Metro-East News

State delays granting sales tax breaks in 49 places, including Belleville

A state agency has put on hold requests for sales tax breaks for the purchase of construction material. One of the sites affected includes the planned Hofbrauhaus brew pub in Belleville.
A state agency has put on hold requests for sales tax breaks for the purchase of construction material. One of the sites affected includes the planned Hofbrauhaus brew pub in Belleville. Provided rendering

A state agency that approves sales tax breaks for the purchase of construction materials in special areas has put 49 requests on hold statewide because of the budget impasse between Republican Gov. Bruce Rauner and Democratic lawmakers.

Belleville’s request for what’s called an enterprise zone will not be certified “at this time,” according a Department of Commerce and Economic Opportunity statement released Sunday.

The requested enterprise zone would include the site where developers plan to build a Hofbrauhaus brew pub, hotels and restaurants on Illinois 15 near the National Shrine of Our Lady of the Snows.

However, the state’s announcement on Sunday did not address a separate enterprise zone request filed by Belleville that would allow the city’s current enterprise zone to be extended to include the Hofbrauhaus site until July 1.

The city is still waiting for a decision on this request, according to Eric Schauster, the assistant director of Economic Development, Planning and Zoning for Belleville. The current enterprise zone has been on the books since 1985 and expires July 1.

The Hofbrauhaus developers, the Keller family of Effingham, are seeking a sales tax break worth up to $1.25 million for the purchase of construction materials.

Forrest Langenfeld, the financial consultant for the Keller family, on Monday said site preparation is underway and this work will last until Oct. 1. He said he would advise the Kellers to begin building on the site even if the enterprise zone requests are not granted by the time the earthwork is completed.

The project has been valued at $50 million to $60 million by the Kellers, and they have already been granted tax incentives valued at $15.69 million by the Belleville City Council.

Six other requests to establish enterprise zones in the metro-east were not certified by the Department of Commerce and Economic Opportunity, or DCEO. These requests included Fairmont City/Caseyville, Fairview Heights, Madison County Discovery, Nashville/Washington County, Riverbend and Southwest Madison County.

These requests for new enterprise zones were approved by the Illinois Enterprise Zone Board but the Department of Commerce and Economic Opportunity said it would not certify the board’s decision.

Jim Schultz, the director of the Department of Commerce and Economic Opportunity, said in a news release, “Local and state tax incentives are important business development tools, but cannot be truly effective while the state continues to bleed jobs due to high costs of doing business. To issue tax incentives without addressing these cost drivers would be a disservice to Illinois businesses and communities. The Department of Commerce will continue to evaluate the appropriate time to certify the approved enterprise zones.”

Contact reporter Mike Koziatek at mkoziatek@bnd.com or 618-239-2502. Follow him on Twitter: @MikeKoziatekBND.

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