McHenry approves tax incentives for Rita’s Italian Ice and Custard

The McHenry City Council on Monday night approved a $10,000 grant for the newly opened Rita’s Italian Ice and Custard, gave the business that rehabbed an empty building a rebate of its property taxes, and amended the city’s facade grant program going forward.

Those moves, however, were just a portion of the economic development packages given the council’s nod during its regular meeting.

“I get calls weekly to my personal cell phone” asking about bringing a business to McHenry, Mayor Wayne Jett said, adding the city’s economic development and planning and zoning directors get similar calls.

“We are getting calls from businesses who want to come into the city of McHenry ... about those properties that are available,” Jett said.

The grant approved for Cathy Levatino, owner of Rita’s Italian Ice, helps the business with its purchase of materials including a batch freezer and custard machine.

While those machines are essential to the business, the store also brings something McHenry was missing to its downtown, Economic Development Director Doug Martin said.

“McHenry now has an ice cream place located in a key area of downtown and it draws people to downtown. It is close to Miller Point Park and the river. People are naturally drawn to stop at the businesses,” Martin said.

Levatino likely also will apply for a facade grant for the upgrades she has made to the outside of the building at 3319 W. Elm St. – a former insurance storefront – Martin added.

We are getting calls from businesses who want to come into the city of McHenry ... about those properties that are available.”

—  McHenry Mayor Wayne Jett

That facade grant program was revamped less than a year ago. Since then, eight McHenry businesses have taken advantage of the program, he said.

Originally funded with $100,000 by the city, the grant fund has less than $7,000 remaining in it - unless the council votes to amend that budget item and contribute more funds before April 30, 2024.

One of the changes approved Monday night allows franchise and chain locations - like Rita’s - to access those funds, Martin said.

“She is not your typical chain franchisee,” Martin said, noting Rita’s allows its owners more freedom and autonomy in their building design. “She took a building and renovated it into something that is now a viable business.”

In a separate vote, and because the former insurance agency was a vacant building for more than three years, the board also approved a deal that rebates all of the property tax from that location back to Levatino for five years.

This year’s property tax bill on the building totaled $5,168.62, according to Martin’s report to the City Council. The tax rebate this year, however, would have amounted to $3,031.55.

As the business is in the downtown tax increment financing district, the funds would be rebated from the TIF funds.

Other economic incentive deals on the agenda extended an economic development agreement with Dan Hart, owner of Whiskey Diablo at 1325 N. Riverside Drive. Approved in November 2022, the agreement allowed Hart to share sales taxes with the city. However, the agreement said the occupancy permit had to be obtained by Aug. 31.

That hasn’t happened because of supply chain and contractor delays, Martin said.

Hart now has until Feb. 28 to receive the occupancy permit.

All of the economic development agreements are a sign of growth for McHenry, Martin added.

“There is a lot of activity going on right now and people are looking for any possible incentive or way they can get assistance to help them do well,” Martin said.