A village incentive for upgrades at Westfield Hawthorn mall in Vernon Hills could reach $17 million, according to proposed terms of an agreement.
Negotiations are continuing as village officials have informally agreed to offer a sales tax rebate over several years to ensure that long-promised improvements to the community’s commercial hub move forward.
A bottom line number of how much the company needs, the length of the agreement, amount of a “discount rate” applied to balances due and specific sources of the sales tax revenues are to be finalized.
“I’m all in favor of helping Westfield make this major investment,” said village Trustee Jim Schultz. “We’d like it to be more of a centerpiece or showplace like Old Orchard or some of their other properties.”
The village board Tuesday directed staff to continue discussion with Westfield to refine the sales tax incentive package for an estimated $50 million renovation and expansion of the `70s-era mall at routes 60 and 21.
Westfield wants the village to give them $9.4 million as a sales tax rebate, with that money earning 7.5 percent interest on the unpaid balance over the suggested 10-year term of the agreement. That would be a total incentive of $17 million.
Schultz said that rate seemed high and questioned a suggested provision that could extend the life of the agreement, resulting in an even higher ultimate payout.
“We’ve got to get to, `What’s the number that you need?’” he said.
The source of the sales tax revenue also is being refined. In past incentive packages, the village has rebated a percentage of “new” money, meaning sales tax generated above the average before the project began.
In this case, the village may be using a portion of existing sales tax funds, meaning it would be rebating some out-of-pocket revenue.
Sales tax from the four anchor stores — Sears, Macy’s, Carson’s and JCPenney — would not be included because they own their properties. The rebate would come from new arrivals and the other existing stores, but would not include amusement tax revenue.
The village already has given the majority of approvals to allow the project to proceed. Building permits are being reviewed and work is expected to begin in 60 to 90 days.
The key feature of the plan is a $6 million, 12-screen AMC theater at a new entrance to be built between Sears and JCPenney, with space below for new restaurants. Westfield recently signed a lease with the theater chain, a detail village leaders have been awaiting as a sign the project — introduced about a year ago — actually will proceed.
Another major element is the location of a Dave & Buster’s arcade/restaurant with as many as 200 electronic games in renovated space within the mall. Both the theater and arcade will serve alcohol.
Design changes at the three mall entrances also are planned as part of what is considered a rebranding by Hawthorn into an entertainment destination. The number of restaurants or other uses has not been determined.
“There are other things we’ll bring along people will be happy to see,” said John Genovese, senior vice president of development for Westfield, who attended the board meeting with other company officials.Copyright © 2013 Paddock Publications, Inc. All rights reserved.