[Amended 9-7-2010 by Ord. No. 6603; 1-15-2013 by Ord. No. 6893; 3-4-2014 by Ord. No. 7007]
There is established within the City an Enhanced Sales Tax Incentive
Program (ESTIP).
The purpose of the Enhanced Sales Tax Incentive Program created
by this article is to encourage the recruitment, retention, establishment
and/or substantial expansion of sales tax generating businesses within
the City, thereby stimulating the economy of and within the City,
providing employment for residents of the City and others, further
expanding the goods and services available for purchase and consumption
by businesses and residents of the City, and further increasing the
sales taxes collected by the City, which increased sales tax collections
will enable the City to provide expanded and improved municipal services
to and for the benefit of the residents of the City, while at the
same time providing public or public-related improvements at no cost,
or at deferred cost, to the City and its taxpayers and residents.
As used in this article and all sections thereof, the following
phrases shall have the following meanings:
New sales tax generating businesses, other than existing
auto dealerships and new auto dealerships, which have no physical
facility within the City limits of Crystal Lake for the display and
sale of merchandise as of the date of the adoption of this article
and which commence the sale and display of merchandise from a physical
location within the City limits of the City of Crystal lake following
the adoption of this article.
An amount to be negotiated by the City Manager or the City
Manager's designee, and agreed upon by the applicant; provided, however,
the City Manager shall use as a basis for negotiation an amount which
is not less than the annual average of the sales tax sales receipts
attributed to applicant's business operated upon the subject property
over the three previous calendar years, unless such lesser base amount
is approved by the City Council. In the case of a newly established
business, the base amount shall be determined by the City Manager,
based upon the City Manager's review of the newly established business's
business plan or other documentation reasonably required by the City
Manager to determine the amount of sales taxes which would likely
be generated from the new business without the participation by applicant
in the ESTIP.
The amount of sales tax (as hereinafter defined) collected
by the City in a calendar year over and above a base amount as defined
herein.
New titled motor vehicle, recreational vehicle, and watercraft
franchises which have no physical facility within the City limits
of Crystal Lake for the display and sale of such vehicles or watercraft
as of the date of the adoption of this article. Dealership ownership
changes that occur without adding new franchises are considered existing
auto dealerships.
New titled motor vehicle, recreational vehicle, and watercraft
franchises which have no physical facility within the City limits
of Crystal Lake for the display and sale of such vehicles or watercraft
as of the date of the adoption of this article and which commence
the sale and display of such vehicles or watercraft from a physical
location within the City limits of Crystal Lake after the adoption
of this article.
The record owner or potential record owner of real property
upon which one or more businesses is operated.
The 1% municipal sales tax charged for retail sales within
the City.
A.
Participation in ESTIP shall be based upon approval by the City Council of the City of Crystal Lake, exercising its legislative discretion in good faith. ESTIP is intended to provide an economic incentive to eligible existing auto dealerships, new auto dealerships and new retailers which intend to engage in projects for improvements, as defined by this article and which meet the minimum project costs and annual minimum taxable sales thresholds listed in Table 228-4(A) below, and the criteria for approval set for in § 228-9.
|
Table 228-4(A)
| ||||
|---|---|---|---|---|
|
Minimum Taxable Sales
|
Minimum Project Costs
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Maximum City Cost Participation in a Project
| ||
|
Existing auto dealerships
|
$5,000,000
|
$1,000,000
|
50% of total eligible project costs, not to exceed $1,000,000
| |
|
New auto dealerships
|
$5,000,000
|
$250,000
|
50% of total eligible project costs, up to an amount to be negotiated
with the City
| |
|
New retailers
|
$3,000,000
|
$500,000
| ||
B.
In order to be considered for inclusion in the ESTIP, prior to commencing
a development project an existing auto dealership, new auto dealership
or new retailer must submit an application to the City on forms to
be provided by the City, which application must contain documentation
deemed sufficient by the City Manager, establishing the business's
likelihood to generate taxable retail sales in excess of the minimum
taxable sales thresholds listed in Table 228-4(A) during the first
year of operation of the business following completion of the improvements.
The application shall contain accurate, written cost estimates of
eligible improvement expenses provided by qualified contractors, subcontractors
and/or vendors, all of which are to be verified by the City to ensure
completeness.
Approval by the City Council of an agreement implementing this ESTIP shall entitle the successful applicant to share in such percentage of enhanced sales taxes derived from applicant's property as may be determined by the City Council and incorporated into such agreement; provided, however, that applicant shall use said amounts only for improvements such as those specified in § 228-6 and which are expressly approved by the City Council at the time of consideration of the application. The time period in which said enhanced sales taxes may be shared shall not commence until all public or public-related improvements are completed and meet City standards, and shall be limited by the City Council, in its discretion, to the earlier to occur of 1) the date as may be specified by the City Council in such agreement; or 2) the date on which the maximum payments allowed by such agreement have been paid by the City to the applicant. The applicant must file a complete ESTIP application prior to commencing improvements. The City cannot retroactively approve an ESTIP agreement if the improvements have already begun prior to the City receiving a complete application.
A.
The uses to which any shared enhanced sales taxes may be put by an
applicant shall be strictly limited to those improvements installed
or constructed by the applicant.
B.
As used in this chapter, "improvements" shall include, but is not
limited to, public improvements, including, but not limited to, streets,
sidewalks, curbs, gutters, pedestrian malls, street lights, drainage
facilities, public utilities, landscaping, decorative structures,
redevelopment of existing properties, occupancy of existing vacant
space, public art, fountains, identification signs, traffic safety
devices, bicycle paths, off-street parking facilities, benches, restrooms,
information booths, public meeting facilities, principal buildings,
building additions, and all necessary, incidental, building facades,
architectural enhancements, and appurtenant structures and improvements,
together with the relocation and improvement of existing utility lines,
and any other improvements of a similar nature which are specifically
approved by the City Council.
C.
Nothing contained herein shall limit the City Council from appropriating
additional capital improvement funds for capital improvements directly
or indirectly affecting the property in question as a part of the
City's regular appropriation, capital improvement, or budget process.
The amount of the enhanced sales taxes relative to any party
participating in the ESTIP shall be determined by the City annually.
If in any calendar year sales taxes generated by the applicant's business
operated upon applicant's property do not at least equal the base
amount so as to create enhanced sales taxes for such calendar year,
then no funds shall be shared with the applicant for such calendar
year, and no funds shall be shared until the deficit for such calendar
year and any other cumulative deficit from prior calendar years have
been met.
A.
It is an overriding consideration and determination of the City Council
that existing sources of City sales tax revenues shall not be used,
impaired, or otherwise affected by this Enhanced Sales Tax Incentive
Program. Therefore, the City Council conclusively determines that
only enhanced sales taxes generated by the properties described in
an application, and a subsequent agreement, shall be subject to division
under this article.
B.
It shall be the affirmative duty of the Finance Director of the City
of Crystal Lake to collect and escrow such enhanced sales taxes payable
to the owner in a separate account apart from the sales taxes generated
by, and collected from, any other sales tax generating sources within
the City and to provide an accounting system which accomplishes the
overriding purpose of this section. Interest earnings on such account
shall accrue to the City. Such funds shall not be considered City
funds for purposes of any ordinance or resolution allocating sales
tax monies from particular sources to particular purposes but shall
be applied exclusively to this program.
C.
The City Council of the City of Crystal Lake conclusively states
that this article would not be adopted or implemented but for the
provisions of this section.
Following the comprehensive staff review of the required application documents, City staff shall present the complete application and draft of the agreement required in § 228-10 the City Council for its consideration. Approval of an application for inclusion in this ESTIP shall be given by motion adopted by a majority of the City Council, at a public meeting held as a portion of a regularly scheduled City Council meeting. In addition to the threshold standards set forth in § 228-4, the City Council shall also consider the following factors in determining whether to approve the application:
A.
The amount of enhanced sales taxes which are reasonably to be anticipated
to be derived by the City through the expanded or new retail sales
tax generating business;
B.
The public benefits which are provided by the applicant through public
works, improvements, additional employment for City residents, etc.;
C.
The quality of the proposed development;
D.
Whether the proposal utilizes an existing building(s);
E.
Whether the proposal represents redevelopment to an area or building
in the City;
F.
Whether the proposal represents job diversity in industry sectors
and is part of a growing industry;
G.
The proposal's contribution to the diversity of retail within the
City;
H.
Whether the proposal brings a value-added result to the City or a
development within the City (for example, by moving the company's
corporate headquarters to the City);
I.
The amount of the business assistance as a percentage of new revenue
anticipated to be created by the proposal (for example, by relocation
of the company to Crystal Lake);
J.
The amount of expenditures which may be deferred by the City based
upon improvements to be completed by the applicant at the applicant's
expense;
K.
The conformance of the applicant's property or project with the Comprehensive
Plan, zoning ordinances and building codes of the City; and
Each application for approval submitted to the City Council
shall be subject to approval by the City Council solely on its own
merits. Approval of an application shall require that an agreement
be executed by the owner and the City, which agreement shall, at a
minimum, contain:
A.
A list of those public or public-related improvements which justify
the applicant's approval, and the amount which shall be spent on such
improvements;
B.
The maximum amount of enhanced sales taxes or fees to be shared,
and the maximum time during which the agreement shall continue, it
being expressly understood that any such agreement shall expire and
be of no further force and effect upon the occurrence of the earlier
to be reached of the maximum time of the agreement (whether or not
the maximum amount to be shared has been reached) or the maximum amount
to be shared (whether or not the maximum time set forth has expired);
C.
A statement that the agreement is a personal agreement which does
not run with the land;
D.
A statement that the agreement shall never constitute a debt or obligation
of the City within any constitutional or statutory provision;
E.
The base amount which is agreed upon by incremental period, and the
fact that if, in any incremental period as specified, sales taxes
received from the property do not at least equal said amount, there
shall be no sharing of enhanced sales tax funds for said incremental
period, and that any deficit for any such period shall be carried
over to succeeding periods until the difference between the base amount
and the amount of sales tax actually paid is recovered by the City;
F.
A provision that any enhanced sales taxes subject to sharing shall
be escrowed in the event there is a legal challenge to the ESTIP or
the approval of any application therefor;
G.
An affirmative statement that the obligations, benefits and provisions
of the agreement may not be assigned in whole or in any part without
the expressed authorization of the City Council, and further that
no third party shall be entitled to rely upon or enforce any provision
hereof;
H.
That the agreement shall be subject to the annual appropriation of
sufficient funds for payments as provided in this article;
I.
Any other provisions agreed upon by the parties and approved by the
City Council.
A.
The City Council has enacted this article as a joint benefit to the
public at large and to private owners for the purposes of:
(1)
Providing the City with increased sales tax revenues generated upon
and by properties improved as a result of this Program;
(2)
Encouraging the construction of public improvements by private owners
without debt obligations being incurred by the City; and
(3)
Allowing applicants an opportunity to improve properties which generate
sales activities, which improvements make those properties more competitive
in the marketplace and further provide to applicants additional contingent
sources of revenues for upgrading said properties.
B.
The City Council specifically finds and determines that creation
of this ESTIP is consistent with the City's powers as a Home Rule
Municipal Corporation, and that exercise of those powers in this article
promotes the public health, safety and general welfare. Notwithstanding
any provision hereof, the City shall never be liable or responsible
for any debt or obligation of any participant in the ESTIP.
