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Granite City: Doing things differently

Granite City Mayor Michael Parkinson kicks off the inaugural Business Summit luncheon held on Oct. 25 at The MILL with its near-capacity crowd of regional attendees and supporters. (Melissa Crockett Meske/Illinois Business Journal)

 

By MELISSA CROCKETT MESKE
macmeske@ibjonline.com

Mayor Michael Parkinson hosted an inaugural Business Summit for the City of Granite City on Wednesday, Oct. 25. Featured speakers were Madison County Treasurer Chris Slusser, who is also running for the Madison County Board Chairman’s spot, and Granite City’s Economic Development Director Cathy Hamilton.

The luncheon gathering was held at the recently rejuvenated former church facility that has become The MILL, an event space and gathering hotspot in the city’s downtown at 1311 20th Street (at Delmar Ave.) Lunch featured a menu array provided by several of the local food and beverage establishments – an intentional move by city administrators to help highlight what can be found in Granite City.

“We’re going to talk about what property tax reform would really look like, what meaningful representative reform looks like in Illinois and how this might come about and be possible,” said Slusser at the launch of the Summit’s conversation and his part in it.

Madison County Treasurer Chris Slusser was the first of two guest speakers at the inaugural Granite City Business Summit held on Oct. 25 at The MILL in the city’s downtown. (Melissa Crockett Meske/Illinois Business Journal)

“First, I’ll brag about Madison County and some of the work we’ve done there; the fiscal discipline that we’ve shown in Madison County for the last seven years. So, for seven years in a row now, the county board has frozen tax credits. They’ve not asked for any additional money. And, as the property values have increased, that drove the [tax] rate down. Because, if you’re not asking for more money, and if the values are going up, the tax rate goes down. This is unprecedented,” Slusser pointed out.

“The problem we have here in Illinois: We have the second highest real estate taxes in the country. Only New Jersey is higher,” he said further. “That’s not a good thing. It’s not something you want to be a victim to. Real estate taxes in Illinois, and in Madison County, represent 6 to 9 percent of your home value or your business value, depending on where you live. There are alternatives [to levying property taxes] that have been shared, and exploited.”

He explained next about the concept of “PTELL,” or Property Tax Extension Limitation Law, and how an application of the concept in real practice would work before addressing its flaws and loopholes. “There’s been a lot of good information and misinformation shared,” Slusser said. “If it worked to perfection, PTELL may have benefits, but we all know it’s not going to work to perfection.” 

Slusser then introduced the Indiana Model for consideration, which involves capping real estate taxes, raising the state sales tax by one percent to fund school districts and local public safety departments, and the shifting of school operating costs as well as local police and fire pensions to the state.

“Indiana, 15 years ago, did a massive property tax reform,” Slusser noted. “They had the highest property tax in the country at the time, highest property tax rates. People, when they were retiring, couldn’t afford to stay anymore.” Slusser further shared that state and local leaders in Indiana noted that there was nothing to make the state competitive for retirees who might stay here but couldn’t afford to live in their homes. 

“So, Indiana did a massive comprehensive plan, it’s very brilliant, very well done, took a while to get it done,” said Slusser. “The first component is that they capped real estate taxes. They capped it at 1 percent of assessed value for homes, 2 percent for apartments, land, and agriculture, and 3 percent for businesses. They moved all school operating costs and local police and fire pensions to the state. And then they raised the state’s sales tax by 1%, because they figured that was the exact amount that they needed to still provide all that revenue. And because you can’t move all these things out and have no revenue replacement.”

“Indiana did a study, and 74% of the people in the states said they favored a sales tax over higher real estate taxes,” he added. “When paying sales taxes, consumers have a choice. You can go out of state, you can choose not to purchase something, you have options. With real estate taxes, you pay them, or your taxes are sold, and you can lose your property at some point.”

“Right now, a $200,000 home in Illinois on average pays $4,462 in property taxes. In Indiana, it’s $1,650. That is a massive difference. Schools are well funded in Indiana. Cities and villages are no longer crushed by their pensions — they’re getting help from the state, and people can afford to stay in their homes,” Slusser said further.

“What this would mean for us locally: A competitive advantage versus Missouri, help in retaining local businesses and residents, and it would drive economic development and recruitment,” he said. “We just have to all work together, and one of the things I’ve been working on with folks here is putting together a regional plan.”

“Property tax reforms can happen. It just has to start somewhere. And honestly, I think this is a 90-10 issue, where 90 percent of the public would be behind something like this,” Slusser concluded.

Granite City Economic Development Director Cathy Hamilton followed, sharing examples of the “unconventional” economic development practices that have led to success for the city so far. 

Granite City’s Economic Development Director Cathy Hamilton shares with attendees at the Oct. 25 inaugural Business Summit the city’s “unconventional” approach to economic development and how the numbers are showing strong results. (Melissa Crockett Meske/Illinois Business Journal)

“What we’re going to talk about today really is about our economic development program and how it’s different from anything else in the county. It’s also reflective of the goals of our new mayor’s administration and the vibrancy in the community that has started to be activated,” said Hamilton. She noted that what’s been happening is real cultural change, with a foundation from a strong mayoral structure, where economic development has shifted to “a market approach.”

“I think the first thing you have to do when you talk about change is understand the election of 2021. The amount of energy and excitement and desire to change was tremendous. And you felt that throughout the election. You felt it from the residents. You saw it on the Facebook page. You saw it in the conversations and the ideas expressed to the mayor and the debates that were happening,” Hamilton said. 

“I was with the previous administration of Ed Hagenauer. And as an institutional person that had an office for the changeover, it felt like that. It felt like an innovation. The energy, the desire to change, the noble, smart approach to, we’re not going to do it that way, really, really shocked me through the organization. And that’s how it felt,” she added.

“Two of the phrases that were said at City Hall that we have now decided to hate is: I was told to do it that way, and we’ve always done it that way. And that’s not acceptable in City Hall anymore,” Hamilton said further. 

“Understanding the commercial real estate market in your community, and regionally, is one thing that is critical that I don’t think a lot of economic development communities do,” Hamilton pointed out. “Really having a broader perspective is how to be a better economic developer; we use that in Granite City.”

Hamilton noted the decade-long growth along the 270 logistics corridor as one example. The corridor has seen growth in the warehousing industrial parks located there, impacted by online sales and declining retail and with continued trending demand. 

She further highlighted Konzen Court and the sale of the city’s 23-acre lot, accompanied by the expansion and retention of existing businesses on-site and the leasing deals negotiated for the vacant former Anheuser Busch facility.

Hamilton also talked about the site of Vega Trucking on Schaeffer Road, formerly Lowe’s, and the reuse of its 110,000 square foot building. She noted that, while the majority of the 582,000 square feet of big box retail reuses in Madison and St. Clair County have ended up as storage unit facilities or other office space that does not generate sales tax revenues, Granite City has managed to attract/retain 223,000 square feet of its commercial space as sales tax generating, thereby able to continue supporting the infrastructure. 

Recent downtown Granite City development has brought with it long-term leases, Hamilton shared, as well as created a diverse tenant mix and small business growth. Further, the city’s efforts to acquire and clean up the 38-acre site with its 12,000 square foot building where Weber Auto & Truck Center is located helped to replace the sales tax revenues lost when the former Shop n’ Save and Lowe’s stores were gone.

The Nameoki Commercial Corridor has seen improvements through investments as well. Expansion of the enterprise zone to attract more tenants is also a part of that, as was the city working with property owners to align with code compliance.

Hamilton’s part of the Business Summit presentation concluded with a slide on the big screen that read: “Nothing matters if the community is not financially stable enough to provide the services necessary for a healthy business and residential community.”

As the Summit ended, Granite City Mayor Michael Parkinson shared some concluding remarks. Among them, he noted that the city was in the process of selling its wastewater treatment plant to Illinois American Water. “It’s not economically feasible for us to maintain it,” he explained, while adding that the sale will help fund the city’s pension fund debt currently being faced. 

 

This story also appears in the November 2023 print edition of the Illinois Business Journal.

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