BY MIKE CETERA
It's a classic if-you-pay-them-they-will-come argument. Businesses won't naturally relocate to "unattractive" areas unless you give them a financial incentive to do so, the argument goes.
But should the taxpayers foot the bill for entrepreneurship? It's a philosophical question that has been debated in communities throughout the country as local governments get aggressive in recruiting new economic development.
Such is the case with a restaurant and bar proposal coming before the Aurora City Council Finance Committee.
At issue is $2.26 million of your money.
Restaurateur Phil Cullen wants to open a second location of his Ballydoyle Irish Pub in downtown Aurora. He has operated a pub of the same name for several years in downtown Downers Grove.
The Finance Committee is expected to discuss an incentive package today.
Those incentives...include $2.26 million from the city -- $1.26 million upon the issuance of a certificate of occupancy, and an additional $1 million over five years out of tax increment financing revenue.What city officials will get in return, they hope, is a catalyst for downtown development. City officials estimate that the pub could draw an additional 150,000 visitors to downtown each year. In Downers Grove, Ballydoyle helped to bring residential and commercial development to an otherwise stagnant downtown, and Mayor Tom Weisner hopes it can do the same in Aurora.
"We see this as one of the items we've been trying to accomplish for a while, as part of our overall plan for downtown," Weisner said. "It helps to pull people in regionally, and it adds to the ambiance of the city as a great place to live."
Incentives, of course, have been handed out throughout downtown in recent years. The city is pumping millions into the Shodeen project on the east side of the Fox River even before a single building has been constructed. Joe Vantreese also was promised millions in tax rebates for his River Street Plaza project.
Was it appropriate to guarantee TIF money for those projects? Is it appropriate now to do the same? I'm not sure of the answer, but I think it's time again to ask the questions. I haven't seen a broad-ranging conversation on financial incentives since the Stover administration.
Quote "But should the taxpayers foot the bill for entrepreneurship?" You make it sound like the taxpayers are paying for the whole thing. The developer of this project has to invest 8 to 9 million of his own money first. Not until there is a certificate of occupancy does he get anything. Yes we should invest our tax dollars to help better the city and create jobs revenue for the future. Hopefully there will be a time when the city is flourishing so that businesses will want to come here without incentives. But that hasn't happened yet and never will until we get businesses here. We all really need to look at the big picture.
Good post, Mike. I'll add a couple more questions:
Just how healthy is the downtown TIF? And the River City TIF? Why isn't all this incentive coming from the downtown TIF?
What if, considering the housing meltdown and talk of a general recession, both Shodeen and Vantreese go belly up? (Or one or the other?) Can the TIFs handle that? That's the scarier question.
I'd love to see those bigger questions answered before the City gives away money to a nightclub. Wasn't the Snuggery going to revive downtown several years ago? That was run by an experienced operator too. Bars have a huge failure rate and aren't exactly economic engines.
I think we need to ask the question, what if any development has occurred because of the redevelopment of the Roundhouse years ago? One look at the downtown illustrates the answer very well. I think a majority of Aurorans care more about their neighborhoods and the business districts near their homes (Farnsworth, Galena, Orchard, 59,etc.) rather than about the downtown. Yet this Mayor continues to pour millions into virtual sink holes. Have we yet seen the economic development strategy for this City? My guess is that it is a make-it-up as you go along strategy.
2.6 MILLION FOR AN IRISH PUB IN A LOCATION THAT IS DOOMED FOR FAILURE ?????? IT SEEMS LIKE SOMETHING I WOULD READ AT THEONION.COM (SATIRE).
The Roundhouse and Comfort Suites was supposed to be "the anchors". Nothing has been added... not the fault of Comfort Suites or the Roundhouse. Roundhouse has brought in over $58 million in sales and sales taxes. No TIF here. We didn't like the idea of depriving schools of tax revenue. (True story... after we did Riverwalk in Geneva... 2nd TIF in Illinois we realized tax money was not going to schools. We said it's okay here in Geneva but what if it was East Aurora? 15 years later... it was).
We also have a formula to repay the money invested by the City. City's portion of Sales Tax and Real Estate Taxes. We are on track to pay entire amount plus interest in 16 years (target was 20 years).
Whatever it takes for us to get good neighbors we are in favor of. We miss Fred Hoffman and hope City treats these guys better than they treated Fred Hoffman and us.
If Aurora thinks this new huge pub is good for Aurora they better take a real good look at all the failed eateries and taverns,and condos that have failed. Aurora must have a open check book and just dreams. There are more inportant things Aurora needs and they turn a blind eye.I have been downtown and its a ghost town and this new pub is not going to change it. Aurora should stop giving money to people who already have money, what about the small middle class guy.The person who wants to open this pub should fund himself and the city should stop spending my money like theres no end.I really love the part where he wants 80 parking spots just for himself but none of the other places downtown have any I wish the city would open there eyes and look around and see they will never make Aurora another Naperville,Geneva or St Charles it would be nice if this could be done but sorry to say its not going to happen. That building has had two owners and they both got funds from the city and they took the money and started a project that never came to be.I think that I would rather MY TAX Dollars go to the Police dept or Fire dept or the City workers which is way more inportant than another bar and eatery.I hope Aurora does not keep making the same mastakes over and over its time to finish the projects they have started and close the check book with my money in it.
Why is the City going to spend a couple of million dollars on a tavern in a terrible location ?
Looks like some more BIG Guns have come to Aurora again with money and there is no doubt the pub project will go thru and belly up just like all the other projects going on downtown Aurora gets real excited when money comes to town and they will give the pup whatever it wants,A irish pub in downtown Aurora give me a break,I remember when the cajun resterant open and was to be a upscale place that was a farce.Have the people in city hall lost there minds Aurora does not need another resterant or bar thats all Aurora has,I wish someone with vision could come up with a more diversied plan instead of the same old thing my tax dollars again will be wasted and I have no say to where it goes the people in city hall get to do that for me and I am sure a irish pup would my first choice,i dont think so.I hope the pub makes it seeing that it my tax dollars at work but I am a realist with common sense and common sense tells you its not going to work.I think city hall should clean up broadway and make all the buldings have the same type of facade which just might give you a feeling that this is a classy city, Please clean up broadway and just maybe someone will want to park if they can find a spot and I know when I drive down broadway there is know reason for me to stop and go sight seeing it is just awfull,Ithink the money could really help in this area not another bar.
Because they can do what ever they want,sorry your opinion means nothing to city hall only spending your Tax dollars for stupid things.
This is for all you negative naysayers: "Pub owner motivated by skeptics" Read the article. http://www.suburbanchicagonews.com/beaconnews/news/opinions/765308,2_4_AU30_EDIT_S1.article
This is how people with vision get things done. They take a chance. Every new business is a risk, nothing is guaranteed. What makes America great are the people who get off their azzes and do something other than complain.
Thats all find but let them use there millions not our tax dollars,if the big guns have that kind of money,they do not need to use our tax money.The only people who have visions are people with alot of money and clout,what about the small fish who has a visions and no money we need to help them start a business they do not have millions of there own and thats who the city should cater to .
The only reason people are negative about the pub is not the pub itself or his vision,its the fact his vision is using my tax dollars and I think everyone would agree go for it but please do not use my tax dollars.I hope his vision works out the way he wants it to but please use your own money not mine because I have visions of my own,only I do not have millions to make them happen, and if I did I would not use other hard working peoples money.
Once the Police vacate their building, that area will deteriorate quickly into a skid row type area. Vagrant-ville. The people in White Eagle ain't coming down there, sorry.
The many times I have been to Downer Grove it was a great place and it was not in the shape Aurora is.I am sure the pub did well there because the town has always been upscale. Aurora needs to do a little homework before they give away 2 milion dollars away in tax dollars.The Mayor Hopes that this pub will turn Aurora around,well with 2million dollars of our tax money I would like a little more than hope.We all hope the condo complex would work,we all hoped the new taverns,and the new eateries would work but as we all have seen they were here and now there gone,and I am sure they got incentives from the city its just a shame these places did not survive. The whole city needs to sit down with the people of Aurora and ask them what they would like to see downtown and what would make them come down.They need to go to close towns near us and ask what would make you come to Aurora for a vist.That should be step number#1 and get some idea what needs to be done to turn Aurora around,Just a little common sense that the people should be heard after all its there money.
MrX,boy did you hit the nail on the head why would any one go to Aurora to eat or drink your right not Oswego,Yorkville,Geneva why would they they have there own fine places to go they will only get Aurorans and that will only last for a shot time.
I understand that the new pub will be in the 80 year old building on new york street,but I would like to know where the river front property is at that they are talking about,is it the brick area behind the building where the brick area is? If so I thought that plaza behind his building is city owned and that everyone can enjoy it,or did the city sell him this area.Hope someone knows if the city sold him this property without anyone knowing about it. I belive it is called Tivoli plasa.
"But should the taxpayers foot the bill for entrepreneurship?"
"Just a little common sense that the people should be heard after all its there money."
These statements indicate that both the Beacon and the posters are ignorant on the financing of the project. Tax Increment Financing is a development tool that is commonly used. It uses taxes generated by this business to pay for the incentive. If they don't generate the taxes - they don't get paid. The city will not be using ANY residential property tax revenue to help make this project successful.
So taxpayers are NOT footing the bill and it is NOT your money. Beacon Editors, please try to get the facts straight and not mislead your readers.
CETERA RESPONDS:
Anonymous, I'm going to have to go ahead and disagree with you. Indirectly at least, it is taxpayer money because every time the city approves a TIF district, aldermen are essentially approving a tax hike for all residents. In the end, taxpayers are footing the bill. So they should have a say in who locates to TIF districts and how much money the city uses to "coax" those businesses to locate there.
See the Chicago Reader's excellent dissection of how TIFs work -- or don't. The series focuses on Chicago, but the lessons can be applied here.
From the series:
"OK, one more time—let’s review how this sucker works. When the City Council approves a TIF—always with Mayor Daley’s blessing—it freezes the amount of property tax dollars the schools, the parks, the county, and other taxing bodies get from that district for 23 years. If the schools were getting $100 from a TIF district when it was created, that’s roughly all they’ll get until the TIF expires. Any extra tax money, generated by rising assessments or new development, goes into the TIF fund, which Mayor Daley is free to use largely as he wants.
"Think about this. If the schools, parks, and county can only get $100 from a TIF district, what do they do when their expenses go up to $200? They have to raise their levies—the amounts they each get from the property tax pie—to compensate for the money diverted to the TIFs. When they do that, property taxes go up. No matter what the city tells you, TIFs are tax hikes, plain and simple—the more you create, the higher taxes go."
A tax is a tax. Why try to deny the obvious ? The people here are paying for the Irsih Pub folly.
Adding to the Scott Post above. After the Comfort Suites and the Roundhouse came to town (No Tif) The City changed what was the impetus for the development by moving Casino dollars to the Ward funds. While I know the Ward funds are vital for repairs of streets, sidewalks etc. Those gambling funds were earmarked for redevelopment of river towns like Aurora. Without those funds and the TIFs combined, there is very little incentive for anyone to develop in Downtown Aurora given the aforementioned track record. Other River Towns have flourished with the combination of those two incentives. Projects need to make sense to developers and to banks. Without the numbers penciling out, they cannot get the longterm funds needed to make the deal work. If you strip out the 2 million from the Irish pub deal, could he not buy a piece of land with a proven track record at a lower cost basis and build the same product in Naperville? Very easily. But it does not get you a 1st class operation like this in the desperatley needed redevelopment area of the Aurora Downtown. The longterm recovery looks promising. Once this and more come, the taxes that are generated both through sales and real estate not only sustain the Downtown, but add to the general fund for all other citywide expenses. I applaud all the risktakers like the Shodeens and the Vantrese's. The longstanding heros' in the Downtown like Johnno Galles, and I look forward to a long needed new neighbor in the Bally Doyle and wish them this Irish Blessing: May you be poor in misfortune, rich in blessings, slow to make enemies and quick to make friends. And may you know nothing but happiness from this day forward. Good luck folks and welcome to the New Aurora Downtown.
Rocky,
Thank you for your post; but you miss an important fact. The ward funds go towards improving the neighborhoods which indirectly leads to a better downtown if it is not surrounded by terrible looking areas on the way in.
The problem with the gambling money is all the non-profits, lawn mowers and now bonds that are being paid for it and NOT downtown redevelopment.
The ward funds get $4.8 million every year and the City collects about $15 million. Where did the other $10 million go? Not into the downtown.