While the village of North Riverside attempts to catch its breath after learning that its single-largest sales tax generator is leaving town, it’s a good time to reflect on a couple of things.
There’s been some chatter that the village bungled the Edward Don situation by not offering the company enough in incentives to stay on at their home of four decades in North Riverside. This ignores a couple of realities.
Edward Don’s lease agreement for the property at 2500 Harlem Ave. is not with the village, but with a private real estate partnership that wants to raise the company’s rent and make improvements to the aging building.
This day was inevitable the moment that Edward Don was outbid for the property by the partnership. So in many ways, this is a private real estate matter in which the village of North Riverside can’t do much but sit on the sidelines and hope its accumulated goodwill holds out.
Of course, the village could have tried to work out some sort of incentive plan to keep Edward Don in town. Based on what Woodridge finally agreed to, that figure is around $10 million over 30 years. Woodridge is reimbursing Edward Don 75 percent of sales taxes it is paying for the first five years of the deal. Then for the next 15 years, it will be reimbursed 50 percent – a deal which can be retained for 10 more years after that if the company agrees to an option extending the lease.
Oh, and Woodridge is capping utility taxes at $1 million and is forgiving all building permit fees. How on earth was North Riverside supposed to compete with that kind of offer? Edward Don got itself a sweet deal, and it’s taking it. This is no surprise.
And if by some chance North Riverside was able to come up with a giant package of incentives to keep Edward Don, the opposite criticism would have been leveled – that the village was doling out corporate welfare while its residents bit the bullet in a tough economy. And it still would have been losing money just to keep the business.
Where North Riverside can be criticized is in its past decision to use sales taxes to help subsidize services that residents and others should have been paying for all along – from water to waste hauling to vehicle stickers to retiree and elected official health insurance.
Because if the Edward Don move teaches any lesson, it’s that the presence of large sales tax producing commercial districts and businesses can cut both ways. Businesses come to North Riverside for the low property taxes and business-friendly conditions, but they can easily leave if they find a better deal elsewhere.
The loss of Edward Don is going to create a huge hole in the village’s revenue stream, one that’s going to be hard to replace. What the village needs to do now is to work with the owner of the Don property to try to line up a suitable retail replacement to inhabit that 20-acre site.
Succeeding there is critical for the village, or residents may begin to see the kinds of service cuts that North Riverside has so far been able to avoid.