The North Riverside village board has put off a vote to support a property tax relief incentive for the North Riverside Park Mall, one shopping center officials have said is necessary in order to make expansion of the mall’s movie theater possible.
In the works since 2015, both the mall and its movie theater operator, Classic Cinemas, want to double the number of screens. Such a project, however, could result in a significant alteration to that part of the mall, increasing its leasable space and, with that, its property assessment.
“We anticipate an increase in our real estate taxes with the improvements to the shopping center,” said Harvey Ahitow, general manager of North Riverside Park Mall, adding that the project will also come at a cost to both the mall, which is owned by the Feil Organization, and Classic Cinemas.
To soften that blow, North Riverside Park Mall officials would like to obtain a Class 7C incentive from Cook County. The incentive reduces the property assessment on the new construction, gradually increasing it from 10 percent of fair market value to 25 percent of fair market value over a period of five years.
But in order to have a chance at having Cook County approve such an incentive, the mall also needs formal support from the village of North Riverside.
Ahitow said expanding the theater will also benefit the village in the form of additional sales tax revenue and amusement tax revenue.
“The 7C was meant for projects like ours, that need tax relief for a period of time,” Ahitow said.
According to information on the Cook County Assessor’s website, the 7C incentive “is intended to encourage commercial projects that would not be economically feasible without assistance.”
While the village board’s finance committee at a May 14 meeting voiced strong support for passing a resolution on behalf of the North Riverside Park Mall to urge the county to approve the incentive, a scheduled vote on May 21 was pulled from the village board’s agenda.
North Riverside Finance Director Sue Scarpiniti and Mayor Hubert Hermanek Jr. said the vote was delayed because the village has not yet completed a financial analysis of the impact such an incentive would have.
“The original explanation to us was not as complicated as it actually is,” Hermanek said. “Before we jump in we want to go through it, because there’s a lot more ramifications than originally told to us.”
Granting the incentive would affect not just the village, but every taxing body that includes the mall property in its boundaries, such as Riverside School District 96 and Riverside-Brookfield High School.
With North Riverside soon to lose sales tax revenues from three major retailers leaving the village, officials face a difficult budget challenge in the 2018-19 fiscal year, which began May 1.
“It does have us putting a pause on any type of economic development incentives until we can address the replacement of those [businesses] first,” Scarpiniti said. “So there’s not a guarantee that the village won’t re-address this issue once we’ve got those retailers secured.”
In the meantime, Classic Cinemas and mall officials are trying to find alternatives to a major addition that would trigger higher property assessments.
Chris Johnson, CEO of Classic Cinemas says his company has largely abandoned the idea of building a major addition to the north side of the food court.
Instead, a new plan is afoot to expand the theater’s footprint largely within retail spaces that already exist adjacent to the movie theater. Doing so would require relocation of stores and would probably still require some kind of building expansion.
“We’re still bullish on it, but we have some work to do in moving existing tenants in two different spaces,” Johnson said. “The theater is still doing really well. Ultimately, we’re here for the long haul.”
Johnson said he believes the expansion could realistically be complete by the holiday season of 2019.
“We’re disappointed it’s taking so long, but at the same time, that’s the reality,” Johnson said.
