McHenry County mayors talk rental housing, grocery tax: ‘Not a small amount of money’

Richmond won’t be affected much when Illinois stops charging a 1% grocery sales tax, Village President Toni Wardanian said, as there are not really grocery stores in town.

But Richmond is the exception to the rule.

Municipalities have until October to decide whether they will continue the 1% tax on groceries when the state grocery tax stops Jan. 1. The state would continue to collect the tax and send it back to the towns, based on grocery sales within their borders.

Richmond likely will not enact the tax locally, Wardanian said, but she noted Thursday that other towns with large grocery stores will miss out on “millions of dollars” they now rely on for “regular old operational expenses” if they do not vote to charge that tax locally.

Wardanian joined leaders from Crystal Lake, Lake in the Hills and McHenry to speak to the Women’s Council of Realtors Elgin Area/McHenry County Network at the group’s annual mayoral panel. The local leaders touched on the grocery tax, as well as housing developments in each community.

“I know the municipalities are getting a bad rap for instituting these taxes to recoup those dollars, but the state never, ever put this into their budget, so for them to get rid of it was no big deal,” Wardanian said. “For it to be missing from budgets on these small villages and cities, it is a tremendous deal.“

The funds never went into state coffers – they went directly to the communities where the groceries were purchased and the dollars spent, she said.

For Crystal Lake, the grocery tax amounts to $2 million a year, Mayor Haig Haleblian said, adding that money can go to unfunded, state-imposed mandates such as replacing lead water pipes, and “$2 million goes a long way to help us out.”

Crystal Lake’s City Council will vote on the tax, Haleblian said, and “we are going to keep the grocery tax unless the City Council decides against it. That is not a small amount of money, and we have to deal with it.”

For McHenry, the grocery tax brings in about $1 million annually, Mayor Wayne Jett said. “It is not that easy” to just cut $1 million from the budget, particularly as McHenry is saving up for its portion of the Route 31 widening costs, he said.

“Taking $1 million out of the budget is unrealistic,” Jett said.

All four municipality leaders also talked about housing in their communities. Richmond is looking for townhomes and senior-friendly residences, Wardanian said. The larger community leaders said that although there are single-family projects in the works, developers want rentals and apartments.

The housing market in Crystal Lake isn’t just hot, Haleblian said, “it is white hot,” with houses going for over the asking price. At the same time, his council is getting pushback about the number of apartments going up, “but that is where the market is,” he said. “These apartments are filling up.”

Water’s Edge, currently under construction along Route 14, already has 20 units filled and 20 already committed to renters even though they are unfinished, he said.

Lake in the Hills, which at one time in the early 2000s was one of the fastest-growing communities in the state, just saw a proposal for 24 single-family homes.

“We haven’t had a new residential development in 20 years,” Village President Ray Bogdanowski said. In the last few months, two developers have come to the village “with sketch plans,” and a third is expected soon, he said.

His village also is looking at its 1½ miles along Route 47 for future development. “We are imagining that as mixed use,” including retail and pedestrian paths connecting to existing trails, Bogdanowski said.

Commercial development needs residential development to succeed, “and we keep that in mind,” Bogdanowski said.

McHenry also has seen a rise in rental housing, including the 540-unit Fox Meadow Apartments on Route 31 on the south end of town, and plans for 180 units by Redwood on the far northeast side. McHenry also has had a recent proposal for apartments at the long-empty First Midwest Bank at 3510 W. Elm St., Jett said.

Builder Lennar also has pitched almost 600 homes on 304 acres at Bull Valley and Curran roads. That is expected to come back to the City Council in the next few months, Jett said.