BACKGROUND

Lavax, Inc. is a growing enterprise looking to expand within Arlington Heights.  The company is requesting Village approval for a Cook County Class 6b Property Tax Classification relative to 330 W. Campus Drive, consisting of one parcel of property.  The property has not been completely vacant for more than one year, and due to this fact the applicant is requesting “Special Circumstances” from Cook County.

Lavax, Inc. produces the NeuEve line of femine care products, and is currently working with the FDA on approvals to mass-market these products.  In order for the business to expand their operation within Arlington Heights and invest in this property, a Class 6b property tax abatement is being requested.  The Village's guidelines for Class 6b applicants are based upon employing at least 25 workers, showing financial benefit to the Village, and providing 10% of their property tax savings over the first five years of the incentive towards the Zero Interest Loan program fund.

If approved, the company would employ eight on-site workers, and two remote workers, in Year One.  The company’s growth plans see adding 10-25 full-time workers, and 5-15 part-time staff, over the next five years.  As the business would not be employing 25 workers at the commencement of the incentive period, they are requesting a waiver from this requirement justified by their planned near-term employment growth.

The applicant anticipates having a positive financial impact on the Village.  Currently operating at 3327 N. Ridge Avenue, relocation of this growing business within the community will see reinvestment in an industrial facility that will increase its market value and see residual spending at local businesses by the employees.  The applicant has stated that the additional amount of property tax revenue gained from occupying the property with a Class 6b designation, as opposed to allowing the site to become vacant, is estimated at approximately $496,000 over the 12-year life of the abatement, although it is possible that re-occupancy would occur during that time period regardless.  The applicant has signed an agreement to provide the Village with 10% of their property tax savings over the first five years of the incentive period, in order to help fund the Zero Interest Loan program or other economic development programs as needed.

The Class 6b incentive would allow for re-occupancy of a 17,667 square foot facility, reducing industrial vacancy while allowing an existing business to grow within the Village and create additional employment opportunities.  A detailed summary of the request by Lavax, Inc. for a Cook County Class 6b incentive is attached.

RECOMMENDATION

It is recommended that the Village Board of Trustees approve a Resolution supporting the application for a Class 6b tax incentive for Lavax, Inc. for the property located at 330 W. Campus Drive.  This approval is subject to compliance with all Village codes and regulations.