Ald. Emma Mitts (37th) recently proposed a resolution that would require companies that apply for Class 6(b) tax incentives, and are located within a city growth zone, to show that they will bring in at least 12 full-time jobs. The resolution doesn’t specify where the people who get those jobs need to live.
The resolution, which was approved by the City Council during an April 19 meeting, replaced an earlier proposal that Mitts introduced that would have required Class 6(b) incentive-seeking companies to create a “significant number” of jobs, the number of which wasn’t specified. In addition, that original ordinance applied to companies across the city, not just ones located in growth zones.
Launched by Cook County and the City of Chicago last July, growth zones are distinctions applied to industrial areas that haven’t seen much development in recent decades. Companies within those zones receive numerous advantages, such as the streamlining of the Class 6(b) application process and support with finding local hires.
There are two growth zones on the West Side — the Northwest Industrial Corridor and the Roosevelt-Cicero Industrial Corridor, which roughly correspond to the areas covering the Tax Increment Financing districts of the same names.
In a statement, Mitts said that that she wanted to use the resolution she introduced as a way to support the growth zones. Mitts insisted that the new ordinance will achieve the same results as the original one.
In Cook County, different properties are taxed at different rates, and industrial properties are assessed at 25 percent. The Class 6(b) tax classification temporarily lowers the tax rate for businesses looking to construct new industrial buildings or rehabilitate existing ones.
Under the 6(b) tax classification, the property gets assessed at 10 percent of its market value for 10 years, 15 percent during the eleventh year and 20 percent during the twelfth 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 properties can receive.
The Cook County assessor makes the final decision on whether to grant the incentive. But before the assessor considers the application, it must be approved by a legislative body of the municipality where the property is located.
According to the Chicago City Clerk’s legislative records, Mitts supported a total of two Class 6(b) applications in the last seven years, one of which failed to pass.
In Mitts’ original resolution, the Chicago Department of Planning and Development is required to review each Class 6(b) application to determine whether the incentive would result in development. The department would have had to consider whether or not the applicant’s plans for the property would “provide significant present and future employment” and ultimately generate “significant” revenues for the city in terms of property taxes, among other taxes.
Mitts said that the original resolution was part of her push to bring more jobs to the community.
“[I] helped a lot of companies expand and add jobs,” Mitts said. “But on the other hand, I’ve also heard all of the excuses for why it doesn’t make sense for some companies to move here.”
The statement went on to say that bringing in manufacturing jobs in particular was important to her, given how many of those jobs the city has lost in the past decade.
Mitts indicated that she thought that, ultimately, the substitute resolution would accomplish the same goal as the original.
“We’ve streamlined and improved the process through the initial resolution and substitute resolution I introduced into City Council to accelerate this much-needed business development process on the South and West Sides of the city, where reinvestment always needs an additional stimulus,” she stated.
“In many ways, we feel that these incentives are going to spur investment and create industrial jobs, which are good jobs you can raise a family on.”