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Article updated: 8/24/2012 10:56 AM

Keeping Walmart worth $1.75 million? Naperville thinks so.

Naperville council members have agreed to rebate $1.75 million in sales tax revenues back to the company over 10 years.

Naperville council members have agreed to rebate $1.75 million in sales tax revenues back to the company over 10 years.

 

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Losing Walmart to Aurora likely would also mean losing Sam's Club and a total of $1 million in sales tax revenue, Naperville officials say.

That's a risk city council members aren't willing to take.

Council members have agreed to rebate $1.75 million in sales tax revenues back to the company over 10 years.

Walmart plans to move out of the store at 776 S. Route 59 and purchase 18.5 acres nearby at the southeast corner of 75th Street and Beebe Drive to build a "supercenter" store.

"Walmart wants to stay in Naperville and bring customers a new and improved store with a wider selection of products and services," Walmart spokesman Daniel Morales wrote in an email Thursday. "The incentives offered by the city will allow us to better serve Naperville residents while creating 100 additional jobs and generating additional tax revenue for the city."

Without the tax incentive, city officials believe the retailer was headed to a larger property that could have housed both Walmart and Sam's Club, also on Route 59 but in Aurora.

"This is an incentive to retain Walmart, which was talking about moving literally across Route 59 and taking their sales tax revenue with them to Aurora," Councilman Grant Wehrli said. "A couple of years ago, all of the sales tax revenue from Costco was greater than all of the sales tax revenue generated from all of downtown. These supercenters make a ton of sales tax dollars for the city."

Several council members said they believe Walmart will collect the full incentive well before the 10-year mark, leaving the city to reap the benefits of the company's incremental growth. Councilman Paul Hinterlong said he also believes the incentive is the best way to maintain a business-friendly reputation.

"We thought it was important as a council to keep them in Naperville because they were looking at other communities very close to us," Hinterlong said. "We believe in retaining the businesses we have here in Naperville and this is our way of doing it. It will pay off in years to come."

City Manager Doug Krieger said he believes the payoff will come as soon as the next budget year, when his staff isn't scrambling to fill a $1 million gap.

"We're competing against one community and it happens to be the community right across the street," he said. "When you combine Sam's Club with Walmart, they bring in approximately $1 million of benefit to the city."

He said if Walmart left and took Sam's Club with it the city would be left with significant vacancies and a hole in its budget.

There are some questions about how serious Aurora was in trying to lure the retailer. Some Naperville council members said Aurora offered Walmart as much as $2 million in incentives, but Aurora officials on Thursday denied offering any tax breaks.

Resident Kent Bevel was the only person to speak against the incentive plan when the council approved it Tuesday.

"There is no reason why a company with Walmart's bottom line should get any public financing by taxpayers," he said. "Naperville is a very desirable place for a business to locate, however, we have been challenged to balance our budget in recent years. Why are we subsidizing a company of Walmart's stature and profitability?"

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