What tax impacts will the Amazon and Hampton Inn projects bring to Huntley?
HUNTLEY – With more construction developments underway, residents of Huntley may begin to wonder if such projects could bring some promising advantages in terms of tax revenues to the village.
It is known to some residents that certain developments in the area receive a type of tax break from the village, such was the case with the Weber Grill project. Dave Johnson, Huntley’s village manager, elaborated further on if this would be the case for Amazon.
“Regarding Amazon, there was no tax break, property tax abatement nor business development agreement approved as part of the project…In addition as you know, the Village does not establish the assessed values of property (this holds true for Amazon, Hampton and all property),” Johnson said via email correspondence.
“The Rutland Township Assessor will do that in the future; however, using Weber as comparable property one could estimate that there may be $800,000 in property taxes from Amazon once the property is fully assessed.”
To add, the location of the Amazon property falls within the boundaries of Community School District 300, therefore it will have no impact on taxes for District 158.
As for the Hampton Inn, the Village Board approved Ordinance (O)2020-07.48 on July 23, 2020, said Johnson, where it is expected that the developer Woodstock Hotel, Inc. will spend approximately $11.5 million to construct the four-story, 110-room hotel.
Outlined in the Business Development Agreement (BDA) between the village and the developer, there were a few tax rebates on the village’s part that were put into place as an incentive to assist the developer.
Village trustees voted to approve of an ordinance increasing the hotel accommodations tax from 5% to 7% of the gross rental or leasing charge per room.
In return, the village would then rebate 85% of the revenues received by the tax up to a maximum of $2.5 million. The village also agreed to rebate a portion of the property tax once fully assessed, up to a maximum of $150,000.
The village entered into a maximum rebate period of 15 years, with the total rebated amount to be a little over $2.6 million.
Based on the BDA, the hotel tax revenue is projected to generate $50,000 in the first year of occupancy and increase annually as occupancy rates increase to a projected level of $195,000 by the ninth year.
The village expects to receive 15% of that tax revenue, anticipating the first year to produce up to $7,500 in total revenue and increasing to $29,250 by year nine.
Estimated property tax for the village for the first full year of assessment is valued at approximately $6,000. However, the village would only collect 15% of that property tax revenue which amounts to Huntley only receiving $900 for that first year.
The property owner proposed that this project would expand employment opportunities and increase assessed valuation of the property, which would contribute to additional property taxes and enhance the village’s tax base by generating additional hotel tax revenues.
Village officials anticipate the Hampton Hotel to “serve as a catalyst to attract other businesses in proximity to the hotel.”
