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TO: Mayor Richard C. Irvin
FROM: Trevor Dick, Assistant Director of Economic Development
Martin Lyons, Mayor's Office of Economic Development
DATE: September 23, 2021
SUBJECT:
An Ordinance Increasing the Business District Retailers’ Occupation Tax Rate and the Business District Service Occupation Tax Rate Imposed in Ordinance 19-058, as Amended by Ordinance 19-063, Within the Boundaries of the Aurora Pacifica Square Business District No. 1.
PURPOSE:
In order to amend a business district tax rate, the City must complete three steps: 1). adopt an ordinance proposing the rate change (legistar item 21-0723); 2). provide notice by publication at least twice of the proposed change and schedule a public hearing (attached); and 3). adopt an ordinance authorizing the rate change (Item 21-0410).
BACKGROUND:
The Pacifica Square Business District was established in 2019 with a tax rate of 0.25%. The maximum rate allowable is 1.0%. The developer of the Pacifica Square Mall and all the improvements thereof has established many new businesses in the mall and has requested that the tax rate be increased from 0.25% to 0.50%. Revenues associated with this increase will be completely devoted to the payment of private debt for this improvement as well as future plans for the second phase of the development at Pacifica Square.
DISCUSSION:
On September 3, the Committee of the Whole authorized the placement of Item 21-0410, an ordinance authorizing the rate change from 0.25% to 0.50% on the City Council's consent agenda. On September 14, the City Council adopted the ordinance attached to item 21-723, setting a hearing date for a hearing on the rate increase on September 28. Because the implementation of this change first requires adoption of an ordinance proposing the change (legistar item 21-0723) and a public hearing on the proposed change, Item 21-0410 was put on the consent agenda of City Council meeting of September 28. The required public hearing will also occur on September 28, prior to the Council's consideration of its consent agenda. In between meetings, staff caused notice of the passage of this ordinance and the public hearing on September 28 to be published twice, as required by law.
IMPACT STATEMENT:
The increase of the Business District Retailers’ Occupation Tax Rate and the Business District Service Occupation Tax Rate will provide funding for capital and debt service needs resulting from development costs incurred within the Business District.
RECOMMENDATIONS:
Staff recommends the approval of the ordinance increasing the Business District Retailers’ Occupation Tax Rate and the Business District Service Occupation Tax Rate imposed in Ordinance 19-058, as amended by Ordinance 19-063, within the boundaries of the Aurora Pacifica Square Business District No. 1.
CITY OF AURORA, ILLINOIS
ORDINANCE NO. _________
DATE OF PASSAGE ________________
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An Ordinance Amending the Business District Retailers’ Occupation Tax Rate, the Business District Service Occupation Tax Rate and the Hotel Operators' Occupation Tax Rate Imposed in Ordinance 19-058 Within the Boundaries of the Aurora Business District No. 1 (Pacifica Square Business District).
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WHEREAS, the City of Aurora has a population of more than 25,000 persons and is, therefore, a home rule unit under subsection (a) of Section 6 of Article VII of the Illinois Constitution of 1970; and
WHEREAS, subject to said Section, a home rule unit may exercise any power and perform any function pertaining to its government and affairs for the protection of the public health, safety, morals, and welfare; and
WHEREAS, Section 11-74.3-1(1) of the Illinois Business District Development and Redevelopment Law, 65 ILCS 5/11-74.3-1, et seq. (“Law”) allows a municipality to determine that it is “essential to the economic and social welfare of the municipality that business districts be developed, redeveloped, improved, maintained, and revitalized, that jobs and opportunity for employment be created within the municipality, and that, if blighting conditions are present, blighting conditions be eradicated by assuring opportunities for development or redevelopment, encouraging private investment, and attracting sound and stable business and commercial growth;” and
WHEREAS, on August 27, 2019, the Mayor and City Council of the City of Aurora (“City”) approved Ordinance No. 19-057, entitled “An Ordinance Designating Aurora Business District No. 1 (Pacifica Square Business District),” designating the Aurora Business District No. 1 (Pacifica Square Business District) (“Business District”) as a business district pursuant to the terms of the Law; and
WHEREAS, on August 27, 2019, the Mayor and City Council of the City approved Ordinance No. 19-058, entitled “An Ordinance Imposing a Business District Retailers’ Occupation Tax and a Business District Service Occupation Tax Within the Boundaries of the Aurora Business District No. 1 (Pacifica Square Business District)” (“Tax Ordinance”), in which the City levied a retailers’ occupation tax, a service occupation tax and a hotel operators’ occupation tax within the Business District under the Law at the rate of one percent (1%); and
WHEREAS, on September 24, 2019, the Mayor and City Council of the City approved Ordinance 19-063, entitled “An Ordinance Amending the Business District Retailers’ Occupation Tax Rate, the Business District Service Occupation Tax Rate and the Hotel Operators' Occupation Tax Rate Imposed in Ordinance 19-058 Within the Boundaries of the Aurora Business District No. 1 (Pacifica Square Business District)” (“Amended Tax Ordinance”), in which the Tax Ordinance was amended to lower the rates of the retailers’ occupation tax, the service occupation tax and the hotel operators’ occupation tax within the Business District under the Law from one percent (1%) to one-quarter of a percent (0.25%); and
WHEREAS, the owner of the property within the Business District requested that the City increase the rates of the retailers’ occupation tax and the service occupation tax within the Business District under the Law from one-quarter of a percent (0.25%) to one-half of a percent (0.5%); and
WHEREAS, on September 14, 2021, the Mayor and City Council of the City approved Ordinance 21-047, entitled “An Ordinance Proposing an Increase to the Business District Retailers’ Occupation Tax and the Business District Service Occupation Tax Within the Boundaries of the Aurora Pacifica Square Business District No. 1,” in which the City set a public hearing on September 28, 2021 regarding the proposed increase in the rates of the retailers’ occupation tax and the service occupation tax set in the in the Amended Tax Ordinance within the Business District under the Law from one-quarter of a percent (0.25%) to one-half of a percent (0.5%); and
WHEREAS, the City is authorized to increase the rates of the retailers’ occupation tax and the service occupation tax in the Business District after giving notice and holding a hearing under Section 11-74.3-2(f) of the Law, 65 ILCS 5/11-74.3-2(f); and
WHEREAS, the City caused notice of a hearing on the proposed increase to the rates of the retailers’ occupation tax and the service occupation tax in the Business District in the Aurora Beacon, a newspaper of general circulation in the City, on September 15, 2021 and September 16, 2021; and
WHEREAS, on September 28, 2021, the Mayor and City Council of the City held and finally adjourned a hearing on the proposed increase in the rates of the retailers’ occupation tax and the service occupation tax set in the in the Amended Tax Ordinance within the Business District under the Law Ordinance from one-quarter of a percent (0.25%) to one-half of a percent (0.5%); and
WHEREAS, it is in the public interest that the Mayor and City Council of the City increase the rates of the retailers’ occupation tax and the service occupation tax set in the Amended Tax Ordinance within the Business District under the Law from one-quarter of a percent (0.25%) to one-half of a percent (0.5%) for the planning, execution and implementation of the Business District plan and to pay for Business District costs.
NOW, THEREFORE, BE IT ORDAINED by the City Council of the City of Aurora, Illinois, as follows:
SECTION 1: The preambles of this ordinance are hereby incorporated as though fully set forth herein.
SECTION 2: That the Tax Ordinance, as amended by the Amended Tax Ordinance, is hereby further amended as follows:
Amendment One. Section 1(G) of the Tax Ordinance, as amended by the Amended Tax Ordinance, is hereby amended in its entirety and shall read as follows:
That in light of Subsection F. above, the City should impose a Business District Retailers’ Occupation Tax upon all persons engaged in the business of selling tangible personal property at retail within Aurora Business District No. 1 at the rate of one-half percent (0.50%) of the gross receipts of sales made in the course of said business, pursuant to and in accordance with 65 ILCS 5/11-74.3-6.
Amendment Two. Section 1(H) of the Tax Ordinance, as amended by the Amended Tax Ordinance, is hereby amended in its entirety and shall read as follows:
That in light of Subsection F. above, the City should impose a Business District Service Occupation Tax upon all persons engaged in the business of making sales of service within Aurora Business District No. 1 who, as an incident to making those sales of service, transfer tangible personal property within Aurora Business District No. 1, either in the form of tangible personal property or real estate, as an incident to a sale of service, at the rate of one-half percent (0.50%) of the selling price of tangible personal property so transferred, pursuant to and in accordance with 65 ILCS 5/11-74.3-6.
Amendment Three. Section 2 of the Tax Ordinance, as amended by the Amended Tax Ordinance, is hereby amended in its entirety and shall read as follows:
That pursuant to 65 ILCS 5/11-74.3-6(b), a Business District Retailers’ Occupation Tax is hereby imposed upon all persons engaged in the business of selling tangible personal property within Aurora Business District No. 1, other than an item of tangible personal property titled or registered with an agency of the State of Illinois, at retail within Aurora Business District No. 1 at the rate of one-half percent (0.50%) of the gross receipts from the sales made in the course of such business. The tax imposed herein shall be in addition to all other applicable taxes. Said tax may not be imposed on food for human consumption that is to be consumed off the premises where it is sold (other than alcoholic beverages, soft drinks, and food that has been prepared for immediate consumption), prescription and nonprescription medicines, drugs, medical appliances, modifications to a motor vehicle for the purpose of rendering it usable by a disabled person, and insulin, urine testing materials, syringes, and needles used by diabetics, for human use.
Amendment Four. Section 3 of the Tax Ordinance, as amended by the Amended Tax Ordinance, is hereby amended in its entirety and shall read as follows:
That pursuant to 65 ILCS 5/11-74.3-6(c), a Business District Service Occupation Tax is hereby imposed upon all persons engaged in the business of making sales of service within Aurora Business District No. 1, who, as an incident to making those sales of service, transfer tangible personal property within Aurora Business District No. 1, either in the form of tangible personal property or in the form of real estate as an incident to a sale of service, at the rate of one-half percent (0.50%) of the selling price of tangible personal property so transferred within Aurora Business District No. 1. The tax imposed herein shall be in addition to all other applicable taxes. Said tax may not be imposed on food for human consumption that is to be consumed off the premises where it is sold (other than alcoholic beverages, soft drinks, and food that has been prepared for immediate consumption), prescription and nonprescription medicines, drugs, medical appliances, modifications to a motor vehicle for the purpose of rendering it usable by a disabled person, and insulin, urine testing materials, syringes, and needles used by diabetics, for human use.
SECTION 3: That the City’s Chief Financial Officer, or his or her designee, is hereby directed to file a certified copy of this Ordinance with the Illinois Department of Revenue, on or before October 1, 2021.
SECTION 4: That all parts of the Tax Ordinance, as amended by the Amended Tax Ordinance, not amended herein shall remain in full force and effect.
SECTION 5: That this Ordinance shall be in full force and effect from and after its adoption, approval and publication in pamphlet form as provided by law.