OP business owner Paul Hamer — has Frame Warehouse on Harrison St. — on retrieving freebies to developers through added sales tax:
People do not realize how small the sales tax pie is that goes to our village. It’s only one percent of the total 8.76 percent collected [that is, one% of purchase amount]. That means a business with a million dollars in sales only generates $10,000 for our community. The total sales tax deposited in village coffers for the entire downtown business district in 2003 was only $350,000. In our $100 million village budget, that’s nothing.
As for the Shops of OP, whose developer got lots of freebie help:
2003 Actual real estate taxes from The Shops: $ 353,238
2003 Projected real estate taxes with no public investment: $284.534
Gross yearly Shops tax increase: $68,704
But there’s also the debt servicing by the village, which has led to a net yearly loss of $263,060
Would the developer have paid $6.5 million of his own money to make $20 million? [counting his recent sale of The Shops for $20 mill] I think so. There was no need to ever get us involved financially.
Which leads to the question why the village trustees felt themselves competent in this matter in the first place.
The Shops didn’t increase our sales tax base, didn’t increase our real estate tax base enough to cover our costs, and has not led to a downtown revival—all the things that were promised to us.
The TIF district tax hole that previous village boards have dug for us is deep, and it is not totally clear to me how we will be able to dig our way out without severe sacrifices to local public education or dramatic local tax increases.