KEEL: Crony capitalism plays in Peoria
The Peoria City Council has approved an extra 1 percent sales tax, but not for schools, roads, or fire/police protection. This “enhanced” tax rate was set up to benefit the developer who is bringing Portillo’s, the popular Chicago-area hot dog franchise, to Peoria.
Developer William Torchia convinced our City Council that such assistance was the only way to bring the iconic restaurant to Peoria. Torchia hopes to recoup $650,000 in costs associated with land acquisition and property development.
The Libertarian Party of Greater Peoria stands in opposition to the actions taken Tuesday. We believe the city council should not pick winners and losers in a free market. Any business worth opening should do so without taxpayer subsidies. Undoubtedly, savvy developers for any future projects will now request the same treatment under the guise that the project is paying for itself. But in reality, this tax diminishes the risk of the developer. It is a true example of “crony capitalism.”
Portillo’s looks appealing because it appears it will be a spigot of fresh revenue and jobs. It’s been estimated that the sales will produce up to $880,000 in annual tax revenue. We simply don’t see it. To think that Portillo’s will not take customers away from the other local eateries is naïve, at best. Establishments such as Five Guys, Chick-fil-A, and amazing local restaurants Donnelly’s Shamrock Pub, Kouri’s Pub, and Louie’s Sterling Family Restaurant have created the environment that brings customers to that area! Many pennies made at Portillo’s will come from those businesses.
The new jobs this Portillo’s will bring are not anything to write home about, either! They will be at or near minimum wage, not the kind that sustain middle-class families. Additionally, Portillo’s isn’t even a family-owned or Illinois business anymore, as it was purchased in 2014 by Berkshire, the private equity firm from Boston. All the profits shoveled into Portillo’s registers will not only go out of town, but out of state!
In addition, the floodgate has been opened. We now have a city government tilting the playing field to assist a developer on a project in an area already ripe with successful restaurants. The purpose of this tax isn’t noble. Torchia didn’t need this subsidy. He knew our City Council was too incompetent and weak to call his bluff. He was right.
Wake up, Peoria! We’ve been played!
Joseph Keel is treasurer of the Libertarian Party of Greater Peoria.
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