Maywood Company Seeks Tax Break That Could Shave $1.4M Off 10-Year Bill

Friday, September 7, 2018 || By Michael Romain || @maywoodnews 

Featured image: National Cycle in Maywood, which is looking to secure a tax break so that it can expand its footprint and shore up its finances. | Google Maps 

One of Maywood’s oldest businesses came before the village’s Board of Trustees earlier this month to ask for a significant tax break as it experiences turbulent market conditions and a change in its financial fortunes amid plans to expand its operations.

National Cycle Inc., a motorcycle windshield manufacturer located at 2200 S. Maywood Dr. in Maywood, had earlier this year gotten zoning approval to build a roughly 28,000-square foot addition near its current facility.

The construction of the additional facility was supposed to begin this month, but those plans have been put on hold due to a large bid that fell through, National Cycle representatives said during a regular board meeting on Aug. 4.

“The situation that occurred with the expansion was out of our control,” said Patrick Miguel, a National Cycle representative, during Tuesday’s board meeting. “We had acquired a bid with a world-leading … supplier I won’t name, but that bid fell through at the last possible moment.”

Miguel was before board members requesting that they sign off on a Cook County Sustainable Emergency Relief Class 6b property tax incentive, also known as a Class 6b SER. As he made his presentation, around two dozen National Cycle employees sat in the audience.

The tax break only applies to companies located in the same facility for 10 years, operate in property that is used for industrial purposes and shows evidence of at least three of 13 “factors of blight.”

The company must also provide a detailed explanation and financial analysis showing why the tax break is “necessary for the company to maintain operations at its current location,” among other criteria, according to a summary of the financial incentive provided by the county.

A resolution passed by the village board is also required in order for companies to secure the Class 6b SER tax incentive.

According to financial projections provided by National Cycle, the company paid $226,201 in property taxes in 2017. A Class 6b SER tax incentive would have reduced that tax bill by 60 percent, to $90,481.

If given the tax break, National Cycle could see $135,720 shaved off of its property tax bill each year for 10 years, from 2018 through 2027 — amounting to $1,357,000 million in savings to the company during that time period.

Miguel said that National Cycle needs the tax break in order to continue with its plans to expand its manufacturing operation and in order to stay in Maywood. The company has operated in Maywood for 82 years and employs around 150 people, roughly 50 of whom live in the village, representatives said.

National Cycle projections

A chart showing the projected cost savings to National Cycle, and revenue loss to the village, if the company is granted a Class 6b SER tax incentive. | National Cycle 

Cook County Commissioner Richard Boykin (1st) attended the board meeting to offer his support for National Cycle.

“Economic development is very important,” Boykin said. “I’ve been to National Cycle and I know what they do. They’re good people and they do great work. The county fully supports their application for [the Class 6n SER incentive.”

But some residents and village officials wrestled with the idea of giving up that much property tax revenue.

“If we approve this particular request, what’s going to happen is the residents will have to pick up that difference,” said Maywood Village Manager Willie Norfleet, Jr.

Since Maywood collects 58 percent of that property tax revenue (the other portion goes to other taxing bodies, such as the library and schools), those savings to National Cycle could translate into around $787,000 in lost tax revenue for the village over the course of a decade, Norfleet said.

Norfleet added that the village had already granted National Cycle a Class 6b tax incentive related to its proposed expansion.

“The board has approved a reduction in taxes on the proposed new addition without any problem,” Norfleet said. “What has occurred is [the company has] asked for a reduction on [the] entire [existing facility].”

Maywood Trustee Kimyada Wellington said that the village “showed good favor when we approved the 6b for the expansion,” adding that the company should understand “the status of the village. We don’t have any money and we’re putting this back on the residents.”

Two residents who spoke during public comment voiced their opposition to the notion of extending even more tax breaks to National Cycle.

“The taxes in Maywood are already high,” said resident Robert Clark. “To sit here [and give the company a tax incentive while] we can’t get the streets repaired — that’s a big pill to swallow.”

Gloria Clay, a Maywood resident and member of the police and fire commission, said that “I’m not in favor paying nobody’s bill; I can barely pay my own. I wish you guys will reconsider and make sure taxpayers don’t get stuck with the bill.”

National Cycle’s president and CEO, Barry Willey, said that the company’s contribution to the village “is more than just property taxes … These manufacturing jobs have a multiplier to their value.”

Miguel said that the village would be in worse shape if National Cycle moved its operations and employees out of the village to an area with lower property taxes. He said that the company has moved twice in its 82 years in the village “and every time we moved, the building did not get purchased and there was no tax revenue from that previous building we moved out of.”

He added that National Cycle has “never asked the village for economic support in” its 82-year history. Miguel said that he’s confident that the company will be able to continue its expansion efforts if they receive the Class 6b SER, which some village officials said the company has earned.

“We have a business that has been in the community for 82 years and we shouldn’t throw that out the window,” said Trustee Isiah Brandon.

“I’ve been concerned for quite some time about maintaining businesses in the village of Maywood,” said Trustee Henderson Yarbrough, a former mayor of Maywood. “I know that we’ve lost businesses due to the high tax rate on commercial properties and we haven’t really come up with a way, until now, to offer any kind of relief to those who have been here supporting this village for many, many years.”

Maywood Mayor Edwenna Perkins said that she was also in support of the proposed tax break for National Cycle.

“The citizens of Maywood want business,” she said. “We cannot give them business, unless we give [the businesses] some support.”

The board voted 5-1 in favor of a motion that called for the matter to be moved to the next board meeting on Sept. 18, where the board will vote on whether or not to finalize the resolution in support of giving National Cycle the Class 6b SER. Wellington voted against the motion. Trustee Melvin Lightford was absent.

The village officials in support of giving National Cycle directed village staff and attorney Michael Jurusik to make the tax break contingent on the company completing its expansion, which they said could potentially offset at least a portion of the $1.4 million in projected tax revenue that the village could lose. VFP

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One thought on “Maywood Company Seeks Tax Break That Could Shave $1.4M Off 10-Year Bill

  1. Really can I get a tax break too. I didn’t realize all you have to do is ask. Who pays that tax amount? You do the resident? Wake up Maywood? These people could not care less about residents

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