A 1% food and beverage tax may start on Jan. 1, 2025 in Northbrook.
At the June 25 Committee of the Whole (COW) meeting, Northbrook trustees unanimously agreed to put the ordinance on a Board of Trustees meeting agenda in August to likely approve the 1% tax.
The new tax would come into effect one year after the Village launched the controversial single-use 10-cent bag tax on Jan. 1, 2024.
The bag tax impacts more than 40 Northbrook retailers with square footage of 3,000 or greater and receives a nickel of each dime collected. At an April 18 village Sustainability Commission meeting, 18 business names not in compliance with the bag tax were not revealed and not provided to Pioneer Press despite a persistent Freedom of Information (FOIA) request.
The 1% food and beverage tax ordinance would cause large grocery stores with soup or salad bars to update software so checkout registers could collect both taxes or possibly be audited.
One unnamed Northbrook larger retailer had glitches early this past January when their registers missed collecting the dimes when the single-use bag tax went live on Jan. 1. The anonymous retailer reported more of the store’s shopping carts are now being stolen.
And now with a possible 1% food and beverage tax, restaurateurs operating small dine-in or carryout businesses would have to update those tablets that often ask customers to pick the box to add a generous suggested tip.
Restaurateur feedback
Of the 1% tax, “It’s unfortunate,” said an upset Katie Keefe of Northbrook, co-owner of Trattoria Oliverii of Northbrook (1358 Shermer Road) with Ali Spencer, also of Northbrook.
“Northbrook has never had a sense of itself,” Keefe said..’Now we have the bag tax. Past COVID, restaurants and carry-out food places were already struggling.
“On top of that, we have inflation, and food costs have gone up,” Keefe said. “On top of that, minimum wage has gone up so most of us small businesses are fighting the big corporations. Our employees definitely deserve it (competitive wages), but another tax on top of that is, I think, egregious.
“There are other restaurants opening in the area that we do now compete with,” Keefe said.
“It is driving more business downtown, I do like that, but every time a new place opens, people who have been around a while take a little bit of a hit.
“Why do they keep putting it on the small businesses and businesses that have been here, forever…than helping us out, they keep taking from us, hitting us to get to other places and I don’t like it,” Keefe said.
Helene Kapetaneas of West Chicago, co-owner of The Landmark Inn Bar and Grille (1352 Shermer Road) in Northbrook, was shocked to hear of the 1% proposed tax.
“I agree with Katie (Keefe),” Kapetaneas said. “The cost of food is ridiculous.”
A $30 lunch bill would mean adding 30 cents under the 1% tax.
“But it’s the 30 cents that would have gone in my pocket,” Kapetaneas said.
Both the Northbrook Chamber of Commerce & Industry and Sunset Foods corporate did not respond to requests for comment.
What the 1% food and beverage tax would generate amid COW discussion
According to the Village, the 1% tax would generate $1.15 million annually, helping to fund a new economic development manager position plus incentives for business recruitment and retention.
The tax would impact businesses where food or beverages, including alcohol, are made for immediate consumption such as in coffee houses. Groceries or packaged liquor for consumption off-premises would not be taxed.
Examples of taxable sales include meals served in restaurants and restaurant-style products sold in grocery stores such as hot plate items.
Restaurant products at convenience stores, such as hot dogs under a heat lamp, would be taxed plus fountain drinks and brewed coffee for immediate consumption, including cans or bottles of beer, mixed drinks, and soft drinks dispensed in a restaurant or bar.
The 1% tax proposal for Northbrook comes as Glenview has offered lucrative development incentives including low-cost land to the Ballyhoo Hospitality restaurant chain founded by a North Shore couple, Ryan and Anna O’Donnell.
Ballyhoo Hospitality’s new Jackman & Co. restaurant at 1749 Glenview Road was made possible by Ballyhoo receiving a $10 purchase agreement to buy the Glenview Village-owned approximately 6,000 square foot property, requiring $10,000 in earnest money.
Ballyhoo also received a Village restaurant grant of $1.75 million and must pay back a $2.25 million restaurant loan to the Village at 2% interest over 15 years.
If Ballyhoo defaults on the loan, the property returns to the Village. Under the 15-year repayment with interest, after netting taxes, the Village projected it would come ahead by $400,000 plus. See https://www.chicagotribune.com/2023/03/10/1700-block-of-glenview-road-poised-for-new-upscale-restaurant-at-economic-spark-site/.
Ballyhoo is set to open a second Glenview restaurant on the 1800 block of Glenview Road featuring Japanese cuisine called Zenzi Den, using village incentives, according to https://www.chicagotribune.com/2024/06/10/glenview-enters-into-another-agreement-with-ballyhoo-hospitality-to-help-finance-a-new-downtown-restaurant/.
“Ballyhoo Hospitality focuses on neighborhood dining throughout Chicago and the North Shore,” Ryan O’Donnell told Pioneer Press on June 27.
“We would be thrilled to review opportunities to partner with the community of Northbrook to enhance and enrich business development,” O’Donnell added.
Northbrook Village President Kathryn L. Ciesla said during the committee discussion, “A restaurant will not come necessarily unless the incentives are there.
“Or, it might, but not one of the sort of the big dogs that’s going to bring in thousands of people to your community daily.
“It’s an investment to get that kind of a customer to come into your community,” Ciesla said. “It’s going to cost us more than this 1% (tax) to bring in a quality restaurant.”
Ciesla added, “Skokie Boulevard is becoming quite the restaurant row.
“I do want to focus on the downtown,” Ciesla said. “A lot of boards have talked about it and no board has ever taken a big swing at it and maybe we’re the board that takes the big swing at it.”
Marcello’s Northbrook June 30 permanently closing
The Northbrook 1% tax comes amid news of Marcello’s Northbrook (1911 Cherry Lane) permanently closing on Sunday, June 30. Coincidentally, the Village of Northbrook’s Facebook page posted on the same June 30 date (but in 2020) photos of Marcello’s during the height of the COVID-19 pandemic, indicating, “With 14 years in Northbrook, Marcello’s Father and Son restaurant celebrates community and family, it’s even in the name!”
Larry Goodman of Northbrook, Marcello’s general manager, told Pioneer Press on June 25, “We appreciate all the support we’ve had from the Northbrook community.”
About a possible New Year’s Day 2025 launch of a 1% food and beverage tax, “Well, I won’t be here to see it,” Goodman said.
At Marcello’s on June 25 were customers and United States military veterans Rob Holt and Tom Coogan, both of Northbrook.
“The food’s been great,” Coogan said about Marcello’s. “It’s been a well-run place and I think Northbrook’s going to miss it.”
Holt said to Marcello’s, “We’re going to miss you a lot.
“It’s a nice neighborhood place.”
Upon hearing of the 1% tax, “That’s absolutely ridiculous,” Holt said, adding about the village and trustees, “Why don’t they get responsible about what they’re doing and not throw the burden on the merchants?”
“This is the talk of the town,” Holt said, “that they’re not being responsible.”
Communities near Northbrook with a food and beverage tax include Arlington Heights at 1.25%, Bannockburn, Buffalo Grove, Des Plaines, Highland Park, Lake Bluff, Lincolnwood, Morton Grove, Niles, Wheeling, and Park Ridge, all at 1%, and Skokie at 2%.
Karie Angell Luc is a freelancer for Pioneer Press.
