Vernon Hills approves another incentive
The company that owns the Townline Commons Shopping Center in Vernon Hills won't receive exactly what it wants, but village trustees agreed an incentive is needed to attract a new national tenant.
A pending agreement with JDK & Overlook Townline LLC would provide a substantial sales tax rebate during 10 years.
No longer rare for the village, this would be the fourth such agreement in the past year as the village scrambles to protect its extensive sales tax base in a still rocky economy.
JDK is proposing to bring an HH Gregg Appliance store to the vacant space formerly occupied by Plunkett Furniture in the retail area along Route 60. The Indianapolis-based Gregg is proposing six to eight new stores in the Chicago area next year and has identified Vernon Hills as a possible location.
Village staff on Tuesday was directed to work out the details for an official vote later, although with a maximum rebate to be scaled back from the $865,000 the company sought.
“We basically told them they need to bring it down some,” Trustee Jim Schultz said.
Denver-based JDK owns about 100,000 square feet of space between Walmart and the Petco/Toys R Us. That area is nearly half empty and the owners have been forced to lower rents to keep Golf Galaxy and Office Max as tenants, according to the village.
The rebate would be used for site improvements, such as roof and system repairs and exterior renovations. Aside from the rebate, the company plans to spend more than $1.1 million to improve the center.
Plunkett provided the village with about $25,000 a year in sales tax revenue, according to Schultz. Based on sales of $15 million, the projected annual sales tax revenue to Vernon Hills from HH Gregg would be $150,000.
“They're bringing us a tenant they're saying will generate more than we would have had before,” he said.
As envisioned, the village would get the first $50,000 in sales tax, JDK would get the next $50,000 and anything over that would be split.
The company has a deadline to make the Gregg deal work, Assistant Village Manager John Kalmar said, and the staff will work with JDK on improvement plans and other details.
Though it has at times been reluctant, the board has determined incentives are sometimes warranted, as rents have dropped significantly and keeping and attracting tenants remains a problem.
“It's a tough thing to swallow,” Schultz said.
The first rebate since CDW got a sales tax break in the 1990s was offered last fall to the owners of the Hawthorn Hills Fashion Square shopping center. The $1.2 million allowed the owners to bring in Dick's Sporting Goods as an anchor and make substantial property improvements. That project is nearly complete.
Subsequent breaks were given to the owners of the former Circuit City store, which will be renovated for use as a CompUSA/Tiger Direct Superstore. Demolition permits for the interior have just been issued.
This past summer, the village agreed to rebate $955,000 in sales tax to the developers of the Shoppes of Gregg's Landing along Milwaukee Avenue for a Mariano's Fresh Market, which is under construction.