North Cook News

Village of Arlington Economic Alliance met Dec. 18.

Here is the minutes provided by the alliance:

MEMBERS PRESENT:

Scott Whisler – Chairman

Joyce Barabicho

Rich Casey

Matt Fink

Tony Guido

Rex Paisley

Dave Parulo

Brian Roginski

Andrew Stengren

MEMBERS ABSENT:

Lyndsay Holton-Crowe

Jon Ridler

Andi Ruhl

STAFF PRESENT:

Michael Mertes – Business Development Coordinator

ALSO PRESENT:

Mike Driskel, Arlington Heights Memorial Library

Keith Moens, Resident

Scott Rowader, Special Events Commission

Call to Order

Chairman Whisler called the meeting to order at 7:34 AM.

Approval of Minutes – October 23, 2019

The meeting minutes of the October 23, 2019 Arlington Economic Alliance meeting were reviewed.

ANDREW STENGREN MOVED AND JOYCE BARABICHO SECONDED A MOTION TO APPROVE THE DRAFT OCTOBER 23, 2019 ARLINGTON ECONOMIC ALLIANCE MEETING MINUTES. ALL ALLIANCE MEMBERS

VOTED IN FAVOR OF THE MOTION.

Downtown Construction Update

E-mail were sent through Thanksgiving week. A pedestrian crosswalk at Dunton Avenue, between Campbell and Sigwalt, has now been installed. The bulk of work is now concluded. Staff is awaiting updates on IDOT’s Northwest Highway construction. Due to the time of year, it is likely that the Downtown Arlington Heights portion of the project will not be undertaken until the spring. Overall, the only issues Mr. Roginski had with the construction were a weekend in which the intersection outside his restaurant was closed off, and some outdoor diners having issues with the dust. Mr. Fink feels that frequent drivers in the Downtown may have an adjustment period regarding the bumpouts for the new crosswalk on Dunton, but that it is useful and helpful to pedestrians that regularly cross that street.

Downtown Signage Update

The parking guidance system is set to be installed beginning in January, and is expected to take about 4-6 weeks.

The contract is finalized for garage/parking lot blade signs and pole signs. Installation is anticipated to begin in the spring. Interior painting of the garages has been completed, as are all of the level signs at the entrances of the stairwells.

Buy Local Program Update

Michael Mertes has been working closely with the Alliance working group made up of Lyndsay Holton-Crowe, Jon Ridler, and Andi Ruhl. A flyer for the program has been updated and is being reviewed by the working group. Plans are to implement the program in early 2020. Mr. Stengren complimented the program as a creative effort to support existing businesses in the community.

Development Update

Mr. Mertes gave an overview of development news in the community:

• The Committee of the Whole voted against permitting retail cannabis on October 28 by a 6-3 vote.

• A new marquee for the Metropolis Performing Arts Centre was approved on December 16. Installation is expected to occur in the spring.

• There are several new businesses in the Downtown, Passero has re-opened in an expanded space that previously housed California Pizza Kitchen. The Salt Escape opened in October. Dee Taylor Designs, a handmade retail and custom jeweler, is now open. Elegant Designs a kitchen and bath contractor with boutique retail (coffee/tea, candles, soap, etc.), recently opened next to Bentley’s Pet Stuff. For Papa’s Sake, a home healthcare provider, recently held a ribbon tying for their administrative office. Lastly, build-out continues for Beer on the Wall and Coco & Blu Café.

• Mr. Paisley inquired about which adjacent communities approved retail cannabis sales. Those that approved it, in some form, include Schaumburg, Buffalo Grove, Rolling Meadows, and Wheeling. The Commission also inquired about Palatine and Prospect Heights, but Staff was unsure at the time (note: both have approved it).

• Regarding the northeast corner of Algonquin and Arlington Heights Road (the former Yanni’s site) Mr. Mertes continues to reach out to ownership, but there are no plans to move forward with development at this time.

• Development of the Hickory-Kensington Apartments is still planned to move forward.

• Staff is working with Arlington International Racecourse on future plans.

• Planning & Community Development Staff continues to work with Bradford Allen on potential redevelopment of the southeast corner of Algonquin & Arlington Heights Road. Per Mr. Parulo’s inquiry, Mr. Mertes said that he would look into landscaping maintenance at that corner.

Tax Base Expansion Report (continued)

This is a continuation of the presentation and discussion regarding the Tax Base Expansion Report composed by

Planning & Community Development Staff. An executive summary was initially provided to the Alliance during its

October meeting. The purpose of bringing it to the Alliance is twofold. Firstly, for educational purposes. It is to provide the Commission with a breakdown of the Village’s tax base and business sectors. Also, the research done on growing business types/sectors that could benefit the Village. Secondly, for feedback. To see if the report is missing any key information, or if there are other trends that the Village should consider recruiting or helping grow.

The executive summary is an inclusive snapshot of a 40-page report broken down into five parts. At the October

Alliance meeting, presented and discussed were:

• Business sectors that make up the tax base

• Aspects that contribute to the tax base and their impact

• Emerging trends and technologies, which included growing business types and sectors

The remaining two parts involve the future economic impact of business sectors and tax revenues, as well as conclusions and recommendations.

Part IV: Assess future economic impact of business sectors and tax revenues. In order to assess the potential economic impact of the aforementioned business sectors on our revenue sources, the Village’s Planning & Community Development Department looked at seven key questions:

• What will be the impact on jobs? This includes growth of people working from home and automation replacing

traditional industrial jobs.

• What will be the impact on tax revenues and fees?

• What will be the impact on existing parking?

• Will our infrastructure be able to accommodate new technology?

• Where is our competition? Woodfield and Randhurst are major retail competitors. While the I-90 corridor competes for industrial, warehousing, and logistics businesses.

• Are existing land/developments able to be redeveloped?

• Are existing Village and State Codes able to accommodate new uses and technology?

The various types of businesses and sectors that exist in Arlington Heights, or will open in the community in the coming years, has crucial impacts on key revenue sources:

• Residential & Mixed-Use can help generate greater property taxes, while bringing in population to support businesses and bring more sales taxes and income taxes to the community.

• Medical Office is a growing industry that can fill vacancies and generate daily traffic. They also help direct customers to businesses that generate sales taxes and food & beverage taxes within their respective shopping centers. This is also an opportunity to encourage further partnership with Northwest Community Hospital.

• Professional Office generates property taxes and employment, while their employees contribute residual sales taxes and food & beverage taxes. Demand is currently limited for individual office spaces, but there are opportunities to consider satellite campuses and co-working.

• Industrial/Manufacturing/Warehousing provides significant property tax benefits when occupied. Arlington Heights offers an advantageous location near highways and O’Hare.

• Tech Incubation is a re-tenancy opportunity for large office, flex, or industrial vacancy. The Village’s location in the Chicago market is an opportunity to encourage a suburban start-up, or spin-off of a Chicago-based entity.

• Retail could be a struggle in terms of attracting traditional retailers. Attraction efforts need to bring in experiential retail, which still contributes sales tax dollars, while finding other tenants to complement existing retail.

• Restaurants and Dining provide significant sales tax revenues. Food & beverage tax revenues have been going up in Arlington Heights over the past few years as well.

• Hotels provide property tax, hotel tax, food & beverage tax, and even some sales tax revenues. The focus should not just be bringing in new hotels, but ensuring support of existing ones.

• Entertainment does not always bring in substantial tax revenue, but it is an indirect revenue generator. For example, patrons of the Metropolis Performing Arts Centre often visit the Downtown shops and restaurants.

• Auto remains a significant sales tax generator for Arlington Heights. It is critical to support existing dealerships and draw more people to buy vehicles in Arlington Heights.

Potential impacts on the Village’s revenue stream are anticipated in the coming years as follows:

Property Taxes are, and will continue to be the segment with the largest impact on the budget. For 2020, the Village

Board voted not to increase the municipal property tax levy. Mr. Paisley inquired about the Village’s population trends. The 2010 U.S. Census showed approximately 75,100 people residing in Arlington Heights, and this number is a little higher now per recent estimates (note: 75,249 as of July 1, 2018). Recently approved residential developments should increase this number. Chairman Whisler mentioned concern in the real estate market regarding recent assessments to commercial properties. There might be some restraint from the development community until the tax numbers for 2019 are finalized.

Mr. Guido affirmed that property taxes at his auto dealership have gone up substantially over the past few years. Mr.

Fink added that banks are stress testing the taxes and the ability for property owners to repay their loans. Mr. Parulo inquired if data shows business relocation to other counties or states. Chairman Whisler has not seen this data.

However, he recommends looking into the increased burden on businesses, many of whom have triple net leases and are responsible for a share of their location’s property taxes. Regarding Arlington Park, Mr. Parulo feels that the

Village needs to poise itself for a potential significant loss in property taxes if the track should decide to close.

Sales Tax generators, especially traditional ones (apparel, general merchandise, etc.), may continue to decline.

Growing other sales tax generating categories, such as dining, could help offset losses. Income Taxes are a significant revenue generator and can be enhanced, or at least stabilized, by attracting new residents. Food & Beverage Taxes are heavily tied to dining, a trend that shows modest growth in the near future. Hotel Taxes are not a significant source of revenue compared to other local taxes, but still provide funds to the Village’s coffers. Such tax revenues should go up modestly in the relatively near future with development of Chez Arlington and Arlington

Downs hotels. It is important to ensure that existing Arlington Heights hotels are thriving as well.

Part V: Conclusions and Recommendations

1. Certain industries will continue to grow, but new technology will affect the number of employees hired compared to pre-recession levels.

2. A long-term reduction in sales tax growth should be anticipated, and the possibility of a State-implemented service tax should be taken into consideration. Illinois is one of only three states in the Midwest that does not currently implement a service tax.

3. There will be a continued gap between larger firms and smaller firms in terms of growth, as larger firms will have the finances and employees to implement new technology. However, advances in technology (A.I., blockchain, etc.) also have the opportunity to greatly help small businesses.

4. Luring major employers will require an investment in infrastructure, particularly tech infrastructure. This includes fiber optic cable and 5G. Working with property owners to position their sites competitively in the marketplace will be important.

5. The Village, and overall region, may be overbuilt in terms of commercial in the long term. Therefore, there will be a need to look towards redevelopment of failing properties, including the possibility of adding mixed-use and entertainment components to the sites.

6. Dense population growth can support existing businesses and help the offset costs of sprawl, but a high quality of life will continue to be the biggest draw to potential new residents.

7. Millennials are moving back to the suburbs, but having fewer children and taking up less space. Consideration must be given regarding housing needs that meet the demand for access to a more urban lifestyle, changes in family size, and immigration/demographic changes. A balance of different housing options is crucial.

8. Staff will focus retail/restaurant/service strategies on growing experiential retail and entertainment. Efforts in regards to attraction and retention will try to ensure that thriving shopping centers continue to succeed and have occupancy.

9. Staff’s office strategy will look at possible redevelopment opportunities for high-demand uses (hotel, residential, industrial, etc.) where office may not meet the market demands. Unique possibilities to incubate business will be explored as well.

10. The Village’s industrial strategy will include following trends in automation to see if there are opportunities to lure manufacturers. Additional efforts to retain existing/growing manufacturers, and to seek out their buyers and suppliers for potential additional locations or enhanced partnership opportunities, will be undertaken.

Mr. Stengren feels that a key theme to the findings is the need to identify failing and outdated properties, and redevelop or reinvigorate them. Destination master planning was discussed by Mr. Parulo, which involves laying out and determining the best opportunities for refreshment and redevelopment. Resident sentiment is critical too though, and it is important to partner with community stakeholders.

The past 2-3 years have gone well for the residential real estate market, Mr. Stengren noted. That said, according to the MLS for northern Illinois, sales are down about 4% for 2019. This is a slight slowdown, but with low unemployment and interest rates, the economy still seems to be doing well. Inventory is down, however. The ideal situation would be a balanced market of demand between buyers and sellers. Ms. Barabicho has spoken with several Arlington Heights residents and other real estate professionals. A recurring issue she has heard is the burden of student loans, which is affecting young professionals’ ability to purchase homes. Adding to this, Mr. Stengren said that rental demand is still strong and with rates increasing. He feels that this is primarily a market-driven trend. Mr. Guido re-emphasized the demand for rental housing, both for Millennials and seniors. He pointed to Wheeling Town Center as another example of multi-family development that could attract people from other Chicago area communities, and if successful, could trigger additional similar development nearby.

In Chairman Whisler’s opinion, the biggest current barrier to development has been property taxes and the uncertainty surrounding potential increases over the next few years. Mr. Stengren feels that Arlington Heights is very attractive to potential residents, helped by ongoing development and enhancement of the Downtown, and support the schools. Mr. Rowader mentioned Elk Grove Village’s “Makers Wanted” campaign as an outside-the-box tool to attract new businesses to the community, specifically their sponsorship of a College Bowl Game.

Other Business

Mr. Moens expressed his enjoyment of the meeting’s discussion and asked for the potential inclusion of resident comment on future agendas.

The next regularly scheduled Alliance meeting is Wednesday, January 15.

Adjournment

TONY GUIDO MOVED AND BRIAN ROGINSKI SECONDED A MOTION TO ADJOURN. ALL ALLIANCE MEMBERS VOTED IN FAVOR OF THE MOTION.

The meeting adjourned at 8:48 AM.