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.
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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.
Bad Idea
7:27 am on Tuesday, October 11, 2011
Add more taxes to create interest in the area, thats interesting. So Illinois just added one of the largest tax increases in American history to businesses, so whats another 1 percent. I think the struggle is not to keep business in St Charles but in Illinois. The last thing a business wants to hear is more taxes. HECK why stop at 1 percent, just increase it to 50 percent and businesses will be fighting to get into St Charles.
Concerned Citizen
8:24 am on Tuesday, October 11, 2011
I want to make sure I am reading this correctly, the city wants to increase the tax rate on businesses in an area that is lacking business. The thought being that the moneys raised will be used to attract more business. Or, a business can just move to a less taxed area of the city and save themselves some money. Who comes up with these idiotic ideas?
Geoff
9:18 am on Tuesday, October 11, 2011
Wow, taxes, it fixes everything.... This should be the final nail for any east side business still surviving.... More government.... That's the answer..... Sad day for St. Charles.... Now I know why I see tumble weeds by 10th avenue.....
Anthony
10:20 am on Tuesday, October 11, 2011
Love this idea! Tax the empty mall when you really just want extra $$$ from Target and Wal*Mart since they have deep pockets. Let's add a hotel tax on the bankrupt Pheasant Run too. This city is in sad shape we need new leaders with vision.
Alexander du Large
11:37 am on Tuesday, October 11, 2011
It is a sad day indeed for St. Charles that so many people commenting here don't have the reading comprehension skills of a Jr High student. The tax is a sales tax. It is not a tax on the businesses.
Nick Swedberg
12:07 pm on Tuesday, October 11, 2011
An earlier headline read "... Tax on East-Side Businesses." While consumption taxes are paid by the consumers at the point of sale, they are something that impacts the businesses as well; the business is the one that collects the tax and turns it over to the city. And, as the story states, this particular tax would affect the east-side businesses in the proposed district. For the sake of clarity, I changed the headline to reflect where the tax will have the greatest impact (the retail transactions). The story has not changed.
Geoff
4:21 pm on Tuesday, October 11, 2011
Whether a sales tax or not... Taxes of any kind will drive away business, but hey, go ahead and follow the failing Illinois economic model. Your insult speaks volumes about your class...
Carol Frey
12:28 pm on Tuesday, October 11, 2011
Thanks for clarifying that Nick. Also in speaking to Mr. Aiston this afternoon it has been deemed that it will hopefully spark a larger name retailer to come to the area.
Taxes are not always a bad thing depending on what they serve and create.
Nick Swedberg
12:44 pm on Tuesday, October 11, 2011
@Carol—Thank you for pointing that out as well. I referenced the hope of the city to bring in new business in the first paragraph of the story.
Brian Townsend
2:01 pm on Tuesday, October 11, 2011
At a forum held last week, business and property owners said that improving retail on the east side of the city is their #1 goal for the city as it forms a new comprehensive plan. This proposed business district is one way to achieve that. The proposed business district would impose a tax on purchases in this corridor to generate revenue to support additional development and leverage investment in the area. Pursuant to state law, there are specific criteria that must be satisfied to create the Business District. While staff believes that the East Main Street area has lagged other areas of the city in development/redevelopment, we do not know if the area qualifies until a detailed study is conducted. At this time, city staff has only requested permission from the City Council to study this idea and report the results.
Carol Frey
2:02 pm on Tuesday, October 11, 2011
@Nick-Your welcome. I can only hope everyone understands the effort that needs to take place to make your communities stronger along with continuing to shop local businesses like ours.
Democrats Fix It With Taxes
9:48 pm on Tuesday, October 11, 2011
When I lived in Bloomingdale I refused to shop at Stratford Square because of the additional 3/4% levied on business in the mall. I think the fix for this is that we should elect more Democrats so they can raise taxes, create more taxes, eliminate jobs, not live up to their own agreements, and spend money to help their own personal cause. Can anyone find fault with that argument?
AmberST
1:19 pm on Thursday, October 13, 2011
The problem with the east side has nothing to do with "street, traffic light or landscaping" It has to do with property owners who don't try to fill the empty storefronts and don't keep up their own property in an attractive manner. Taxing the businesses that are still managing to survive won't help a bit. We need property maintenance codes that are enforcable, and property owners that are accountable. How about a tax on empty store fronts as an incentive for the property owners to fill those vacancies.