August 9th, 2017 4:52 PM
It's been almost two years since Harrison Street Ventures purchased the long-troubled properties on Harrison Street once owned by Chris Kleronomos, but two of the larger properties remain vacant, and now the company says it needs help filling them.
Harrison Street Ventures partner and asset manager Mona Navitsky told the Oak Park Board of Trustees on Monday, Aug. 7, that her company is applying for a Cook County Class 7(c) Property Tax Incentive, which will reduce their tax burden over the next five years, for the properties at both 213-215 and 219-221 Harrison Street.
Navitsky said Harrison Street Ventures has a letter of intent from a brew pub to open at one of the properties, but the deal is contingent on the real estate firm getting the tax break.
The request, which was made through the Oak Park Economic Development Corporation, was for a resolution supporting the tax break, which ultimately will need to be approved by Cook County.
If approved by the county, the two properties, both of which are about 6,100 square feet, would have their tax assessment reduced from 25 percent of the market value – which is standard for commercial property – to 10 percent for three years, 15 percent for the fourth year and 20 percent for the fifth year.
Following the five-year ramp up, the assessment would return to 25 percent of the market value.
That would save Harrison Street Ventures a combined $200,000 over five years, according to OPEDC economic development manager Viktor Schrader.
That would result in a slightly lower take from the village on taxes collected from those properties, according to the resolution requested by OPEDC.
John Lynch, OPEDC executive director, said in the letter supporting the resolution that property taxes collected from the vacant buildings in 2016 were $17,735 for 213-215 Harrison and $20,345 for 219-221.
The lower tax amount is in part due to the vacant status of the buildings. The taxes on those two buildings – renovated, occupied and without the tax break – would be $37,414 for 213-215 Harrison and $36,783 for 219-221, according to OPEDC.
Those two amounts would drop to just under $15,000 for both properties in the first year with the tax incentive.
"We are aware that Harrison Street Ventures may be nearing a lease for 213-215 Harrison Street and that the tenant has expressed concerns about the long-term occupancy cost," Lynch wrote. "If this tenant moves forward, the cost reduction afforded by the Class 7(c) program will serve as a retention tool to allow this tenant to stabilize through the start-up phase."
According to OPEDC, the 213-215 building has been vacant for 30 years and the 219-221 building has been vacant for 15. The buildings, and others purchased by Harrison Street Ventures on that street in the Arts District, were bought in foreclosure in 2015 from Chris Kleronomos, whose family has owned the properties for many decades and who maintains a minority ownership stake in the properties.
The item originally was on the consent agenda for the Board of Trustees meeting, meaning that it was expected to be approved without discussion or a vote. However, it was moved to the regular agenda for discussion at the request of Trustee Dan Moroney.
Moroney, the only trustee who voted against the resolution, told Navitsky and the board that he was "skeptical about the long-term viability of these properties" if they needed such a large tax break to be successful.
"What happens when it goes to the market rate," he said, adding that "the incentive delays the inevitable."
Navitsky told the board that Harrison Street Ventures is investing "significant capital" – a combined $900,000 -- in the two buildings.
Schrader said the long-term vacancy of the two buildings make them a good candidate for the tax incentive.
Moroney argued that the parcels could be rezoned and marketed as residential property, noting the success of Flexhouse, Harrison Street Ventures' joint project with Ranquist Development Group to demolish properties at 200-210 Harrison and build four modern row homes.
To view the full print edition of the Wednesday Journal 2017 Answer Book, please click here.
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