This is vacant property at 340 E. Howard Ave., in Des Plaines, which will become home to Zip Mail Services if Cook County approves 6b tax incentives as expected.
Des Plaines is trying to be more business-friendly by offering tax incentives to new businesses that improve vacant properties and relocate into town.
The city council Tuesday night unanimously approved a resolution supporting a Class 6b application by an investment firm for the property at 340 Howard Ave., which has been vacant since Feb. 1, 2009.
Cook County ultimately must approve any 6b classification, but applicants first require the local community’s blessing. Typically with that, the county has granted the tax break.
A 6b designation allows property to be assessed at a lower rate than the typical industrial property, which would be assessed at 25 percent of its value. The tax incentive runs for 12 years. The property is assessed at 10 percent for the first 10 years. The assessment goes up in the 11th year to 15 percent, and to 20 percent in the 12th year.
The property’s new tenant will be Zip Mail Services Inc., a large volume mail distribution company that is expanding and will be relocating its entire operation from its current location in Schiller Park to Des Plaines, said attorney Peter Tsantilis.
The owner proposes investing between $150,000 and $220,000 on the property. The business will be moving its existing workforce of 40 employees and could potentially add 30 new jobs to Des Plaines, he added.
While Tsantilis said the company is committed to hiring locally, Des Plaines 5th Ward Alderman Jim Brookman urged the business make every effort to hire qualified candidates from Des Plaines.
It’s the second 6b granted by Des Plaines within roughly two months — a shift in policy from years past. Since 1991, the city has sanctioned 11 6b applications.
“We have not issued one since 2007,” said Mike Bartholomew, Des Plaines community and economic development director. “What has happened over the years is Des Plaines stopped entertaining the 6b notion. Recently, we decided that we need to be open to that. It just goes to our economic development initiative. You really need to do something to have (vacant properties) reoccupied again and encourage jobs. It’s not going to be occupied unless we offer an incentive.”
The city council late last year granted a Class 6b application for the property at 2100 N. Mount Prospect Road, which had been vacant for two years. The property owner there also was an investment firm that will be leasing the site to Warehouse Direct, which sells office and school supplies.
Even with the tax cut, the properties likely will generate more revenue once occupied, Bartholomew said.
“They were both vacant so the amount of taxes that were collected on the vacant building is far less than the taxes that would be collected in a fully occupied building at 10 percent,” Bartholomew said.
Warehouse Direct could bring in 250 to 300 new jobs to the city.
The second 6b application sanctioned this week came about because of the earlier one the council approved, Bartholomew added.
"As we start to get a reputation for working with businesses, that word spreads quickly,” he said. “It does make simple sense. If we’re not business-friendly, somebody is going to another community.”
Both 6b requests must still be approved by Cook County. The earlier application is up for consideration on Jan. 18.