With the City Council already having dug us even deeper into its 2009-10 budget hole by throwing extra public money at private organizations which invoke their 501(c)(3) not-for-profit status to justify their perennial money-losing performances, we thought it worthwhile to bring some attention to what could become another financial black hole for Park Ridge taxpayers.
As reported by both local newspapers during the first week of this month, a board member of the 501(c)(3) Kalo Foundation of Park Ridge [pdf] is looking to buy 720 Garden Street – most recently, the home of American Insurance but unofficially re-named the “Clute House” by the Kalo-ers – for a “Park Ridge Non-Profit Center” to house our community’s non-profit organizations.
Ironically, the Kalo board member driving this plan is none other than John Sasser, who in the waning days of last month’s mayoral campaign tossed a cool $1,000 into the political war chest of former Mayor Howard “Let’s Make A Deal” Frimark [pdf], whose semi-secret attempt to negotiate the City’s purchase of that very same property for a new police station was “outed” by then-alderman, now Mayor Dave Schmidt.
At the time, Frimark and his Alderpuppets howled like banshees about Schmidt’s disclosure, falsely accusing Schmidt of violating the non-existent confidentiality/secrecy of “closed session” City Council meetings. But when the city attorney opined that nothing in the Illinois Open Meetings Act prohibited such disclosures, or provided any sanctions against it, Frimark cooked up a silly, kangaroo-style “condemnation” of Schmidt – which infuriated many citizens and may well have helped propel Schmidt into the mayor’s office.
Well done, Howard!
But back to Sasser’s plan. According to the Park Ridge Journal article (“Kalo May Buy Historic Clute House,” May 6), Sasser is “trying to set up financing to purchase the building directly as a non-profit.” Sasser calls his plan “a leap of faith.”
Sounds to us more like a white elephant in the making.
Right now, we understand that 720 Garden is generating a nice chunk of property taxes each year which benefits the City, the Park District and, to an even greater degree, School District 64. But if that property is purchased by a non-profit, in all likelihood that tax revenue will disappear because non-profits in Illinois are eligible for tax-exempt status.
And judging by past and current City Council practices, the non-profits who would own and/or occupy 720 Garden would soon be asking – and getting – tax dollars from the City to keep that building open and operating. So, once again, Park Ridge taxpayers would be providing welfare to a bunch of private organizations, many of which are run like hobbies instead of businesses.
What’s Sasser’s angle (because there’s always an “angle” with deals like this)?
We’re not sure, because we don’t know all the tricks of the real estate trade, or the various ways that property can be leased, optioned or otherwise managed so that it can be purchased at its currently-depressed market price using the currently-low financing rates, carried on a non-profit basis while the real estate market recovers, and then sold off for a tidy profit when the market recovers, and/or when the Uptown Redevelopment plan eventually moves down there to Target Area IV.
We here at PublicWatchdog believe that taking any private property off the tax rolls is bad public policy unless it is absolutely necessary for an over-riding public purpose. And that policy becomes even worse in practice when the taxpayers also end up paying for the operation and upkeep of the tax-exempt property, via City welfare payments to those organizations.
We’re already being fleeced by a TIF District that has sucked millions out of City coffers while providing only promises of profits to come. We don’t need to add to that problem by taking a revenue-producing property off the tax rolls in that District.
8 comments so far
I don’t get this. Why would a Kalo board member buy the American Insurance building instead of the Kalo House?
I also agree that taking commercial property out of the tax rolls for the TIF isn’t smart.
Anonymous @ 9:41 AM
According to the Herald-Advocate’s May 4 article, the Kalo Foundation is trying to raise the money to purchase and preserve the former Kalo Shop at 322 Grant Place.
Sasser, on the other hand, is more interested in 720 Garden than the Kalo shop, and the excuse he makes is that the Kalo Shop is too small and doesn’t have the necessary parking to serve as a non-profit meeting space.
That explanation smells like a week-old carp on a mid-July day.
Once again, PubDog, an excellent post making an excellent point. Taking taxable property off the tax rolls is bad policy and worse execution.
Why this guy Sasser, a Kalo board member, is buying Clute House instead of the Kalo building is beyond me, but it sure doesn’t sound right. And you’re right: they will keep coming to the City for money because, from their 990, they have no idea of how to make any of their own.
ASA bought the property at Greenwood and Busse/NW HWY. If they build a museum/library there or an educational facility for anesthesiologists=then this site may also come off the tax rolls. Both a museum and educational facilty would be a c3 and then could be granted exemption from real estate taxes. That would be another loss to the PR revenue base.
If Sasser (or any other person) is buying property in Target Area 4, it’s because they are looking to make a buck. This ain’t about non-profits.
Anonymous 05/30/09 – 9:47
You are exactly right. Welcome to a lesson in the school of Billy Napleton Real Estate. If the town wouldn’t give him $400K and buy his other property then he’ll put the screws to you for decades to come. He never cared who he sold to just so long as he got his flip profits.
Napleton’s concern for the interests of Park Ridge could fill a thimble and there would still be room for a cotton ball.
Or perhaps as a business man he sold his property to an interested party. Did you just expect him to hold onto it??
Anon,
As usual, you read the words but failed to understand the message.
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