Palos Heights Alderman Jeffery Key criticized the handling of the 1% business district tax enacted in the fall of 2023, citing a lack of communication and planning regarding the reinvestment of collected funds.
“I’d like to speak about the 1% tax added to our business district that this council enacted in the fall of 2023 and started collecting exactly 400 days ago on January 1, 2024,” Key said at the Feb. 4 City Council meeting. “This subject affects every business located within the Harlem Avenue corridor and certainly affects every person that shops there.”
According to Key, the tax generated over $400,000 in 2024. However, he expressed disappointment that a year has gone by and the council has not been informed of any plans for how the funds would be used.
“I’m extremely disappointed that the council has not been notified of this. In fact, we have not set a single goal regarding the reinvestment of those funds into the business district,” he said. “If Nuha from the Regional asked each of us individually sitting in this room tonight a question, something like, ‘What are the plans for the business tax?’ she would get 12 different answers, and that shows a total lack of management of city resources and is entirely unacceptable.”
Key criticized the council’s failure to establish a committee or begin discussions on the matter. He pointed out that residents had raised concerns when the tax was first enacted and questioned how the city would respond.
“The use of these funds is a complicated one because we need to address problems like parking, connectivity, lighting, facade, signage, property maintenance, et cetera, et cetera. A great deal of comprehensive planning has to go into this,” Key said. “Input from both the public and business communities has to be engaged. A design firm needs to be engaged. And are we even thinking of addressing any of this? Indeed, we have not done anything in regard to these collected funds.”
Mayor Straz Defends the Process
In response, Mayor Bob Straz, who is running for re-election against Key in the April 1 election, refuted the idea that the city had no plan, explaining that the tax funds were still in the early stages of allocation.
“The initial plan was when we passed the ordinance at the end of 2023, and through that time we’ve started to accumulate the money,” Straz said. “If you believe that we had $400,000 the whole year—well, you know, it was coming in monthly, about $30,000 at a time. So it wasn’t like it was all accumulated at once.”
Straz emphasized that city officials understood the process would take time.
“We knew it was going to be a long-term thing. It doesn’t happen overnight. What we’re doing now is preparing a request for proposals from various consultants in this field,” Straz said. “You just don’t want to go out and start knocking out walls and putting in streets. There’s a pattern to this—you have to be careful with the taxpayers’ money.”
Straz stated that consultants will be hired to develop a structured plan based on input from business owners, residents, and aldermen.
“The consultants will actually interview the stakeholders—meaning the residents themselves, the business owners, the aldermen—on what they are looking for in the downtown area,” he said.
Straz also acknowledged that transitions within city leadership had slowed progress.
“Our economic development director retired in the middle of the year, and we just brought a new person on in July. They’re starting to pick up the pieces and get things moving,” he said.
Addressing Resident Concerns
Regarding Key’s assertion that residents had raised concerns about the tax when it was enacted, Straz downplayed the level of opposition.
“You’re always concerned when somebody is against something, but we are charged with doing what’s best for the majority of the people,” Straz said. “I did not get a lot of pushback. I don’t know who he’s talking to, and I’m sure there were some concerns, but anything you do, there will be people against it.”
Straz reiterated that the city aims to support small, family-owned businesses in the downtown area.
“We’ve done a great job building a downtown area with locally owned businesses, and we want to build on that. The easy way would be to find a developer to come in, tear everything down, and put in a Starbucks or Trader Joe’s, but that’s not what we’re looking for,” he said.
Stalled Projects
Key also expressed frustration over past council decisions, citing two projects—the purchase of property at 71st Court and 123rd Street for a parking lot and the City Hall renovation—that became stalled due to shifting votes and a lack of clear goals.
“In both cases, many months went into the planning, engineering plans, and then minds changed, votes got changed, and the project walked down and nothing has been done,” Key said. “Even though the parking lot situation looks to be resolved, we resolved it months ago. And so my question is, where are we with that project tonight?”
Straz countered that the City Hall renovation stalled due to financial concerns raised by some aldermen.
“The Buildings and Grounds Department came up with a plan to renovate the whole City Hall. But when it came down to allocating funds, some aldermen thought it was too much money to spend on a building of this age,” Straz said.
As for the parking lot project, Straz explained that shifting votes among aldermen had temporarily halted progress.
“We needed a supermajority, and we didn’t get enough votes,” he said. “At the end of last year, I addressed the aldermen and said, ‘If you don’t want to go ahead with this, should we sell it?’ At that point, they agreed to move forward.”
Straz also revealed that the city is in the process of purchasing an additional property nearby for long-term downtown development.
“This is a planning process—we’re planning ahead just as he says we’re not doing,” Straz said.
Looking Ahead
Key ended his remarks by urging his fellow council members to take action, calling for structured planning and open dialogue to ensure the proper use of city funds.
Straz, however, maintained that the city is taking a methodical approach.
“I think maybe some of his frustration—and I can’t speak for him—is that things don’t move as quickly as he thinks they should,” Straz said. “But sometimes moving a little bit slowly and taking your time makes the final product a lot better than just shooting from the hip.”
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