HomeMy WebLinkAbout94-66 Resolution No. 94-66
RESOLUTION
DETERMINING THAT CERTAIN REAL ESTATE LOCATED AT
1019 EAST CHICAGO STREET IS APPROPRIATE FOR CLASS 6B
COOK COUNTY REAL PROPERTY ASSESSMENT CLASSIFICATION
WHEREAS, Jerry Matlock has entered into a contract for
the purchase of certain real estate located within the City of
Elgin and, upon acquisition, intends to seek Class 6b Cook
County Real Property Assessment Classification; and
WHEREAS, the property to be acquired is improved with a
building which has been vacant for two or more years and will
be used for manufacturing purposes .
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF ELGIN, ILLINOIS, that it hereby finds and determines
that the real property located at 1019 East Chicago Street,
Elgin, Cook County, Illinois, assigned Permanent Index Numbers
06-18-401-025,016,019,020 is appropriate for classification 6b
under the Cook County Real Property Assessment Classification
Ordinance.
BE IT FURTHER RESOLVED that the City Clerk be and is
hereby authorized and directed to furnish the Office of the
Cook County Assessor with a certified copy of this resolution.
s/ George VanDeVoorde
George VanDeVoorde, Mayor
Presented: April 13, 1994
Adopted: April 13, 1994
Vote: Yeas 7 Nays 0
Attest:
s/ Dolonna Mecum
Dolonna Mecum, City Clerk
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C� Agenda Item No. E ( 1 '4)
7, :-..., ),-.)
April 7, 1994
TO: Mayor and Members of the City Council
FROM: Robert 0. Malm, Interim City Manager
SUBJECT: Cook County Class 6b Real Estate Tax Incentive
PURPOSE
To provide information regarding potential real estate tax
revenues under the Cook County Real Estate Tax Incentive
Program.
BACKGROUND
In May of 1986, the Cook County Board of Commissioners ap-
proved an ordinance amending the Real Property Assessment
Classification Ordinance to provide for real estate tax incen-
tives for various types of nonresidential developments. The
amended ordinance provides for three separate incentive class-
es that apply to industrial and commercial developments.
These are: Class 6, which applies to industrial properties;
Class 7, which applies to commercial developments; and Class
8, which applies to both commercial and industrial properties
under limited conditions.
Since the adoption of the amended Cook County ordinance, the
City has processed a minimum of three (3) real estate tax
incentive requests under Class 6b of the ordinance. Among
other prerequisites, Class 6b requires approval from the
local municipality. The City has not processed real estate
tax incentive requests under any of the other provisions of
the amended Cook County ordinance.
Basically, Class 6b is applicable to any manufacturing facili-
ty which is newly-developed, substantially rehabilitated,
reutilized following a prolonged vacancy, or located in a
State of Illinois Certified Enterprise Zone. Class 6b pro-
vides for a reduction of the Cook County real estate tax
rassessment factor for industrial properties from thirty-six
percent (36%) to sixteen percent ( 16%) for eight years . The
State equalization factor for Cook County continues to ap-
ply. Given a 1992 State equalization factor for Cook County
Cook County Real Estate Tax Incentive
April 7, 1994
Page 2
of 2.0897, the overall equalized real estate tax assessment
factor for Cook County properties under Class 6b would be
33.44 . This compares to the Kane County equalized assessed
valuation factor of 33. 33 percent for industrial properties .
Recently, the City received a request for approval of a 6b
tax incentive for the building located at 1019 East Chicago
Street (former First Card facility) . In the course of City
Council consideration of the 6b request, a number of ques-
tions were raised regarding real estate tax revenue for the
City and School District U-46 .
The Hanover Township Assessor's Office provided the following
information on assessed valuations for the property.
Assessed
Year Valuation
1993 $ 446, 173
1992 446, 180
1991 1,948,913
Attached is an analysis of projected real estate tax revenue
for the City and School District U-46 . The analysis is com-
prised of three pages as follows:
1. The first page illustrates projected real estate tax
revenue for the 1019 East Chicago site (subject proper-
ty) as a vacant property subject to standard Cook County
real estate tax assessment factors. The 1993 assessed
valuation figure is used as a base for projection. The
projected annual real estate tax revenue is $19,934 for
the City and $47,215 for the School District.
2 . The second page illustrates projected real estate tax
revenue for the subject property at its 1993 assessed
valuation figure subject to the 6b tax incentive. No
increase in assessed valuation has been assumed based on
a return to full occupancy. The projected annual real
estate tax revenue is $8,860 for the City and $20,984
for the School District.
3. The third page illustrates projected real estate tax
revenue for the subject property at its 1991 assessed
valuation figure subject to the 6b tax incentive. An
increase in assessed valuation , (a return to the 1991
level) has been assumed based on full occupancy. The
projected annual real estate tax revenue is $38,699 for
the City and $91,662 for the School District. The Cook
County Assessor's office has indicated to staff that an
upward adjustment of assessed valuation can be expected
once the building is occupied.
Cook County Real Estate Tax Incentive
April 7, 1994
Page 3
After the eighth year, the property would be assessed by
applying the standard real estate tax assessment factor uti-
lized for Cook County.
Contacts were made with the U-46 School District to obtain
comments on the request. As of this writing, no response has
been received.
FINANCIAL IMPACT
The analysis outlined above indicates that the 6b tax incen-
tive would result in a decrease in real estate tax revenues
for the City and School District U-46 if the assessed valua-
tion is not adjusted upward in response to full occupancy.
This is due to the substantial reduction in the assessment
factor from the present thirty-six percent (36%) applicable
to the vacant building. However, if one assumes a return to
assessed valuation levels consistent with full occupancy,
then the 6b tax incentive results in an increase in real
estate tax revenues over existing levels.
LEGAL IMPACT
None.
RECOMMENDATION
The property located at 1019 East Chicago Street has remained
vacant for some time. Given the size of the property, it may
be difficult to secure a user(s) capable of returning the
facility to full occupancy. Additionally, there may be indi-
rect economic benefits in bringing a new business to the
City. Therefore, the staff recommends support for the 6b tax
incentive, conditioned upon an agreement with the property
owner precluding any challenge to an upward adjustment of the
property value by the assessor's office.
44,A..00
Rob rt O. Ma.1 , Interim City Manager
amp
Apr-94
pliz
Projection of Real Estate Tax Revenue
Project: Proposal for Cook County 6b
Location: Elgin - 1019 East Chicago Street
Site Size (acres) • 6.08
TAX RATES:
Total Tax Rate = 0.096030 (1992)
City Tax Rate = 0.021380 (1992)
School District Tax Rate = 0.050640 (1992)
ASSESSMENT FACTORS:
Cook Co. Residential (Miner) = 0. 1600
Cook Co. Residential (Rental) = 0.3300
Cook Co. Commercial = 0.3800
Cook Co. Industrial = 0.3600
Cook Co. Vacant = 0.2200
State EAV Factor = 2.0897
Inflation Factor = 1.00
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CCCCCCC===Cass MCC CC===C = __= _ = =
COOK COUNTY Year 1 Year 2 Year 3 Year 4 Year 5
Nonresidential Use:
Acres Added 6.08
Total Acres 6.08 6.08 6.08 6.08 6.08
Units Added
Aggregate Units 0 0 0 0 0
Estimated Average Value 0 0 0 0
Estimated Market Value 1,239,369 1,239,369 1,239,369 1,239,369 1,239,369
Estimated Assessed Value 446,173 446, 173 446, 173 446, 173 446, 173
Total Nonresidential EAV 932,367 932,367 932,367 932,367 932,367
Undeveloped Land:
Total Acres 0.00 0.00 0.00 0.00 0.00
Value per Acre 0 0 0 0
Estimated Market Value ' 0 0 0 0 0
Estimated Assessed Value 0 0 0 0 0
Total Undeveloped EAV 0 0 0. 0 0
Total Projected EAV 932,367 932,367 932,367 932,367 932, 367
Total Projected Tax 89,535 89,535 89,535 89,535 89,535
Total Real Estate Tax Revenue:
Estimated City Tax 19,934 19,934 19,934 19,934 19, 934
Estimated School District Tax 47,215 47,215 47,21.5 47,215 47,215
05-Apr-94
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Projection of Real Estate Tax Revenue
Project: Proposal for Cook County 6b
Location: Elgin - 1019 East Chicago Street
Site Size (acres) 6. 08
TAX RATES:
Total Tax Rate = 0.096030 (1992)
City Tax Rate = 0.021380 (1992)
School District Tax Rate = 0.050640 (1992)
ASSESSMENT FACTORS:
Cook Co. Residential (Owner) = 0. 1600
Cook Co. Residential (Rental) = 0. 3300
Cook Co. Commercial = 0.3800
Cook Co. Industrial = 0. 1600 (6b)
Cook Co. Vacant = 0. 2200
State EAV Factor = 2.0897
Inflation Factor = , 1.00
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COOK COUNTY Year 1 Year 2 Year 3 Year 4 Year 5
Nonresidential Use:
Acres Added 6.08
Total Acres 6.08 6.08 6.08 6.08 6.08
Units Added
Aggregate Units 0 0 0 0 0
Estiaated Average Value 0 0 0 0
Estimated Market Value 1,239, 369 1,239, 369 1,239, 369 1,239, 369 1,239, 369
Estimated Assessed Value 198,299 198,299 198,299 198,299 198,299
Total Nonresidential EAV 414,386 414,386 414,386 414,386 414,386
Undeveloped Land:
Total Acres 0.00 0.00 0.00 0.00 0.00
Value per Acre 0 0 _ 0 0
Estimated Market Value . 0 0 0 0 0
Estimated Assessed Value 0 0 0 0 0
Total Undeveloped EAV 0 0 0 0 0
r Total F'^o jected EAV 414,386 414, 386 414,386 414, 386 414,386
Total Projected Tax 39,793 39,793 39,793 39,793 39,793
Total Real Estate Tax Revenue:
Estimated City Tax 8,860 8,860 8,860 . 8,860 8,860
Estimated School District Tax 20,984 20,984 20,984 20,984 20,984
05-Apr-94
r
Projection of Real Estate Tax Revenue
Project: Proposal for Cook County 6b
Location: Elgin - 1019 East Chicago Street
Site Size (acres) 6.08
TAX RATES:
Total Tax Rate = 0.096030 (1992)
City Tax Rate = 0.021380 (1992)
School District Tax Rate = 0.050640 (1992)
ASSESSMENT FACTORS:
Cook Co. Residential (Orner) = 0. 1600
Cook Co. Residential (Rental) = 0.3300
Cook Co. Commercial = 0.3800
Cook Co. Industrial = 0. 1600 (6b)
Cook Co. Vacant = 0.2200
State EAV Factor = 2.0897
Inflation Factor = 1.00
C
.....__________ _ _=____-________ __===________==___==_____ ____=_=__:
COOK COUNTY Year 1 Year 2 Year 3 Year 4 Year 5
Nonresidential Use:
Acres Added 6.08
Total Acres 6.08 6.08 6.08 6.08 6.08
Units Added
Aggregate Units 0 0 0 0 0
Estimated Average Value 0 0 0 0
Estimated Market Value 5,413,647 5,413,647 5,413,647 5,413,647 5,413,647
Estimated Assessed Value 866, 184 866, 184 866, 184 866, 184 866, 184
Total Nonresidential EAV 1,810,064 1,810,064 1,810,064 1,810,064 1,810,064
Undeveloped Land:
Total Acres 0.00 0.00 0.00 0.00 0.00
Value per Acre 0 0 0 0
Estimated Market Value 0 0 0 0 0
Estimated Assessed Value 0 0 0 0 0
Total Undeveloped EAV 0 0 0 0 0
Total Projected EAV 1,810,064 1,810,064 1,810,864 1,810,064 1,810,064
Total Projected Tax 173,820 173,820 173,820 173,820 173,820
Total Real Estate Tax Revenue:
Estimated City Tax 38,699 38,699 38,699 38,699 38,699
Estimated School District Tax 91,662 91,662 ' 91,662 "91,662 91,662
Agenda Item No.
•
March 17, 1994
TO: Mayor and Members of the City Council
FROM: Robert 0. Maim, Interim City Manager
SUBJECT: Cook County Class 6B Tax Incentive
PURPOSE
To provide information on a request for the City Council to
take action necessary to apply for a Cook County 6B tax incen-
tive.
BACKGROUND
In a letter of March 4, Leonard Armari, on behalf of his
eft. client, Jerry Matlock, requested assistance from the City of
Elgin in Mr. Matlock's attempts to obtain a 6B tax incentive
from Cook County. Mr. Matlock has purchased property at 1019
East Chicago Street. Accompanying the application for this
6B reclassification to Cook County must be a resolution from
the municipality in which the property is located which iden-
tifies the property as appropriate for the 6B tax incentive.
Mr. Matlock purchased the building at 1019 East Chicago
Street ( formerly First Card' s facility) to house Cross Con-
tainers Corporation. The building is currently vacant. The
company manufactures corrugated boxes . Presently employing
60 at its plant in Itasca, the company expects to expand to
80 employees upon moving into the new location.
The City of Elgin has offered this assistance in the past to
other industries seeking to locate in the Cook County portion
of Elgin. Attached is information about the 6B program and
benefits.
FINANCIAL IMPACT
None.
LEGAL IMPACT
None.
Cook County Class 6B Tax Incentive
March 17 , 1994
Page 2
RECOMMENDATION
t Should Council approve this assistance, a resolution should
be adopted which identifies the property as appropriate for
classification 6B.
Rob t O. Maim, Interim City Manager
amp
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TIMIS C. STARE
Cook County Assessor
CLASS 6B
UGISILITY BULLETIN
T. ceptive jenelite
The Class 6b classification is designed to encourage industrial
development throughout Cook County by offering a real estate tax
incentive for the development of new industrial facilities, the
rehabilitation of existing industrial structures, and the
industrial reutilization of abandoned buildings. Class 6b is
specifically intended for industrial properties that are either (a)
manufacturing facilities or (b) non-manufacturing industrial
facilities located in state-designated Enterprise Zones. The goal
of Class 6b is to attract new industry, stimulate expansion of
existing industry and increase employment opportunities.
Under the incentive provided by Class 6b, qualifying industrial
real estate would be eligible for a 16% level of assessment for a
period of 8 years from the date that new construction or
substantial rehabilitation is completed and initially assessed or,
in the case of abandoned property, from the date of substantial
reoccupancy. This constitutes a substantial reduction in the level
of assessment and results in significant tax savings. In the
absence of this incentive, industrial real estate would normally be
assessed at 36% of its market value.
Where buildings or other structures qualify for the incentive as
new construction or as abandoned property as defined below, the
reduced level of assessment under Class 6b will apply to those
structures in their entirety as well as to the land upon which they
are situated. Where there is substantial rehabilitation of an
existing structure which- has not been abandoned, the reduced 16%
level of assessment is applicable only to the additional value
attributed to the rehabilitation of that structure -- it does not
apply to the underlying land.
81 gfbility Reauirenents
Real estate is eligible for Class 6b status under the following
conditions:
1. The real estate is used primarily for "manufacturing" Q,
it is used primarily for non-manufacturing "industrial"
purposes and located in an area certified as an
Enterprise Zone by the Illinois Department of Commerce
and Community Affairs.
(Revised 1-90)
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2. There is either (a) new construction, (b) substantial
• rehabilitation, or (c) substantial reoccupancy of
"abandoned" property.
3. An Eligibility Application and supporting documents have
been timely filed with the Office of the Assessor
according to deadlines as set forth in the "What Must Be
Filed" and "Time for Filing" sections of this Bulletin.
4. The municipality in which such real estate is located (or
the County Board, if the real estate is located in an
unincorporated area) must, by lawful resolution or
ordinance, expressly state that it supports and consents
to the filing of a Class 6b Application and that it finds
Class 6b necessary for development to occur on the
subject property.
The following definitions, as set forth in Section 1 of the Cook
County Real Property Assessment Classification Ordinance, pertain
to the Class 6b incentive provision:
Industrial purposes,: "Any real estate used primarily in
manufacturing . . . or in the extraction or processing of raw
materials unserviceable in their natural state to create new
physical products or materials, or in the transportation or
storage of raw materials or finished or partially finished
physical goods in the wholesale distribution of such materials
or goods."
Ianufacturina: "The material staging and production of goods
used in procedures commonly regarded as manufacturing,
processing, fabrication, or assembling which changes existing
material into new shapes, new qualities, or new combinations."
Abandoned nronerty: "Buildings and other structures that,
after having been vacant and unused for at least 24 continuous
months, have been substantially rehabilitated or purchased for
value by a purchaser in whom the seller has no direct
financial interest."
What Must Be 11101
An applicant seeking the reclassification of real estate to Class
6b is required to file a "Class 6b Eligibility Application" with
the Office of the Assessor. In addition, an applicant must submit,
at the same time, a certified Copy of an ordinance or resolution
adcipted by the municipality in which the real estate is located (or
the County Board, if the real estate is located in an
unincorporated area) expressly stating that it supports and
consents to the filing of a Class 6b Application and that it finds
Class 6b necessary for development to occur on the subject
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property. After the construction or reoocupancy has taken place,
an applicant must also file, in triplicate, a "Real Estate Assessed
Valuation Complaint" (Form 4818) requesting that the real estate
( be reclassified to Class 6b.
Any information that is not known or any supporting documents that
are not available at the time of the initial filing must be
submitted as a supplement to the Application.
No final action on a request for reclassification to Class 6b will
be taken until a Complaint and an Eligibility Application, along
with the required documentation as described therein, are completed
and filed with the Office of the Assessor.
In addition, in order to maintain Class 6b for the full incentive
term once granted, applicants must annually file an Affidavit with
the Assessor's Office.
lime for Filing
•
The Eligibility Application along with the appropriate resolution
or ordinance must be tiled with the Assessor prior to, but no
earlier than one year before, commencement or new construction.
(excluding demolition, if any) o -stanti: e = t_•n,
including the substantial rehabilitation of "abandoned" property.
With respect to "abandoned" property that has been purchased for
value, the Eligibility Application and the resolution or ordinance
must be filed at the same time with the Assessor no later than
ninety (90) days after the data of purchase. Where "abandoned"
property has been or will be purchased for value and subsequent .
substantial rehabilitation is planned, a single Eligibility
Application and resolution or ordinance may be filed for both
situations, provided that the Application is filed no later than
ninety (90) .days following the date of purchase but prior to
commencement of such rehabilitation,
For the purpose of certifying final assessments on a timely basis
to the Board of Appeals, deadlines for filing Complaints are
established on a township basis. •Check with the Office of the
Assessor to determine when the deadline occurs for a particular
township.
Questions regarding Class 6b may be directed to the Development
Incentives Department of the Office of the Cook County Assessor,
Room 312, 118 North Clark Street, Chicago, Illinois 60602, (312)
443-7529.
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