By Dermot Connolly
The Palos Heights City Council is considering creating a tax-increment financing district to generate funding to update the Harlem Avenue business district.
Mayor Bob Straz discussed that during a wide-ranging State of the City address to the Palos Area Chamber of Commerce on March 26 in the Palos Heights Recreation Center. Palos Park Mayor Nicole Milovich-Walters was also there, and said she was looking forward to giving her first State of the Village address in April.
“So many things are positive in Palos Heights,” said Straz, setting the tone for his speech at the lunch meeting. “This is all about the quality of life in Palos Heights.”
He said the city, which is marking its 65th birthday in April, is financially strong, and detailed business and economic development plans designed to keep it that way.
“Unlike many communities, we don’t have a commuter train line going through our business district on Harlem Avenue. Ours is a mile west. But we have done pretty well without that,” he said.
The Harlem Avenue business district is centered around 123rd Street but stretches between Route 83 and 127th Street. Straz pointed out that many specialty clothing and retail stores have been replaced by diverse restaurants.
“We don’t have chains, but local entrepreneurs,” said the mayor. “Their popularity creates its own problems, with traffic flow, parking and connectivity.”
“We also need to update the 1960s-era facades along Harlem,” he said. “We have so many individual property owners, it is hard to get them all to agree on something. But it is easier if you are going to pay for it.”
In April, the city will begin receiving revenue generated by the 1 percent Business District tax that they started collecting this year. The tax money and any TIF revenue is meant for a wide range of improvements, including parking availability, signage and appearance.
“It is hard for many seniors to walk from the municipal lot to Capri (restaurant),” about a block away,” said the mayor.
He said a consultant is looking into the viability of a TIF district encompassing the Harlem Avenue business district and stretching west on Route 83 to the Lake Katherine Nature Center, which he called “a jewel of the southwest suburbs.”
“Before going ahead, we have to talk to all the taxing bodies. We want to get their support,” said Straz. During the typical 23-year life of a TIF, any increase above the starting tax base generated in the area is reinvested in improvements.
The mayor pointed to a graph showing how the city’s general fund balance grew from about $500,000 in 2003 to nearly $6 million in 2023. It was just $250,000 when Straz took office in 2001. About 70 percent of the general fund goes into capital funds each year to pay for improvements and maintenance.
“With Palos in Heights going to be 65 years old next month, our infrastructure is getting old and needs to be replaced,” he said.
“We have gotten $11.8 million since 2001 in grants,” said Straz. “Over the last 10 years, we have averaged almost $600,000 in road improvements annually.”
While Palos Heights has had budget surpluses for most of the last 20 years, Straz cited some impending financial issues that may make a TIF attractive.
The mayor said these include Gov. JB Pritzker’s stated intention to “cut away the 1 percent sales tax we get on groceries” and general sales.
“He suggested we create our own sales tax, but we can’t do that. We are not home rule. It would have to go to referendum,” the mayor explained. “We could lose approximately $350,000 a year, starting in July—halfway through our budget year.”
“We also made agreements with these new businesses coming to town to share some of the tax revenues with them. If there is none, we will have to share some of our own revenues to fulfill our agreements,” he added.
Among the new businesses is Pete’s Market, which purchased the long-vacant, former Dominick’s store at 6401 W. 127th St. and the adjoining shopping strip. “Improvements there have already begun,” he said.
A reduction in the local government distributive fund is another issue. In the original LGDF agreement, the state gave municipalities 10 percent of motor-fuel and other taxes collected locally, aside from sales tax, in exchange for no local income taxes. But in recent years, the state has cut it to 6.5 percent. “We recently got it up to 6.7 percent. But every year, we are in a fight to get what is owed us,” he said.
The city is also investing in recreation.
“Our average age here is 51, but younger families are moving in. We have tried to update the quality of life in Palos Heights over the past 10 years,” he said.
During that time, five new parks have been built, including Orchard Park, which is nearing completion beside the Recreation Center on 127th Street. “We have spent $9.5 million in recreation improvements, including $6 million for the new rec center where we are,” noted the mayor.
“We had 44,000 visits to the rec center last year. We went from 600 to 775 members from 2022 to 2023. It is not flashy but it is a rec center for the community.”
Straz also said a state Open Space Land Acquisition and Development (OSLAD) grant is funding improvements to the Palos Heights Swimming Pool this year.
“This pool was built in 1972. I was going to shut it down—it wasn’t making money. But we had a groundswell of residents who wanted to make it vibrant.”
Pool membership is now growing and improvements will include a new slide, table tennis, bag toss, and a new deck.
The mayor highlighted other local amenities that are also flourishing, including everything from the summer farmers’ market in the municipal parking lot, the concert series in Community Park, and the public library which has seen 110,000 visitors to the library last year and a 72-percent increase in programming.
“Libraries are not obsolete as some people thought,” said Straz.
“We’ve got great schools and medical facilities. The quality of life is what brings people out here,” said Straz, asserting that Northwestern Hospital’s acquisition of Palos Hospital is turning the area hospital into a regional caregiver.
Pointing out Police Chief William Czajkowski in the audience, Straz went on to discuss the police department. He said the department received 16,000 calls for service last year, and police personnel received 3,806 training hours—almost 100 each.
“Next year, we are going to have body cameras. They will cost about $150,000,” said the mayor. License-plate readers will also be deployed in town, and a security camera will be installed in the municipal parking lot.
“I think they provide great protection for the city,” he said.
