Read commenter “Reasonable’s” take on the unfairness of subsidies that Downtown Crystal Lake businesses have and tell me there isn’t some underlying tension building in the local business community:
It was under the Part 6 post on the Crysal Lake Civic Center Authority and the Raue Center/
@Steve Willson – The 30,000 that the city gives to the downtown association is also from the hotel/motel grant money.
I doubt that the downtown association grant money is tied into the Raue operation, however the Raue is an integral part of the downtown identity.
I am guessing that the the grant money given to the downtown association is used to run parades and festivals?
I believe that the downtown association also charges a membership fee however, there are many businesses in the downtown area that are not members, yet still benefit from all the perks, attention, and favoritism that the mayor and many city council members shower on this small shopping area.
The city subsidizes the operations of downtown business/building owners by building, purchasing, rebuilding parking lots for downtown merchants.
These are large capital expenditures paid for out of the general fund (funded by retail tax dollars collected by the city) that benefit only certain businesses – the downtown merchants.
The city also plows, resurfaces, and stripes these parking lots at no cost to the downtown merchants/building owners.
Businesses outside of the downtown area pay for these expenses themselves, as they should, because this is a normal cost of running a business.
The many service businesses that fill the downtown area contribute nothing to the general fund and are really getting a nice deal!
The thorny issue is the existence of several long-time downtown businesses that operated “just fine” with street parking.
It would not be fair to make them pony up for all parking lots and other expensive projects/improvements that are now part of the downtown’s budget.
But what about the bigger businesses that have opened up that the city has issued large parking variances?
The city’s “downtown agenda” has been an expensive journey and it would be nice to know if the downtown area has come anywhere near to repaying the investment that the city has showered on this area?
The downtown area is siphoning money from the general fund that could be used for other important project in Crystal Lake.
Corporate welfare should not exist in city government.
It divides the business community and has hurt businesses outside of the downtown area.
The city’s favoritism has even trickled down into influencing the NW Herald’s coverage of small businesses in CL.
There is never any coverage of long-time, successful small businesses outside of the downtown area, which is such a shame.
In my opinion, city government should never engage in any activity that favors “certain” businesses, while damaging others.
Small business owners do not mind competition, as long as it is on an even playing field.
The city’s subsidy of downtown has artificially shifted the playing field.
Even real estate taxes in the downtown area are ridiculously low compared to similar commercial properties outside of the downtown area.
Why is this? What can be done?
Other downtown areas fund their operations by setting up an SSA, special taxing district, installing meters, paid parking lots, or setting up some other equitable plan that charges businesses/building owners for the cost of their operations, parking lots and other maintenance/decorating/landscaping expenses.
Apparently, our mostly “townie” city council thinks that it is OK to open the city checkbook to subsidize their childhood shopping area because it makes them feel good?
Under the article comparing tax takes for Crystal Lake, Reasonable also left a related comment (some, but not all of the thoughts, are duplicative):
Retail tax income is put into the general fund which the city uses to maintain roads and apparently to subsidize the expenses of downtown CL merchants and building owners.
The home rule tax increase went into effect around the same time that the downtown TIF expired.
Since then, the city has built additional parking lots, purchased parking lots (from Home State Bank), and resurfaced parking lots (Brink Street) that only benefit downtown businesses at NO COST to these downtown businesses and building owners.
They even gave a national coffee chain additional outdoor seating at the request of the downtown association when the Brink St. parking lot was rebuilt.
Crystal Lake also plows/maintains all of these parking lots and provides landscaping services for downtown merchants at no cost to these private businesses and building owners.
It’s a thorny issue that the City probably cannot back away from because long time, existing businesses on Williams Street existed perfectly fine before all of the expensive downtown improvements were implemented.
But should a City be in the business of unfairly subsidizing the operations of private businesses and building owners in CL while businesses outside of the downtown district pay for all of these expenses on their own? What is the return on the City’s downtown investment?
I am guessing that the return is poor because downtown has filled up with service businesses – attorneys, yoga, salons, etc. that contribute nothing to the general fund because they do not generate significant retail sales dollars.
This is also incredibly unfair to long-time service businesses that have existed downtown for decades by allowing a plethora of competitors to set up shop within a 2 block area.
As Steve Willson pointed out in a previous article regarding the close proximity of the Raue to the Opera House, the close proximity of the same type of service businesses in the downtown area ensures that all do mediocre and none do well.
These weakened businesses cannot survive when there is an economic downturn and instead of a few businesses closing, you see many businesses fold up shop.
It also dilutes the fun shopping experience in downtown.
Downtown has been mismanaged in this way.
I have heard the argument that these businesses cannot survive without the city’s help.
If that is the case, they should not be in business, plain and simple.
Being in business is survival of the fittest and the City is probably propping up weak businesses.
I have also heard a downtown business owner (who is on the City EDC) complain about parking issues in downtown.
The parking lot on the corner of CL Ave. and Main Street is always empty.
I would like to suggest to this business owner that he should consider moving his business to another location (and pay his own parking lot expenses) OR build his own parking lot.
The other issue is the commercial property tax inequity in downtown buildings.
The City has created an unhealthy, “split” business community in Crystal Lake with their favoritism.
The home rule retail tax increase has made Crystal Lake less competitive and it appears as if they have used some of this increased income to subsidize a favored business district.