Wal-Mart Stores Inc. has announced plans to close its East Dundee store and build a new one in neighboring Carpentersville, a move East Dundee Village President Jerald Bartels called "a huge blow" to his town.
The world's largest retailer has plans to build a store next year at the corner of Lake Marian Road and Besinger Drive and to open it by 2014, officials said.
The Walmart store has been a cash cow for East Dundee, as it generates about $850,000 in annual sales tax revenue. Now, East Dundee officials are looking at the grim reality of preparing future budgets without that money -- that particular Walmart had been around for 21 years.
"It's a huge blow to East Dundee," Bartels said.
"We were hoping that this day would not come, so we've been working hard to prepare us for that day," he added, noting the annexation of GAT Guns into the village and the addition of other businesses along Route 25 will help soften the financial setback.
East Dundee has known for some time that Wal-Mart was looking to leave, because in 2006 the retailer announced plans to build a store on Huntley Road adjacent to Spring Hill Mall in West Dundee.
But lawsuits from neighbors of that site complaining about noise from Walmart traffic and other quality-of-life issues put those plans on ice.
In the interim, East Dundee "begged and pleaded and everything you can imagine to sit down with Wal-Mart" to talk about keeping the retailer in town, Bartels said.
But in August, Wal-Mart finally met with East Dundee officials and told them they'd officially decided on Carpentersville.
Carpentersville Village President Ed Ritter heralds Wal-Mart's arrival as evidence of Carpentersville's business-friendly policies.
"We welcome all new businesses to Carpentersville," Ritter said. "It's one of a number of businesses that are moving to Carpentersville because Carpentersville is proving itself to be a good place for new businesses."
Bartels is also fearful he'll end up with a white elephant.
Wal-Mart's lease doesn't expire until 2017 and his concerns are that the company won't look for a business to replace it -- or if it does, it won't be anything that would compete with the new store in Carpentersville.
Walmart is within a tax increment finance district -- where property taxes going to local governments is frozen at a certain level and taxes above that go into redevelopment -- in East Dundee and is moving to one in Carpentersville that the village board established earlier this year.
But if Carpentersville is using TIF money to entice Wal-Mart, then Carpentersville will have to answer to East Dundee, Bartels said, adding that it is illegal to use TIF money to lure a business out of one TIF district to another one that's within 10 miles.
The existing Walmart and the planned Carpentersville site are about two miles apart.
"If TIF funds are part of a deal they have with Wal-Mart, then we'll respond accordingly," Bartels said.
Bartels also accuses Carpentersville of creating the TIF district, knowing it would pull Wal-Mart away from East Dundee.
But Carpentersville Village Manager J. Mark Rooney said the creation of the TIF had nothing to do with East Dundee.
"We needed to do something to energize interest in the Route 25 business corridor," Rooney said. "It wasn't targeted or directed at any fashion toward East Dundee."
He added that Carpentersville is well aware of the TIF act Bartels cited and that the village has not "in any way come close to the actual law or the spirit of that law," Rooney said.
Wal-Mart hasn't officially committed to Carpentersville, Rooney said, and while discussions have been under way for about a year, the bulk of them have been between Wal-Mart and Frank Scarpelli, who owns the property on which it would be built.
"We're cautiously optimistic that the deal will get done," Rooney said.