The Hoffman Estates planning, building and zoning committee passed a resolution Monday authorizing an incentive that will give a portion of sales tax revenues from a new Mariano's Fresh Market to the owner of the shopping mall where the store will soon be located.
The 20-year lease between the owner of Hoffman Village Shopping Center, at Barrington and Golf roads, and Mariano's, which is scheduled to open in the center in late August, states that the center's owner, RMS Properties IV LLC, is responsible for around $4 million of interior build-out costs and modifications.
Mariano's is expected to add an additional $5 million of interior improvements.
But because the presence of Mariano's is expected to bring more tenants to the shopping mall, the Hoffman Village owner will likely face more interior build-out costs throughout the shopping mall in the future.
The owner requested help from the village to recapture a portion of the initial cost.
Monday's resolution proposes an incentive that builds in a base level of sales taxes that will go to the village to replace revenue that was lost from a Dominick's that closed earlier this year in the space Mariano's will fill.
That base level is set at $250,000 for 2013. In that year the owner of Hoffman Village will receive 100 percent of the sales taxes from Mariano's that is over that base amount.
In 2014 and 2015, the center's owner will get 90 percent of the sales tax generated over the base amount, and in 2016 the owner's portion will be reduced to 50 percent of the sales tax generated over the base amount.
For this year, the owner will receive 100 percent of Mariano's sales tax, as the store is scheduled to only be open for the last few months of the year.
Chairwoman Karen Mills clarified that none of the money will go to the owners of Mariano's.
The resolution also states that while this is a five-year plan, the owner of Hoffman Village will be able to receive up to only $750,000.
The village is expected to still receive around $1.3 million in sales tax from Mariano's during this incentive period.