Portillo's Agrees to Give Back Sales Tax Incentive
New Lenox agreed to give economic incentives to Portillo's, a deal that helped bring the restaurant to the village, but Portillo's announced it would give back the sales tax breaks. The additional revenue could go toward residents' property tax rebates.
Portillo's Restaurant wouldn't have come to New Lenox without receiving sales tax kickbacks that other communities offered.
But now, after getting to know the community and hearing that local restaurant owners were upset with the incentives, Portillo's President Dick Portillo agreed to give back the sales tax rebate.
"He realized they wouldn't have come here without the incentive, but he told me he likes the way we do business," Mayor Tim Baldermann said. "He's just an unbelievably generous man."
At the April 9 Village Board meeting, trustees approved an economic incentive agreement that will give back about $60,000 in sales tax revenue generated by Portillo's, which plans to open this fall in a lot by Target and Lowe's.
The agreement was set to last seven and a half years. Even after that incentive, the village conservatively estimates it will get an additional $100,000 in sales tax revenue from the addition of Portillo's.
Greater Property Tax Rebate?
What does this mean for the village? An estimated $450,000 in additional sales tax revenue over the life of the original agreement. Baldermann said he will propose Monday to see how much additional tax revenue Portillo's brings in and put that toward the village's property tax rebate program.
When the village asked residents to give it home rule status in 2008, thus increasing sales tax by 1 percent, officials promised to rebate 33 percent of residents' property tax bills. The percentage rebated quickly rose to 40 percent and then 50 percent.
Now, that percentage could increase again because of this deal, and Portillo said the property tax rebate was something that impressed him about New Lenox.
"The property tax rebate is a commendable program, which I support 100 percent," Portillo said in a village news release. "That is why I called the mayor today to let him know that Portillo's would build its restaurant in New Lenox without the benefit of the economic tax incentives that led us to choose New Lenox in the first place."
Baldermann said Portillo also saw the concerns of local restaurant owners, who on Wednesday called a meeting with the mayor to voice their opposition to the tax incentives. Baldermann said he would still meet with the businesses to explain the reasoning of such incentives.