Sam Sanchez

“When the pandemic hit, it almost put everybody out of business. It isn’t back to where it’s supposed to be. First, we dealt with the virus and now we’re dealing with a crime wave issue and the last thing the community needs is more property tax increases.”
“Anything that hits any industry to the very bone will do a lot of damage, especially if they’re already struggling. An increase in real estate taxes right now, whether for business owners or residents of the county, just takes money out of circulation from the city, retailers, from labor.”

“The pandemic was a boon for property and sales taxes. We know as business owners that we increased our prices 20% or 30% in some cases since the pandemic. That means sales taxes increased by at least that much, with no increased cost of operation. So, the state, county and city saw increased revenue without any legislation, simply because we have had to increase our prices.”

“For example, we used to charge $80 for a two-person dinner party and now it might cost $96. Well, that 20% increase was really the increased cost of goods and labor. But the 20% increase in sales taxes goes right to the government. They’ve seen their tax revenues increase, and they want more? It’s the same problem we’ve seen in Cook County forever – mismanagement.”

“I don’t understand why they don’t take into consideration their increased sales tax revenue before raising property taxes. Property taxes for a restaurant, restaurant owners and operators are assessed under the same category as retail or an office. But a restaurant does not operate the same as an office or retail.”

“It’s an unfair system and restaurants should have a separate classification as they do for other types of businesses. Certain restaurants have rooms or banquet halls that are not busy all day long, seven days a week. Those restaurants that work multiple rooms only generate income if there’s an event. I wish people got married on Monday, Tuesday and Wednesday but it doesn’t work that way. So, these restaurants are built on revenues from two or three days a week, but we’re taxed seven days a week on spaces that are not used.”

“In a recession, corporate parties are the first thing businesses cut, so all those businesses lose twice – through taxes and lost revenue. And now they want to raise even more property taxes? Commercial vacancies continue to grow in the city of Chicago and the county. There are only a few areas, the Mag Mile and Little Village, for example, that have sustained popularity and brought in revenue for the state.”

“Eventually, when those centers and the business that build them leave, there will be no money for social services. And they are still sitting on a lot of COVID relief money.”

“It’s tough because many businesses closed and those that survived are having a slower recovery. There are a lot of people, including myself, who haven’t been able to fully reopen because we’re short-staffed. The cost of labor has increased so much, it’s hard to compete.”

“Big companies like McDonalds are offering $500 to $2,000 bonuses for people to flip a burger or wash dishes. Mom-and-pop restaurants can’t compete to attract talent and have to close certain days of the week or, in our case, we close for lunch because we don’t have the staff.”

“You can only charge so much for coffee, a burger or a drink. And people will complain because they’re charged $12 for a drink, but included in that we’re paying property taxes, insurance, food costs, management, repairs, service, etc. The costs are never ending. Tack all of this stuff into the price of one item and restaurants are working on 4% to 6% margin.”

“So, any additional increases when restaurant owners are already carrying so much is harmful to business. It takes away our ability to invest in our businesses and create more jobs. Instead, business owners ask themselves, ‘Where’s the money going to come from?’”

“And at some point, customers will start to realize it’s cheaper to stay home and you lose business. Food deliveries and catering doesn’t make money because you are making money on the drinks. Any additional increase to the taxes or cost of doing business not only strains restaurants but also kills morale.”

“I get asked all the time, ‘Why open a restaurant in Chicago. There are too many negatives.’ The question really becomes, ‘Give me one good reason to open a restaurant here,’ and it’s getting harder and harder to come up with one. Some people like me who’ve been around 30-plus years, we already know what we’re doing and where we’re at. So, we’re just
kind of hanging around, seeing what’s going on. But the climate overall is driving more and more people out.”

“The restaurant and hospitality industry represents over 563,000 workers. A lot of people don’t want to see us fail because we are the largest source of employment, and we do generate money. Local government is positioned to help us succeed. They can start by creating a special tax classification for restaurants.”

Sam Sanchez
Chairman, Illinois Restaurant Association
Founder and CEO, Third Coast Hospitality Group
Chicago, Illinois