Niles village, chamber and Chick-fil-A restaurant officials cut the ribbon on the new Chick-Fil-A location at 5650 W. Touhy Ave., Niles Thursday, Oct. 10. (Photo provided)
Niles trustees considered recommending Cook County commissioners grant two 7B property tax incentives at their Tuesday, Oct. 22 village board meeting for two Chick-fil-A restaurants in the village. They ended up approving one and rejecting another.
Trustees rejected a 7B recommendation for Chick-fil-A at 5650 W. Touhy Ave., which opened Oct. 10. Trustees also voted down a measure which would have considered that location blighted and a conservation area — designations required to move forward with the 7B.
Trustee Denise McCreery said it would set bad precedent to award a tax incentive for development to a property after it is already built, open and operating.
Trustees approved a 7B recommendation for a second Chick-fil-A location at 8575 W. Golf Rd. at Golf Mill Shopping Center. The second location would be constructed in Golf Mill’s parking lot as an outlot building. Construction has not yet begun on the Golf Mill site and a timeline for opening has not been released.
A 7B property tax incentive is similar to a 6B tax incentive, but is awarded to commercial properties rather than industrial properties. The incentive reduces commercial property tax rates from 25 percent to 10 percent for 10 years, before increasing them to 15 percent in year 11 and 20 percent in year 12 before returning property tax rates to 25 percent in year 13.
To qualify for a 7B, property must have been vacant for two years, blighted, must see substantial renovation or must qualify for some other special circumstances.
Village documents say the property at 5650 W. Touhy has been vacant since Brick House Tavern & Tap closed in 2017. Chick-fil-A also invested $2.5 million into renovations for the 5,000 square foot restaurant.
As a vacant property, 5650 W. Touhy currently pays $53,000 per year in property taxes, a village memo said. With the 7B property tax incentive in place, Chick-fil-A would have paid $73,419 in annual property taxes, adding up to $357,420 in additional taxes over taxes paid on the property in its vacant state, attorneys for Chick-fil-A said in a letter to the village.
The Golf Mill Chick-fil-A building would be 4,730 square feet and cost about $2.1 million to build on what is now a parking lot.
As a parking lot, attorneys for Chick-fil-A say the property generates $40,004 in property taxes. Once developed the property, with the tax incentive in place, it would generate $72,006 in property taxes, or $492,055 more in property tax revenue over the life of the incentive than currently generated.
Attorneys also said combined taxable annual sales at the two locations are expected to generate $3 million.
The Touhy Avenue location creates eight new full-time jobs along with 60 part-time jobs. The Golf Mill location will create eight to 10 full-time jobs once open along with 110 temporary construction jobs.
Both locations would have to comply with Cook County’s Living Wage ordinance for restaurant jobs, which will see the minimum wage reach $13 per hour by July 1, 2020.
County officials adopted an ordinance several years ago, saying, even if a local municipality uses home rule authority to opt out of the county’s higher minimum wage, any business receiving a property tax incentive must pay their workers the higher county minimum wage.
Niles trustees used their home rule authority to opt out of the county’s higher minimum wage in 2017. A lower statewide minimum wage was adopted after the county’s ordinance went into effect.