By Alex Hassel, Storage.com
How would you react if your community instituted a self storage tax? That idea could soon become a reality in Lincolnwood, Ill. The Chicago Tribune reports that the village’s Committee of the Whole is debating whether or not to start a tax on rental facilities that could generate around $235,000 in new annual revenue for the municipality.
This tax would affect just three self storage facilities in the village: Two Public Storage locations at 6460 N. Lincoln Ave. and 3501 W. Touhy Ave., as well as a Lock Up Self Storage facility at 3850 W. Devon Ave. Village officials claim these locations are at 90% occupancy and paid a combined $267,680 in property taxes in 2014. Cook County’s tax assessor says 10% of that went to Lincolnwood.
What sparked the idea for a self storage tax? The area has valuable commercial property just 13 miles from Chicago that’s easily accessible from major highways. Village officials say they’d rather have tax-generating businesses taking up those areas.
“To add taxes, you need to look at all the prime commercial real estate [in this case, storage facilities] could be taking away,” Trustee Jesal Patel says. “But any time we’re taxing someone or talking about increasing taxes, we need to be careful.”
In addition, the municipality is expecting $260,000 less from the state in 2016. Village Manager Tim Wiberg believes the storage tax could “diversify local revenue” rather than filling a certain gap in specific areas of the budget. “[Storage facilities] are a type of use that you don’t want a high concentration of—we already have three in a 2.7-square-mile radius,” Wiberg says.
If Lincolnwood lawmakers decide to move forward with the idea, they could do it in two ways. One is a flat tax structure based on the number of units in a self storage facility. Assistant Village Manager Doug Petroshius notes that if a $5 monthly tax per unit was charged to each of the 2,000 units in Lincolnwood, it would add up to an additional $120,000 in tax revenue for Lincolnwood.
The second option is a progressive tax. This would charge each facility for its amount of rentable square feet. Petroshius gives another example where if the village charged a dollar a year for the 235,147 square feet in Lincolnwood, it could generate around $235,000 each year.
Lincolnwood wouldn’t be the first in the Chicagoland area to adopt a storage tax either. Morton Grove, North Chicago, and River Grove already tax self storage facilities.
If Lincolnwood storage leaders don’t follow through with the tax, they have agreed that the community should require special permits for any new storage developments in a commercial area.
Alex Hassel is News Reporter for Storage.com. If you’d like to pitch Alex a self storage industry news story, email alex.hassel@storage.com or call 402-779-7328.
