City Mulls New Tax on East-Side Retail
St. Charles city staff will examine whether the east-side business corridor is eligible to become a business district.
The east side will have a difficult time attracting new businesses or filling empty storefronts without a more proactive policy from the city.
That, according to St. Charles city staff, is the crux of an idea that could allow St. Charles to improve the east-side business corridor with funds collected from an added retail tax on businesses in the area.
On Monday, members of the Planning & Development Committee approved staff to start an eligibility study of the corridor. Chris Aiston, the city’s Economic Development director, told the committee that St. Charles needs "new tools" for attracting new east-side business and holding on to the ones already there.
“I think status quo is dangerous for us,” said Aiston.
The proposed business development and redevelopment district would encompasses a contiguous portion of the corridor that stretches from near the city's downtown along Main Street, all the way to the east-side border. The area includes about 200 buildings and hundreds of businesses.
Under Illinois statute, creation of such a district would allow the city to add a tax of up to 1 percent on most goods sold by businesses within the district, according to city documents. Retailers outside of the district would not be subject to the tax.
The revenue, which becomes its own fund, helps pay for projects, such as street, traffic light or landscaping improvements. According to city officials, the money could also be used for marketing the corridors to potential new businesses. Aiston said that communities such as Yorkville and East Dundee have successfully established business districts.
Aiston estimates that the taxes could generate hundreds of thousands of dollars. The earliest it could be implemented is July 1, 2012.
The community wants to see something done to make the east side corridor more attractive, said St. Charles City Administrator Brian Townsend.
Business on the east side appears somewhat mixed. Big-box retailers Wal-Mart and Super Target bring in a steady stream of customers, as does upscale clothing store Von Maur, an anchor in the evolving Charlestowne Mall.
Other businesses have recently departed. Sears shut its doors in the Mall in 2010 (recently, a Sears Home Appliance Showroom opened up just down Main Street). Bookstore giant Borders closed its St. Charles location just months before the entire chain shuttered.