance, live above the shop, or perhaps an investor looking to rent both the commercial first-floor space and the residential second-floor space.

Perspectives photo_1

904 South 5th Avenue in Maywood. | Google Earth

Don’t get too excited.

It’s important to note that the real estate taxes on this building are currently $9,076 per year. So, you’d have to recalculate the monthly ownership costs. With the property tax payments factored in, they balloon to $1,561.17 per month.

With this hard reality in mind, a prospective business owner or investor is apt to consider other options. By the way, 904 South 5th Avenue is still currently on the market — three years later. It’s listed for $60,000 and the tax bill is still 9,076.00, 15 percent of its value.

Compare this to 6800 Roosevelt Road in Oak Park. A beautiful brick mixed-use property on a corner lot, remarkably similar to 904 South 5th Avenue in Maywood. The Oak Park property is 3,083 square feet and located in a booming area undergoing substantial redevelopment on the corner of Oak Park Ave and Roosevelt Road.

It’s offered for $375,000.00, with a tax bill of $5,390. The monthly payment on this beautiful property, including taxes, is only $2,046.07.

Perspectives photo_2_bw

6800 Roosevelt Road in Oak Park. | Google Earth

So, what’s the point? The point is that Maywood and Maywoodians need to make a conscious effort to attract businesses to our town. These businesses will bring jobs and sales tax revenues. They’ll also put our commercial land back to work and back on the tax rolls.

The only way this is going to happen is if we carefully and strategically create a win-win incentive for businesses and for the village of Maywood. Until we reform our commercial property tax structure, we will have to wait to realize the types of developments we all hope for in Maywood.

Our citizens have the spending power and the desire to support local business, we just need a way to get those businesses to locate here. It starts with a conversation about how we prevent our taxes from being a disincentive to locate a business in Maywood.

If those of you wonder why Aldi isn’t here anymore, consider this. The tax bill on their store on Madison Street was $290,000 per year!

When Aldi located in the village 13 years ago, they were given an incentive package that included some property tax rebates, which made it profitable for them to operate here. They still contributed heavily to the tax rolls, just at a reduced rate compared to most commercial properties.

In exchange they brought jobs, a valuable amenity in the form of a grocer and sales taxes. Those rebates expired and now they’re gone. Also gone is a grocery store, local jobs and sales tax revenues.

Now, the village has to find someone else who wants to operate a commercial property with a $290,000 tax bill.

It’s my sincerest hope that those of you reading this voice your frustration to Maywood’s trustees and mayor, as well as county officials, such as First District Cook County Commissioner Richard Boykin.

They have the power and authority to change things and we need change. I would love for that nonprofit developer to bring investment to our town. We need to consider their incentives so that we keep the process moving and bring us that grocery store! VFP

Wayne Beals is a real estate broker and co-founder of the real estate brokerage firm Beals & Associates. He also has experience as a general contractor, landlord and developer. He lives in Maywood with his wife and three children. 

F E A T U R E  E V E N T

Bellwood chamber of commerce

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9 thoughts on “A Tale of Two Properties: How Maywood’s High Taxes Block Business”

  1. I thank you so much for your comments. You seem so knowledgeable. My daughter just moved to this town and has a beautiful bungalow with ridiculous taxes. Thank you for explaining this to us as we didn’t fully understand why Aldi left. Thank you, thank you!

  2. I think you need to investigate the reasons why the tax rate is high. Perhaps the 150+ churches and the other non-profits that own real estate and don’t pay taxes night be a contributing factor. The tax loss has to be made up somewhere.

    1. Indeed the churchs are a BIG problem with the tax base; a few years back one of them bought up a bunch of tax paying houses for more parking, at least an entire blocks worth. As someone else also pointed out–how active are they other than Sunday and what do they give back to the community? hmmmm….thats what I thought. All tax exempt.

      Another big elephant in the room regarding taxes that village management seems to always dodge is the conversion of so many homes into multi unit residences while still paying single family home tax rates. A good portion of it is from absentee landlords that pack 3 or more families into one house (with tons of kids) and some others that move in a bunch of in-laws with their own families, again with lots of kids. No is is trying to be anti kid, but if you put this in perspective that school is about $10-11000/child/year, and now all of a sudden you 8, 10 or 12 kids from 3 different families in a house–do the math: $80,000-120,000 per house in school costs yet the house is still paying only $6-8000 in property tax. If the county wants to allow that OK, but then they better find a way other than property taxes to fund schools.
      As we also know absentee landlords take minimal care of the property, at best, so what does that do to he rest of our property values?

  3. If you give to big of incentive, like not paying taxes for 13 years, it only hurt the village. Aldi saved all they tax money an build a much larger Aldi in broadview. Aldi has not provided any jobs for the people in the village, they only had 3 cash registers an a payroll for 6 people. We need much bigger business in town with less incentives, but more jobs.

    1. This has a lot to do with the mis-management of the village. New leadership hasn’t changed anything. More than 15 years ago, i tried to purchase a vacant to build a house. For two years, i filed applications repeatedly and was always rejected. Found out later as i purchased an older home in Maywood that it was purchased someone with other connections. This village has shown over the years, that they have no interest in increasing their tax dollars through commercial ventures and providing better services.

      I have discussed similar frustrations with neighbors over the years and several of them have sold their homes in the last 4-5 years due to no upgrades in the city. Unfortunately, as a retired individual i cannot afford to move that easily otherwise i would have done the same.

      City Planning requires long term thinking and creating a detailed strategic approach to upgrade the city development taking small steps especially where there are so many boarded homes. Pretty much all the inner streets are crumbling, the city finally fixed the corner of Quincy & 5th. No one talks about the rehab of 24 apartment building on 5th avenue and these projects get approved. Based on the link below each apartment cost over $300,000 for rehab.The folks running the system in this village for decades have been milking it for far too long. .

      http://www.chicagotribune.com/news/watchdog/ct-most-expensive-rehab-project-met-20150821-story.html

      What about the Saggy Pants Ordinance? Finally something to reduce this degrading behavior and uphold public decency. However, i see police officers sitting in their cars never approaching these kids. it would be interesting to see how many tickets have been issued in the last two years.

      As one of my good friends says, “The Rot starts from the Top”.

      Zack

      1. Becarful with that saggy pants law. The village has alot of civil lawsuites, I can remember a lawsuit was just settled for a guy taking a picture of the police station.

  4. Reading all these comments, I want to really share my opinion. Me driving in the village of Maywood and seeing so many vacant lots, boarded up homes, lack of community involvement, and so many churches…I found out that some residents in Maywood not only cares, but…it is years of economic disinvestment and trustees that are not accountable to the tax payers.

    I have been typing this on the website for almost two years, that residents in Maywood need to let their voice be heard, by attending the town hall meetings and address their issues with the public comment. Also, do a thorough research of the trustees and vote. It’s devastating that during the last local election that 2,000+ residents voted out of the population of 15,000+. I don’t know what to say in an abstract way, but that is the only way that the residents of Maywood will see progressive changes. I am done commenting!

  5. A few years ago while planning a funeral at Corbins funeral home me and a friend had a conversation with the staff. They clearly stated that they would be closing the location based ONLY on the property taxes. (They have a very busy Westside Chicago location on Madison) Sure enough they’re gone.

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