Wilke Road 3850, LLC is requesting Village approval for a Cook County Class 7c Property Tax Classification relative to 3850 N. Wilke Road, consisting of one parcel of property. The site has been 100% vacant since August 2019. The property tax abatement in question would apply to the renovation and re-occupancy of the approximately 94,000 square foot building into the corporate headquarters for International Services, a management services company currently based in Lake County. There is another similar building immediately south of this one (3800 N. Wilke), but the buyer is not pursuing a Class 7c request for that parcel. Taking into account the current economic environment, the potential for a large employer to relocate into the community is a significant positive for Arlington Heights.
In order for the petitioner to renovate and re-tenant the building, a Class 7c property tax abatement is being requested. The Class 7c incentive applies to commercial properties whereas the 6b is designated for industrial users. Additionally, the Class 7c incentive lasts five years, with only one renewal opportunity, whereas the 6b lasts 12 years with no existing cap on number of renewals.
The Village's guidelines for Class 7c applicants are based upon employing at least 50 workers, showing financial benefit to the Village, and a formal commitment to providing 10% of their property tax savings over the first five years towards the Arlington Heights Zero Interest Loan program.
Per these guidelines, International Services would employ 350 full-time and 25 part-time workers at this property upon opening. Plans are to employ approximately 600 workers by Year 5. The applicant anticipates having a positive financial impact on the Village as the property is anticipated to generate around $2.65 million in property taxes over the five-year life of the incentive, as opposed to only $1.62 million if it remains vacant. Additionally, the 375+ workers will provide residual revenues to the Village via patronage to other businesses in the community.
The County requires that the application meet four eligibility factors as well:
- A real estate tax analysis verifying stagnation or a reduction in EAV during three of the past six years.
- Evidence of vacancy and marketing efforts, and three years of income tax statements.
- Verification of the “but for” clause (i.e. development would not occur but for the incentive) and economic feasibility following the incentive period.
- Certification of increased tax revenue and employment.
From 2016-2018, equalized assessed value stagnated, then decreased from 2018-2019. The property has been completely vacant for over a year, and with the ongoing growth in office vacancy due to the pandemic, it may be extremely difficult to find another tenant (or multiple tenants) to re-occupy the property. The purchase of the property, and re-occupancy by International Services, is contingent upon the Class 7c approval. And as stated above, increased tax revenue is shown through increases in property taxes, as well as indirect sales and food & beverage taxes.
The applicant is looking to bring a significant, growing company to Arlington Heights at a time when office space is not in high demand. The Class 7c incentive would allow for the establishment of International Services as a major employer within the community, creating additional job and tax-generating opportunities.
RECOMMENDATION:
It is recommended that the Village Board of Trustees approve a Resolution supporting the application for a Class 7c tax incentive for the renovation and re-occupancy of 3850 N. Wilke Road. This approval is subject to compliance with all Village codes and regulations.