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Macomb begins process to create Business Development District, proposes three 1% occupation taxes for designated area
Summary
At a public hearing and first reading, the Macomb City Council heard a consultant outline a proposed Business Development District that would impose three occupation taxes (retailer, service and hotel), each up to 1% and limited to a defined area; the item will return to committee before final action.
Mayor Inman opened a public hearing and asked consultant Steve Klein to outline the proposed Macomb Business Development District Number 1 and the accompanying tax structure. Klein said the proposal would impose a retailer's occupation tax, a service occupation tax and a hotel operator's occupation tax each in quarter‑percent increments up to 1%, applied only to addresses inside the district boundary rather than citywide. "The proposal that Macomb has prepared at this point is to impose the full 1% for all three types of taxes that we're talking about," Klein said.
Klein described common exemptions consistent with state practice: titled vehicles (cars, trucks, trailers) and many prescription drugs would be excluded, groceries for home preparation generally would not be taxed, while prepared deli or convenience items would be subject to the district tax. He outlined eligible uses for the BDD fund including professional services, site preparation, utilities, street extensions and building rehabilitation; unlike some tax tools, Klein said the BDD structure can be used, through written agreements, to support new vertical construction when council approves such agreements.
Klein told the council the draft redevelopment plan lists roughly $111,000,000 of potential activity over the district's 23‑year life, and staff estimate the district could generate "probably somewhere around a couple million dollars a year" in BDD funds, increasing if retail activity grows. He also noted a procedural deadline: to begin collections on Jan. 1, 2026, the city needs to establish the BDD and file required boundaries with the Illinois Department of Revenue on or before Oct. 1, 2025.
Alderman John Vigesi sought to reassure residents about tax incidence: "So it's not a 3% — it is a 1% total," he said, stressing that property taxes would not increase as a result of the BDD. Klein and Mayor Inman reiterated the taxes apply only to purchases within the designated area (and, in some remote‑sales cases, to remote purchases attributed to the district).
Resident Ken Mulright, speaking during public comment, asked whether university students and their purchasing patterns were considered and suggested the district's planning should address pedestrian access and ADA needs near student‑oriented businesses. Mayor Inman said the short and full documents will be posted online and the council will take up the item again at a Committee of the Whole meeting next week; final action is scheduled for Sept. 2.
What happens next: The ordinance stood as first reading tonight and was placed on the Committee of the Whole agenda for further review before a final council vote.
