Here’s how storing your extra stuff may cost more in Belleville
The former Shop ’n Save building on North Belt West is expected to be resurrected as a self-storage business but the developer is not happy his customers may face a new cost.
Belleville leaders are considering a 5% tax on rental fees paid by customers at self-storage businesses. The customers at these businesses currently do not have to pay any tax or fee to the city.
Supporters of the proposed tax say it would help pay for city services provided to the businesses such as police and fire protection as well as snow removal on the streets that lead to them.
But Trent Overhue, whose family paid $1.4 million to buy the vacant Shop ’n Save grocery store at 4201 North Belt West so they can open a self-storage business there, notes that they will have to pay more than $80,000 a year in property taxes for the site.
St. Clair County records show that $88,917 in property taxes for the site are due this year, half of which has been paid by Shop ’n Save. The remainder is due by Sept. 30. Several taxing bodies, including the city, get a slice of those property taxes, with area school districts getting the highest percentage.
“In my opinion, it’s not needed,” Overhue said of the proposed 5% Belleville tax on self-storage rentals. “Our taxes on these buildings are already astronomical. They’re very expensive.
“Everybody wants to tax storage but it’s not as lucrative as a lot of them think.”
Overhue said the tax, if implemented, would be passed onto the customers of his family’s self-storage business, which is called Affordable Family Storage.
Proposed tax plan
Belleville aldermen on the Ordinance and Legal Review Committee have asked the city attorney to draft an ordinance that would require self-storage businesses to charge a 5% tax on each rental fee charged. All of the money collected would go to the city.
The committee is scheduled to vote on the proposed ordinance in mid-September. If the committee approves the plan, the full City Council would consider the tax on Sept. 21.
Alderman Phil Elmore said he has spearheaded the plan to get the City Council to consider the self-storage tax and other new revenue sources. Elmore said the self-storage tax is similar to a hotel tax that cities, including Belleville, impose on hotel guests.
Belleville’s day-to-day operations are “heavily reliant on sales tax revenue” and Elmore said the proposed self-storage tax would help.
He acknowledged, however, that the tax is not the “end-all, be-all answer” to the city’s financial outlook.
“But if we can piece together two or three more ideas like this, we can feel a lot more comfortable about things we still need to do, like buying new sanitation trucks, like buying police cars. Those things just cripple our budget.”
Mayor Mark Eckert said he supports the proposed tax.
“To have a little bit of a tax on there is not a terrible thing,” he said. “They certainly will get the services of the city. I mean we’ll have to take care of the roads that lead up them, we’ll have to plow the snow that leads up to the front of the property and all those things. So we’re going to be doing our fair share.”
However, Overhue said self-storage businesses have “minimal” needs for city services in comparison to a large, retail shopping center that often has businesses calling for police officers.
Belleville officials did not know if other cities in the metro-east charge a self-storage tax but Treasurer Dean Hardt found out that Tinley Park, which is near Chicago, passed a 5% tax for self-storage businesses in March.
Several other cities in the Chicago area, including Skokie, River Grove and North Chicago, have imposed self-storage taxes.
Aldermen have asked City Attorney Garrett Hoerner to model Belleville’s proposed ordinance after the one approved in Tinley Park.
Overhue said he was “disappointed” to hear that Belleville was following moves made by Chicago area cities because his company avoids that region because of the taxes there.
The Tinley Park tax was supposed to go into effect on May 1 but that was delayed because of the coronavirus pandemic. If Belleville approves the tax, the plan calls for the tax to start on Jan. 1.
City officials do not have an estimate on how much revenue the tax would raise.
“It’s based on sales,” Elmore said. “We don’t have any history on sales of storage facilities but if it’s a dollar, it’s a dollar more than we got last year.”
There are about a dozen self-storage businesses in the area and the city plans to determine which ones are in the city limits and give them a heads-up if the tax is approved.
Along with the tax, the city also is considering whether to ask the self-storage businesses to pay a $50 annual business license fee.
Self-storage industry grows
Across the nation, the self-storage industry has been growing in recent years and Belleville has followed one trend in which former big box stores are converted into indoor, climate-controlled self-storage businesses.
The Wall Street Journal has reported that in 2018 developers spent “almost $5 billion on self-storage facilities, roughly 20 times what was spent in 2011.”
The self-storage businesses are taking over vacant places that once produced sales tax revenue for the city.
But The Wall Street Journal reported that there are cities across the country where leaders are not excited about self-storage businesses opening where there possibly could be retail or residential development.
In Belleville, however, the new indoor self-storage businesses recently have taken over places abandoned by retailers and weren’t redeveloped into retail or residential uses.
Metro-east businessman Allan Sinn recently opened one of his Ashland Storage Centers in the former Sears appliance and hardware store at 653 Carlyle Ave.
And Florida businessman David Bernstein converted the former Walmart at 120 Carlyle Plaza Drive into a CubeSmart, which allows customers to drive inside the building to unload their goods. This building had been vacant for 11 years by the time Bernstein began to redevelop it.
Sinn and Bernstein both declined to comment on the proposed tax for self-storage businesses in Belleville.
Belleville aldermen had a tie vote of 8-8 on whether to allow Overhue to open his business in the former Shop ’n Save but Eckert cast the deciding vote in favor of Overhue.
Overhue said the Shop ’n Save, which closed two years ago, will be remodeled smartly for customers to store goods in a climate-controlled setting on the site, which has about nine acres. The business is expected to be open by the end of the year.
One of the features will be building additions that will target commercial clients who may need a space larger than what typically is offered at a self-storage business.
“It does well with the guys starting new businesses,” Overhue said. “So we call them business incubation areas, where it allows them to get their business off the ground at an affordable rate.”
Overhue, who helps run Affordable Family Storage along with his brother and parents, said the family has about 20 self-storage businesses in the Midwest and that city leaders have been pleased with the sites once they open and that the Belleville location will be no different.
“This Belleville property will turn out really, really nice,” he said. “It’ll definitely be a benefit in that area compared to a big, vacant box.”
This story was originally published August 24, 2020 at 5:00 AM.
