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DP Road Rescue

The Discussion > What is the best way for Des Plaines to attract and retain retail businesses?

We all agree that we need to increase the volume of retail sales in Des Plaines if we are going to sustain our operating budget, public projects, and keep our taxes low. I have been working with our Community and Economic Development Staff to build a framework to encourage retail businesses to locate in Des Plaines. You will have a fleshed-out proposal from me shortly, but before bringing anything to a committee I wanted to get you involved.

The best public policy is not made in private. An open and active dialogue between you and your government is the best way to begin this process. Good ideas come from places other than City Hall. So, with that, consider the following question:

What is the best way for Des Plaines to attract and retain retail businesses?

PLEASE REMEMBER TO INCLUDE YOUR EMAIL ADDRESS SO THE WEBSITE DOESN'T DELETE YOUR COMMENTS.

January 28, 2010 | Registered CommenterAlderman Matt Bogusz

I see this a being a multi part solution. First there needs to be an incentive for a retailer to want to actually move into downtown (Metropolitan Square). Speaking as an owner of a small business I see Des Plaines as a massive risk. I don't actually know what space leases for in M Square but being it is brand new and was built during the heyday of economic good times, I'm going to assume it is on the pricey side. There has to be a financial incentive to make business move it. An expensive ghost town alone will not do this. This could be done through some sort of tax credit or rent reduction. Maybe the City would offers some sort of payment assistance plan. If they City said we will waive your tax liability for 2 years and give a first year of rent free given a 5 year lease is signed. That is a great deal for a business owner.

This alone is only the first step. The Second step is to get more resturant/bar establishments in the down town area. This drives traffic and gives people a reason to be down there. I would go so far as modeling it after Arlington Heights. They have a downtown that is fun to go to. When you have foot traffic you have people that may actually buy at the retailers.

The third step is for the City to actively market the downtown area within Des Plaines and neighboring areas. We have the Metra coming through and we should make sure that those passing through town see something exciting. Edison Park use to look exciting from the train before they put that massive station up that blocks the view.

Those are some of my quick thoughts and I'll think more about it.

January 28, 2010 | Unregistered CommenterBrian Krause

I do think offering incentives is one way to try to gain new business and keep existing ones. I also think that Des Plaines has this "river" stigma it has to live with that does not help.
I don't think the answer is simple but I know that Rosemont seems to have no trouble adding new business. Granted they have a convention center that helps and we don't have anything like that.
It make sense to make sure that we as people(of Des Plaines) make a conscience effort to support local business first. Marketing the city(to business owners) is the key and maybe that is something that has been done in the past. A positive image is important..
The downtown area needs to be an area where both young and old can have a good time. I know downtown Arlington Hts. is that way.
Just my quick thoughts..

January 28, 2010 | Unregistered CommenterVince Cullotta

As for me, the heart of the city is a hassle for driving. Once there and parked where do you go. Not much too see and or do. You can only spend somuch time in the Square.

I think we need to take advantage of the train system. Possible a hotel in vicinity of the train station would bring in new comers/tourists to the area. We have easy access to Harvard as well as to the City. With this type of business, it could very well improve local businesses and bring more to the area. the theater is also a big one. How many people go to dinner and a movie? Well not here. Not anymore.

January 29, 2010 | Unregistered CommenterHeidi Cummings

Matt,
I would love to help. But to answer your questions and provide a reasoned plan we need to know some more information.

What are all the taxes, fees licences,etc. that a retail business has to pay the city? Or any business for that matter.

I am aware of Retailer's Occupation tax, Service Occupation tax, the Home Rule Municipal Retailers Occupation tax, the Home Rule Municipal Service Occupation tax and the business license fee. We need to know if their are anymore municipal levies the city forces businesses to pay.

Once we know the dollar burden the city places on a typical business then we can evaluate the total of those levies and recommend downward adjustments or altogether eliminations.

I will tell you upfront that my perspective in this endeavor will be to eliminate/lessen the tax burdens; rather than have the city "partner" with any particular business in a special program that will require extra reporting for the business or any advance of city monies or "pay back" of subsidies.

Furthermore, any reductions or eliminations we might consider should be for all businesses in the city; not just new ones we tempt in; that's just a subsidy at the expense of existing businesses which will be viewed by them as an uncompetetive advantage (which it is).

Dion F Kendrick

January 29, 2010 | Unregistered CommenterDion F kendrick

I take objection to the idea that the main thing needed for retail to flourish in Des Plaines are the granting of incentives or lowered taxes. Des Plaines tax structure for retailers is not very different from thriving retail areas in other nearby towns. This idea presupposes that the main reason retailers don't come to Des Plaines is because of taxes or high rents. Retailers flourish when they serve a market and if rents are too high, then the market will dictate lower rents. Des Plaines seems to have no trouble attracting liquor stores that sell products that are taxed even higher than most consumer goods.

To understand what is the Des Plaines market and what is acheivable, I would start with funding a market study. If incentives are given, they should be to limited to improving the physical surrounding, such as facades or to attract specially listed desired businesses, but in this later situation, the incentive should be structured so that a portion of the sales tax generated from that business is returned. This would incentize the busienss and result in more sales tax being generated for the community. Providng rent subsidies really only benefits the landlord in keeping rents above market rate.

January 30, 2010 | Unregistered CommenterTim Clarke

I've done a great deal of homework on how we might be able to "rebate back" sales tax proceeds to businesses who generate revenue for the City. One of the things I've found is that there are a number of barriers that prevent us from rebating taxes. The largest of which concerns the proprietary nature of sales tax info. For discussion's sake, lets say we were going to rebate 5% of retail sales tax revenue generated from a Popsicle Stand. The Council would be required to publish a value for each rebate, as I do not think (and rightly so!) that the public would approve of a lump sum "rebate pool"...they should know where the money is going. So, if the value of a rebate is public information, it would be rather easy to figure out what a Popsicle Stand contributes to the City in retail sales tax revenue annually. That can then be extrapolated to determine the volume of product the Popsicle Stand moves. This could be considered a competitive advantage and something local business owners might not want available to the public. (remember...this is meant for discussion sake)

January 31, 2010 | Registered CommenterAlderman Matt Bogusz

yes, you are correct, sales tax generation from a particular business is not considered public information and is not provided to the local government. However, as part of a local government sales tax sharing agreement with a specific business, it is quite easy for th elocal government to get that business to authorize the release of this information from the State of Illinois to the local government. I work for another local government and this is how we obtain the sales tax data for our incentives. These incentives are always structured so that the local government is getting more sales tax than previously, prior to sharing any of it sales tax with the business. Of course, this tool only works where substantail sales tax is generated by the business.

January 31, 2010 | Unregistered CommenterTim Clarke

I am not an expert in business but as a consumer I see downtown Des Plaines as an unattractive place. They built this brand new good looking strip mall behind run down old buildings. When people that are not from Des Plaines come in on the train or are driving what they see does not look so good. They need to either remodel or rebuild that strip. Also that movie theatre needs to go it is not doing any good. No one is going to go to the Des Plaines theatre and see some old movie that is on dvd when they can go to Muvico. This may be hard to do in this economy but metropolitan square will never successful until someone does something about that.

January 31, 2010 | Unregistered CommenterJonathan Crowell

Tim: Your point is well taken. The City has the ability to find the per business sales tax revenue. We also have the ability to partner with businesses (and effectively share data). The problem comes when we need to publish the final incentive figure.

Jonathan: There was a certain lack of foresight in the development of Metro Square. I think future development in that area will occur when the market is ready. It's obvious (by the current occupancy of Metro Square) that the past council took a risk that didn't pay off. I hear what you're saying, but I won't support the Council assuming any new position of risk.

January 31, 2010 | Registered CommenterAlderman Matt Bogusz

I agree with Jonathan that out buildings in front of Metro Sq are unsightly and make it very difficult to see the new structures behind them. The cost to remove them and some of the businesses that seem to be doing well (Square Deal and Wahl Jewelry) would be astronomical. Somehow I don't want Des Plaines to be owning more empty property.

One possibility to help the buildings on Minor St. not look so unsightly is to have co-ordinating or even the same color awnings over the shop windows. Something that brings the buildings into harmony and not eyesores to the public. No hand painted signs in the windows would also be a help. I know these are cosmetic suggestions but we need to get people into the area and a blighted look is not helping.

Most people driving on River Rd know that Metro Sq. is there but those driving on Minor St are oblivious to it. I think that some sort of Metro Sq sign should be on Miner St. both on the east and west ends. Perhaps they could be located on the RR side of the street. At least to let people know we have this area and what is has to offer.

Speaking of the ghost town known as Metro Sq., I believe that we need some name stores. I'm tired of going to Arlington Hts. or other towns to shop at Bath & Body or a few other stores. I know that in the past Mom & Pop stores were what the council wanted to nurture but name stores bring in the foot traffic to sustain Mom & Pop businesses. I don't know who pursues retailers into renting here but we need help in marketing our town.

Has anyone asked those people living in all the Condos and apartments what they would like to see in the area? Where do they shop?

February 2, 2010 | Unregistered CommenterMary Rose Nowak

Mary Rose: I hope you got my email regarding the Zoning Board's proposed form based zoning ordinance. I think their work will reflect and address many of your concerns. Make sure to come to the meeting next Wednesday. The City installed a street sign under the metro-square arch to indicate that there is a street there...but other signage is certainly possible. I think the small mom-and-pop type retain establishments and the more corporate small businesses both add value in different ways. Take Cold Stone as a case study. A corporate retail franchise is much more sensitive to profit margins whereas a family business might be willing to absorb start-up costs while the business gets off the ground. This story isn't all doom and gloom though. Dotonbori, the new sushi place on Miner/Pearson has lines out the door on Friday/Saturday nights! If we position ourselves well right now there is no telling what our downtown might look like when the economy stabilizes.

February 6, 2010 | Registered CommenterAlderman Matt Bogusz

I can only comment on that which I see in retail. I've seen, & still see multi retail business failure in downtown Des Plaines. However, I also see retail success of great magnitude in other parts of Des Plaines two being Schwake Stones & Pesches. There are other businesses, which also, have picked a unique & needed area & are serving the public very well here. but are a bit out of sight. Perhaps, instead of concentrating on a consistently failed area we should look at how other distintive business can be brought here provioding a base for downtown, & at the same time engaging the many businesses that consistantly bring in people and revenue to the city.

February 8, 2010 | Unregistered CommenterE Cross

I realize this discussion is old, but I just came across it. I think the idea of a hotel in downtown Des Plaines would be a great idea. Many people in the area are looking for jobs. I would also suggest some type of 'shuttle' that would go from the hotel to the new Casino. Perhaps a small business could set something up wtih the hotel. Many hotels that are right by the Casino, are going to be packed when the new Casino opens. If there was a shuttle bus, that took the Casino -goers to the hotel (and back), it would bring a lot of business this way. People staying at the hotel may not be going to the Casino until later at night/evening, so they will spend their day in downtown Des Plaines. If word gets out there is a shuttle service that will take you directly from the Casino doors, to the hotel, word will spread fast.

It would be nice to see some more "mom and pop" shops in downtown Des Plaines as well. Tax breaks and rent breaks are always an incentive, especially to those small businesses just starting up with not a lot of cash. I myself, make personalized items that I sell on Ebay. I would love to open a small store one day, but with such high taxes in IL/Cook and all the issues around opening a business, it wouldn't work for me right now. Make it easier for the small guys to come out. After all, a lot of the small guys become big guys, which will evenutally generate a lot of money for Des Plaines. Now is the time to do this as that Casino will be open, we really should take advantage of it.

Thanks for reading,
Sandy

April 21, 2011 | Unregistered CommenterSandy S

Hey Sandy,

Thanks for the thoughtful post. I wish there was financing available for hotels in the Chicagoland area. A recent study showed that there was WAY too much hotel stock (far too many rooms for the demand) in the O'Hare corridor. This sort of reality has halted a few hotel deals near Manheim/Higgins. My guess is that new casino-centric hotels will be closer to the casino, but I like where your head's at.

Regarding opening a small business....I agree, times are tough and it's not an easy proposition. Small business owners have got to be brave but the City has a few programs to help. Namely the downtown storefront assistance program which offers $5,000 to assist with build-out for newly inhabited storefronts. Sadly, there is no silver bullet. We need to keep pushing with incremental improvements that will make us more competitive for when the market is strong.

Thanks again for contributing.

Matt

April 22, 2011 | Registered CommenterAlderman Matt Bogusz