The City Council’s Committee on Economic, Capital and Technology Development approved a designation of blight and a property tax break for a parcel of land near McCormick Place to facilitate the construction of a new 466-room Hilton Hotel.
According to Brad McConnell, a Deputy Commissioner for the Department of Planning and Development, the site at 111 East Cermak Road had already received a designation of blight in 1999, when the 24th and Michigan TIF district was created. But the Cook County Assessor’s office requires that a property can only qualify for a Class 7(b) tax incentive if that designation was made within the last ten years.
“So a brand new study was completed in 2015, and confirmed, again, that the site is blighted and frankly an eyesore,” explained McConnell.
With the blight designation and the property tax incentive, the developer, Michigan Cermak LLC, will move forward with construction the new hotel, which will have three brands associated with it and more than 50,000-square-feet of commercial retail, said McConnell. The project will support 800 construction and 377 full time jobs, he added.
Once constructed and open for business, the hotel is expected to generate approximately $238,000 in sales tax revenue and $15 million in real estate taxes. Properties awarded with the 7(b) incentive receive a reduced assessment level of 10% of fair market value for the first ten years, 15% for the eleventh year and 20% for the twelfth year, instead of 25%.
The local alderman, Pat Dowell (3), called the project “catalytic” for needed investment along Motor Row, a city-designated historic landmark district. No objections were raised.
The committee also approved two Class 6(b) tax incentives, one for a local frame manufacturer who wants to expand to the city’s Austin neighborhood, the other reinstates an expired incentive for a metal spinning company located in Ald. Nick Sposato’s 38th Ward.
According to Essie Banks, a representative with DPD, Alpina Manufacturing, a 23-year-old national manufacturer specializing in display frames, fans and banners predominantly for retail chain stores, sought the tax break to relocate to a warehouse at 6460 W. Cortland Street in Ald. Chris Taliaferro’s 29th Ward. Several of the company’s banners and frames are features on ballparks across the country.
The 99,000-square-foot building has been vacant for more the past five years, according to Banks, and the company plans to invest roughly $2.4 million on acquiring the property, installing a new electrical system, plumbing, asbestos removal, and purchasing new equipment. With the Class 6(b) designation the company will save $681,000 million in property taxes over the next 12 years.
6(b) breaks have a similar structure to 7(b), but are designed to encourage industrial development at new facilities, the rehabilitation of existing industrial structures, or the industrial reutilization of abandoned buildings.
Fred Haberkamp, President for Columbia Metal Spinning Company, also received approval for a renewed 6(b) designation for his factory located at the southeast comer of Montrose Avenue and Normandy Avenue. According to Marilyn Engwall, a representative with DPD, the company, founded in 1952, moved to its current location in 2002 and has spent upward of $1 million on improvements. The company will save $851,000 in property taxes.