A proposal to reduce the village amusement tax from 5 percent to 2 percent met with a mixed response from the board of trustees Tuesday, Aug. 26.
The measure was tabled until a local business requesting the reduction, Brunswick Zone XL, can provide more information. At issue was whether the business could provide evidence of hardship caused by the tax and whether it could pass on some or all of the tax burden to customers.
The amusement tax went into effect at the beginning of 2014 in an effort to help diversify village revenue sources, according to Finance Director Dennis Bubenik.
“It was never going to be a large source of revenue for us … but it did help us meet our diversification goal,” Bubenik said.
He noted the tax had been under consideration when Brunswick redeveloped the long-vacant former Kmart building, and at the time, the village agreed to defer implementing the tax for six years. Actual implementation of the tax was 10 years from the original agreement.
Cathy Stevens, representing Brunswick, said the bowling and entertainment enterprise at 3043 W. 183rd St. needed relief from the tax because while it made a small profit in 2012, it lost money in 2013.
She made the case that the business contributes to the local economy, employing 72 people, 9 percent of whom are Homewood residents, paying about $850,000 a year in wages.
“We pump a lot of wages into this area,” she said.
She also noted some intangible contributions to the community, citing the guidance in life skills the manager, Toby Fowlkes, provides her staff.
“We have been incredibly involved in the morals and ethics of the people who work at the bowling center,” she said.
Mayor Richard Hofeld said the business pays about $400,000 in property and other taxes, and he expressed support for the reduction of the amusement tax burden, which Stevens said costs Brunswick $70,000 to $80,000 per year.
Trustee Barbara Dawkins agreed with Hofeld in supporting a reduction in the tax rate.
“When we first implemented the tax, we didn’t really know how it would affect businesses in town,” she said. “I don’t want to be in a position where because of this tax we are forcing businesses to leave, especially at that location where it took so long to get something in there.”
Trustee Tom Kataras said he didn’t think a strong case had been made for the tax rate reduction.
“I don’t like to penalize businesses,” he said. “I feel bad for them, but they don’t make a compelling case here. I don’t want to put them out of business, but I don’t think it’s our job to rescue them.”
One issue he brought up was whether Brunswick passed the amusement tax costs on to its customers. Stevens said it state statute did not allow that, and even if it was allowed, the company would not want to raise prices at the Homewood facility.
Kataras and Trustee Jay Heiferman said they would like clarification on the legality of passing on the tax costs and more details about the company’s financial situation before taking up the issue again.
“I’d like to help, but I’d also like to verify,” Heiferman said.
Stevens said the bowling center is one of more than 80 Brunswick bowling centers that have been sold to AMF, which will likely take over in mid-October. The lease on the building expires May 2016, she said.
“I want this bowling center to stay here,” said. “Toby and lot of people put a lot of effort into this bowling center. The bowling center is not making money and this tax is a burden.”
Village Attorney Christopher Cummings noted the tax affects Brunswick more than other businesses in the village because it’s the only one which is predominantly an amusement concern.
The board also approved a measure terminating the 175th Street TIF District, created in 2011, and entered into an agreement with Kane, McKenna and Associates for professional services not to exceed $33,000 to develop a new tax increment financing district in the 175th and Halsted street area.
Hofeld said the current district was a victim of the most recent recession. And like many homeowners who saw the assessed value of their homes sink below what they owed on their mortgages, the properties in the TIF are valued below the district’s base equalized assessed valuation.
“All of our TIF districts have really taken a hit, and particularly hard hit was 175th,” said Paula Wallrich, director of community development. “It declined $4.4 million since its inception.”
“This is a TIF that’s upside down,” Hofeld said.
Bob Rychlicki, executive vice president of Kane, McKenna and Associates, said Homewood was not alone in this situation.
He will work with village staff to fashion a new TIF district in the same area, which continues to suffer from building vacancies and other development problems, Wallrich said.
In other business, the board
- approved a $27,453 upgrade to the village audio/visual system, which according to Assistant City Manager Michael Marzal has not been upgraded for eight years;
- approved a leasing agreement for two Ford Explorers from Van Drunen Ford for $66,624;
- approved a raffle license to Homewood Flossmoor High School Foundation;
- approved the sale of surplus equipment;
- approved a claims list of $967,954, of which 90 percent was for three items, $306,000 for water from Harvey, $250,000 for water meter replacement and $315,000 for LED light installation;
- approved a resolution authorizing staff to apply to the South Suburban Mayors and Managers Association Surface Transportation Program to assist with funding 183rd Street improvements;
- reappointed Jim Wright to the Appearance Commission.
Contact Eric Crump at [email protected]