The Chicago City Council signed off on a Class 6(b) tax incentive for Quality Armatures, an electronic motors manufacturer based in the 37th Ward, near the Austin/Belmont Cragin border. Emma Mitts, the ward’s alderman, introduced the measure. The council’s approval of the incentive clears the way for the Cook County Board of Commissioners to vote on the measure, although when that vote will take place isn’t clear.
During a recent interview, Rocco Rubino, Quality Armatures’ operations manager, said that the more than 40-year-old company will consider leaving the city where it was founded if it doesn’t receive the incentive.
Rubino said that the company applied for the incentive in order to expand its business and hire more workers.
He said that the company has always hired from the community and that it intends to keep things that way. Even though the incentive hasn’t been fully approved, the company was confident enough to go forward with renovations and hire three out of the six workers its planning to add if the county signs off on the incentive.
Quality Armatures, located at 5259 W. Grand Ave. in a small section of 37th Ward that jots out north of the Milwaukee District West Metra Line tracks, has been around since 1973. It has been at its present location since its founding. Rubino said that the company recently acquired an industrial property located right next to the factory at 5255 W. Grand Ave.
“We’re planning on opening a warehouse and keeping Quality Armatures [where it is],” he said. “We are expanding next door, but, at the same time, adding to the business.”
He said that the move will allow the company to expand into areas it wasn’t able to get into before due to lack of space.
“It’s going to be pretty much new business,” he said. “Right now, we don’t stock anything and we don’t sell anything. We will be able to stock stuff and resell.”
But turning a then-vacant building into a warehouse required considerable renovations, he said. That’s why the company asked for a Class 6(b) tax incentive.
In Cook County, different properties are taxed at different rates. Industrial properties like the 5255 W. Grand Ave. building are assessed at 25 percent. The Class 6(b) tax classification temporarily lowers the rate in order to encourage the construction of new industrial buildings or the rehabilitation of existing ones.
Under this classification, the property gets assessed at 10 percent of its market value for 10 years, 15 percent during the 11th year and 20 percent during the 12th year. Although it would automatically return to 25 percent on the 13th year, the property owner can apply for an extension and there is currently no limit on how many extensions property owners can receive.
According to the Cook County Assessor’s Office website, Quality Armatures successfully appealed to have the property value lowered from $61,370 to $20,203 for the 2016 tax year. This is before the Class 6(b) classification kicks in. Rubino said that the company expects to save $140,000 after the lower tax rate kicks in.