Village officials in Lincolnwood, Ill., are considering a self-storage tax as a way to generate additional local tax revenue and help offset a $260,000 shortfall from the state this year. The village is examining either a flat or progressive tax, which would impact one facility operated by The Lock Up Self Storage and two Public Storage locations within its boundaries. Officials postponed making a decision on enacting either tax during a meeting on April 5, according to the source.
The three Lincolnwood self-storage facilities have an occupancy rate of about 90 percent and comprise approximately 235,000 square feet in 2,000 units. They paid a combined $267,680 in property taxes in 2014, with 10 percent going to the village, according to information the source obtained from the Cook County, Ill., tax assessor.
A flat tax would be based on the number of units in each self-storage facility. If the village enacted a $5 monthly tax per unit, it would generate $120,000 in additional tax revenue each year, Doug Petroshius, assistant village manager, told the source. In contrast, a progressive tax would be applied to the net rentable square footage at each facility. At $1 per year per square foot, the village would generate about $235,000 annually.
The Illinois communities of Morton Grove, North Chicago and River Grove have imposed similar taxes on self-storage facilities, according to the source.
Lincolnwood officials would also prefer to attract businesses that generate more tax revenue than self-storage. If they forego the tax plan, officials have agreed to place restrictions on facilities, forcing developers to apply for special-use permits in commercial areas. "[Storage facilities] are a type of use that you don't want a high concentration of. We already have three in a 2.7-mile square radius," Tim Wiberg, village manager, told the source.
The Lock Up Self Storage is the operating brand of family-owned Lock Up Development Group, an affiliate of BRB Development LLC, which has offered self-storage services since 1976. The company currently operates 33 self-storage facilities in Connecticut, Florida, Hawaii, Illinois, Massachusetts, Minnesota, New Jersey and New York. It owns and manages more than 1.6 million square feet of storage space.
Public Storage Inc. is a publicly traded real estate investment trust. Based in Glendale, Calif., it has interests in 2,277 self-storage facilities in 38 states, with approximately 148 million net rentable square feet. Operating under the Shurgard brand name, the company also has 217 facilities in seven European countries, with approximately 12 million net rentable square feet.
Sources:
- Chicago Tribune: Lincolnwood Officials Postpone Decision on Self-Storage Tax
