Niles village officials approved on Jan. 26 a resolution in support of a Cook County tax incentive for a developer who plans to demolish the current facility at 7720 Lehigh Avenue and construct a modern industrial building in excess of 135,000 square feet.
Village trustees also approved during the board meeting a 6b agreement with the developer of the property, Molto Properties LLC, as a means to ensure the developer delivers what they’ve promised. Economic and development coordinator Ross Klicker said this is the first time such an agreement as been a component of a resolution in support of a 6b and such contracts will continue to be used in the future in the absence of a 6b clawback process at the county level.
In response to concerns from Trustee Joe LoVerde, Klicker said the village and Des Plaines staff have continued to advocate for and are working with county officials to allow communities with 6b properties to petition the county to revoke their status if developers, or property owners, do not make the improvements, or meet the employment quotas, they promised in their applications for the program.
A 6b classification is designed to promote industrial development in Cook County by offering a property-tax incentive for “the development of new industrial structures, the rehabilitation of existing industrial structures and the industrial reutilization of abandoned buildings,” according to a document from Cook County Assessor Joseph Berrios’ office.
If the county approves the developer’s 6b classification, the property will be will be assessed at 10 percent of its market value for 10 years, 15 percent in the 11th year and 20 percent in the 12th year. Without the classification, industrial properties are assessed at 25 percent of market value, according to the assessor’s website.
In a memo to the village’s finance committee, Klicker wrote that the tax revenue received from the Lehigh Avenue property during the life span of the 6b “would be maintained at a level that is similar to the property taxes collected on the property today.” The total investment into the project by the developer is estimated to top out at $11 million, he wrote.
Without the 6b incentive, Molto Properties has indicated that they will not go forward with the redevelopment project and the property would likely remain vacant following the imminent departure of its three current tenants, Klicker wrote.
In an interview following the meeting, Klicker said a breach of the contract by the developer would “give more support, if you will, to the village to ask the county to rescind the 6b if there were a reason to.” He added that the county had never before revoked 6b status from a property. Klicker also said that the agreement means the village could “seek legal remedies through the courts.”
He said he does not expect the village to run into any trouble with Molto Properties.
Mayor Andrew Przybylo, who urged trustees to approve the resolution and agreement, said that although the tax incentive program has its weaknesses, he doubted the village would have any problems with the redevelopment project proposed by Molto Properties.
Vice President of Molto Properties, Michael Powers, said in an interview following the meeting that his company plans to break ground at the site in late spring after the current tenants have vacated the building. He said he expects the new building to be completed by either the end of this year or sometime during the first quarter of next. The new facility will be marketed to prospective tenants for primarily industrial uses, he said.
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Lee V. Gaines is a freelance reporter for Pioneer Press.