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.
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.
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.
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