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Fraud Claims Spike Plan To Hike Taxes To Spruce Up Downtown Jeff Park

By Heather Cherone | December 2, 2015 5:40am
 Jefferson Park Business District
Jefferson Park Business District
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DNAinfo/Heather Cherone

JEFFERSON PARK — A plan to raise taxes by an average of $1,100 a year to spruce up the commercial district along Lawrence and Milwaukee avenues came up short after a review prompted by allegations of fraud, Ald. John Arena (45th) said Tuesday.

Arena said he would no longer support an effort to create a Special Service Area in the Jefferson Park Business District along Milwaukee Avenue between Montrose Avenue and the Kennedy Expy., as well as on Lawrence Avenue between Austin Avenue and the expressway.

Arena blamed a "flawed" city process for the discrepancies discovered on the petitions filed in support of the effort by the Jefferson Park Chamber of Commerce.

At least 20 percent of property owners in the district were required to sign a petition supporting the tax hike in order for it to be implemented — according to city rules — and the chamber's application is now 15 signatures short, Arena said.

"The city's process does not set clear expectations for what constitutes a valid signature," Arena said. "I will advocate for changes to the city's process."

Jefferson Park resident Ron Ernst said during a public hearing Nov. 12 at City Hall that an examination of the signatures by several members of the Jefferson Park Neighborhood Association found that several were invalid.

Fifteen signatures could not be verified by city officials as belonging to the owners of the listed properties and will not be counted, Arena said.

City officials reviewed and approved all of the signatures in July, said Amie Zander, the executive director of the chamber of commerce.

Zander said neither she nor anyone who collected signatures on behalf of the chamber committed fraud in an attempt to get the tax hike approved.

"The word 'fraud' is ridiculous," Zander said. "But the process is quite flawed."

After obtaining a list of properties that would be assessed the additional tax, representatives of the chamber went door-to-door asking those who identified themselves as the owner of the property to sign the petition that was submitted to city officials, Zander said.

"Why would we assume that people wouldn't tell us the truth?" Zander asked.

Arena blamed the failure of the effort that he said would to bring new life to the Jefferson Park Business District on chamber past President Lionel Rabb, who changed his mind on the measure after he concluded it would be inappropriate to force homeowners to foot a portion of the bill for improvements designed to improve the business district.

There are five single-family homes within the boundaries of the special service area, whose owners would see their taxes rise by about $300 a year. The owners of the 386 condominiums in the area would pay an additional $200 a year, officials said.

Chamber leaders asked city officials to change the rules and exempt those properties. City officials declined, citing the presence of residential properties in the more than 50 special service areas throughout the city.

Arena said Rabb "has attempted to undermine the very process he initiated and the majority of the board members continue to support."

Rabb, the founder of the Ed Paschke Art Center in Jefferson Park and the president of the National Veterans Art Museum's board of directors, said he would be "happy to be blamed for stopping" a tax hike on residents who live in the business district.

"The fundamental fact is that it wasn't done correctly," Rabb said. "There is a considerable amount of questionable signatures. Whether or not it was intentional, the signatures were bad."

Chamber officials can continue collecting signatures from Jefferson Park property owners who support the tax hike through June and try again in 2017 to form a special service area, Arena said.

But  Arena said he was no longer convinced the chamber was capable of running the special service area with a proposed budget of $220,000 to fund efforts to attract new businesses by hiring real estate brokers to market the empty storefronts as well as to push Jefferson Park as a great neighborhood to open a business, officials said.

The tentative budget proposed to spend the largest chunk of money — $82,000 — on fixing up public property and improving the area's aesthetics, officials said.

"I have deep concerns about the chamber's ability to effectively and responsibly manage taxpayer dollars," Arena said.

Rabb was replaced as chamber president by Gale Street Inn owner George Karzas, who also initially supported the special service area but dropped his support for it after the City Council approved the largest property tax hike in Chicago's history to shore up police and fire pensions.

The owner of an average commercial property in the business district would have seen his or her tax bill rise $1,118 a year if the plan was implemented. The owner of an average mixed-use property — with both residential and business tenants — would have paid an extra $560 year under the proposal.

Arena said he was not ready to give up on the effort to create a Jefferson Park Special Service Area, calling it a good way to revitalize the area, and said it has had a positive impact at Six Corners in Portage Park.

"There is still an opportunity to create a [special service area], either with the chamber for 2017, or with another agency in charge of managing" it, Arena said. "I remain committed to working with all that wish to help our local business community grow and thrive."

Zander, who was recruited by Rabb to take over the Jefferson Park chamber in 2014 and implement a special service area in Jefferson Park, said she was not sure whether she would stay with the chamber now that plans for the special service area are on ice for at least a year.

Without the creation of a special service area, the Jefferson Park Chamber of Commerce — founded in 1932 — could cease to operate, since it no longer receives approximately $30,000 in city funds that most chambers of commerce get to operate.

Missing paperwork and a lack of proper documentation for expenses led to the loss of those funds before Zander was hired, officials said.

The chamber could reapply for those funds in 2017, Zander said.

While its members pay dues, Zander said those funds would not be sufficient to have a full-time employee on staff. That could threaten the chamber's ability to produce Jeff Fest next summer, Zander said.

In addition, the chamber is expected to have to repay a $25,000 loan it used to pay consultants to create the application for the special service area.

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