Arlington Heights Economic Alliance reviews development updates
The Village of Arlington Heights Economic Alliance met Wednesday, July 20.
Here are the meeting minutes as provided by the Arlington Heights Economic Alliance:
MINUTES OF THE MEETING OF THE ARLINGTON ECONOMIC ALLIANCE HELD ON July 20, 2016 AT 7:30 A.M. AT THE VILLAGE HALL
MEMBERS PRESENT: Scott Whisler – Chairman Frank Appleby Tom Gaynor Tony Guido Lisa Henderson Mike Kalway Dave Parulo Jon Ridler Andi Ruhl
MEMBERS ABSENT: Jamie Janeczko Jackie Lewis
STAFF PRESENT: Michael Mertes – Business Development Coordinator
ALSO PRESENT: Matthew McDonnell – Resident
Call to Order Chairman Scott Whisler called the meeting to order at 7:32 AM.
Approval of Minutes – June 15, 2016 The meeting minutes of the June 15, 2016 Arlington Economic Alliance meeting were reviewed.
DAVE PARULO MOVED AND TOM GAYNOR SECONDED A MOTION TO APPROVE THE DRAFT JUNE 15, 2016 ARLINGTON ECONOMIC ALLIANCE MEETING MINUTES. ALL ALLIANCE MEMBERS VOTED IN FAVOR OF THE MOTION.
Development Update 25N Coworking is expanding into Arlington Heights and has signed a lease for a first floor space at One Arlington in the Arlington Downs project. The coworking business already has one location, in Geneva, and anticipates opening in Arlington Heights later this year. The owners are currently looking for people interested in memberships. Their members often include people who work almost exclusively from home or a café, or are satellite employees for a larger company. Michael Mertes also reached out to the owners of Big Ange’s, per concerns raised at the previous month’s meeting, and business is now going fine.
Barnes & Noble closed in late May/early June. The property owners are subdividing the space into two units, one of which has a lease signed with an incoming retailer. Planning & Community Development Staff will work with the site’s broker to help fill the vacant portion of the space. Old Country Buffet in the Town & Country shopping center closed recently. At the May ICSC RECon show, Village Staff met with the property owners who said that while the parent company for Old Country Buffet filed for bankruptcy, they did not expect the Arlington Heights location to close. Planning & Community Development will work with the property’s brokers to help fill that vacancy, as well as the one left by Joe Caputo & Sons. Also, Beat Street, a Downtown retailer, was named the “Best Old-Fashioned Toy Store” in Chicagoland by Chicago magazine in the publication’s August issue.
Mr. Ridler added that Clementi’s Pizzeria & Bar is closing, but that the owners are looking to possibly re-open in the future with a different concept.
DiscoverArlington.com Improvements Village Staff is moving forward with CivicLive, the consultant, on the updates to VAH.com and DiscoverArlington.com. CivicLive has put together an initial survey of feedback regarding the site, which was forwarded to Ms. Janeczko and Mr. Parulo who make up the Alliance subcommittee for DiscoverArlington.com improvements. The subcommittee will be meeting with Mr. Mertes later in the week to make sure that the responses in the survey reflect previous Alliance discussions and input regarding the website.
Small Business Sales Tax Rebate Program Modifications The Small Business Sales Tax Rebate Program was created in 2011, and as of this date, no applications have been received. The goal of the program is to recruit and retain small boutique shops that will bring in sales tax revenue to the Village and also help enhance the commercial area in which they locate, including by bringing in customer traffic that will benefit surrounding businesses as well. The incentive is currently available to new and existing retailers of no more than 5,000 square feet with a minimum lease of five years. Currently the Village receives a 2% tax on general retail purchases. Under the program, the business would be rebated one-third of the sales tax they generate to the Village, to be remitted annually, up to three years.
Planning & Community Development Staff is proposing two modifications to the program:
1. The rebate to the business would be increased to a 50-50 share 2. The duration of the program would be extended to five years
The intent of the modifications is primarily to:
• Support existing retailers by bringing additional foot traffic and potentially more customers
• Fill vacancies and generate some additional sales tax and property tax revenue to the Village
• Remain competitive with communities that also offer sales tax rebate programs and/or have TIF districts
The program is not exclusive to the Downtown. Dave Parulo asked why no businesses have taken advantage of the program since its inception. Mr. Mertes responded that there is no one clear reason. Staff has made concerted efforts to promote the program in the past. Jon Ridler feels that the retention portion of the program isn’t enticing enough to encourage businesses to expand.
Andi Ruhl pointed out that her business doesn’t qualify under the current expansion guidelines, even though she would like to take advantage of it. She might only grow by 30% in terms of floor space, but she’s not eligible because she would need to expand by at least 50%. Dropping the square footage requirement for expansion from 50% to 25% may enable more existing businesses to take advantage of the program. Mr. Appleby wondered why a 50% expansion was set as the minimum requirement for an existing business, and might partly explain why no businesses have applied for the incentive.
Copies of the incentive application were distributed to the Alliance. Chairman Whisler inquired about the statement “tenant must make an investment in their business.” It may be more beneficial to remove that language in order to make the application less confusing and broaden the scope of the program. Mr. Ridler concurred. A merchant committing to a space is already an investment.
Mr. Parulo inquired as to the average retailer’s annual sales in Downtown Arlington Heights. Mr. Mertes replied that the examples used in the two scenarios provided to the Alliance, $1 million and $350,000, were based on examples of actual small businesses in the community. Mr. Appleby also asked as to why the maximum size was designated at 5,000 square feet. Mr. Mertes believes that it was designed to focus on independent boutiques and not larger, national retailers. Chairman Whisler suggested increasing the maximum square footage to 7,500 or even 10,000 square feet as that could still motivate independent business owners to expand, both in Downtown and in other Village-wide shopping centers. Mr. Ridler feels that expanding the program’s minimum square foot requirement could benefit Uptown and Southtown shopping centers by filling vacancies and bringing more traffic.
Mr. Gaynor inquired as to why no businesses have taken advantage of the program yet and recommended looking at how many businesses that would meet the criteria have moved into the Village since the program’s inception. Mr. Parulo and Mr. Appleby asked about how the program has been marketed and Mr. Guido asked how other communities are able to offer grants for things such as façade improvements. Mr. Mertes responded that most communities that offer Downtown grants likely have TIF districts which fund such programs. Arlington Heights did offer a façade improvement program, but their funding source, Downtown TIFs, have since expired. In terms of marketing, Planning & Community Development Staff offer the sales tax rebate program to interested independent retailers that approach the Village. Additionally, targeted efforts are made to successful retail shops in other communities that are looking to open an additional location. Staff does not try to poach these businesses, but reaches out specifically about opening a second location in Arlington Heights. Information on the program has also been sent out to local commercial brokers via email and a broker coffee held at Village Hall in fall 2014, and has been placed in past Economic Alliance newsletters.
Mr. Ridler stated that interest ultimately comes down to value. Business owners already have a lot on their plate and that the amount of money received from the incentive isn’t worth the time and effort. The rebate is both a recruitment and retention tool, and the more enticing it is, the more likely business owners are to take advantage of it. Discussing the incentive program with existing business owners in Arlington Heights was suggested by Ms. Henderson. Simplifying the process as much as possible, and communicating the program more, could help attract more interest.
Basing the rebate percentage on either sales and/or square footage was discussed. As the square footage goes up, the rebate percentage could potentially go down. Mr. Appleby feels that the hours of operation requirements are also too demanding and that most boutique retailers aren’t going to be willing to stay open until 9pm from Thursday through Saturday.
What would make an impact on businesses should be a focus, stated Mr. Gaynor. He asked how many businesses have come in since the program’s inception that would have met the criteria had they applied. This would provide some context. Ms. Ruhl also would like to determine if the program’s focus should be both attraction and retention, or just recruitment. Mr. Appleby concurred with previous comments that in order to make it a more effective retention tool, the expansion requirement needs to be less than 50% of square footage. Mr. Parulo added that the program needs to resonate with the realtors. They should be actively advocating to the program to their retail clients. Ms. Ruhl also noted that many retailers prefer a three-year lease with options, as opposed to the five-year lease required by the program. Chairman Whisler acknowledged this point, but wants to safeguard against businesses from taking the incentive and then closing or moving after three years.
Mr. Mertes noted that the goal of the hours of operations requirement was to encourage merchants to stay open later to encourage a more active street life in the evenings and motivate other businesses to do the same. Mr. Ridler responded that hours of operation could be a component that helps decide the percentage rebate offered. Ms. Henderson asked why the Village is losing retail leads despite the current program. Mr. Mertes explained that some proposals start as a concept but never actually move forward. Retailers in other communities that are targeted for a second location in Arlington Heights simply aren’t ready to move forward with an additional store. Also, the economic recession that occurred during the commencement of the Sales Tax Rebate program also hampered many businesses’ expansion plans.
The Economic Alliance concurred that they were not ready to make a recommendation on the proposed modifications to the incentive. Mr. Kalway pondered the Alliance’s main intent for the rebate, whether it is to fill vacancies, to generate revenue, or to retain businesses. The Commission is trying to determine what the program should be. According to Mr. Mertes, all three of Mr. Kalway’s points are relevant, but that it’s also a quality of life program. It is meant to enhance commercial corridors, such as the Downtown, to make them more lively and pedestrian friendly. Mr. Ridler added that marketing the program may have been hindered by not having a success story to promote.
Mr. Mertes is going to bring the agenda item back in the next couple months for further discussion. The following information will be provided:
• Businesses opening in Arlington Heights the past few years that meet the current program criteria
• Businesses that have closed in Arlington Heights the past few years that met the current program criteria
• Scenarios based upon square footage of applicants and expansions, and hours of operation
Regarding a potential Alliance subcommittee to work on modifying the program, Mr. Mertes suggested that he provided the information requested first to see if the Commission as a whole can come to an agreement. The, it can determine if a subcommittee is needed.
Other Business Mr. Ridler noted that the Mane Event and Taste of Arlington Heights are coming up the first weekend of August. Booth space for restaurants is sold out. Chairman Whisler heard positive feedback regarding Frontier Days and approximately 150,000 attendees were estimated. Mr. Appleby also heard that participation in the Frontier Days races was up.
Mr. Mertes will begin working on the fall Alliance newsletter in the next few weeks. The publication is typically mailed out in October. Mr. Parulo announced that the local and regional convention and visitors’ bureaus have been funded by the State. The State Office of Tourism was also funded, and will be broadcasting their new campaign, “Illinois Made”, both domestically and internationally.
Adjournment FRANK APPLEBY MOVED AND TONY GUIDO SECONDED A MOTION TO ADJOURN. ALL ALLIANCE MEMBERS VOTED IN FAVOR OF THE MOTION.
The meeting adjourned at 8:38 AM.
Scott Whisler, Chairman Arlington Economic Alliance
Prepared by Department of Planning & Community Development
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Arlington Heights, IL 60005