Naperville ups sales tax incentive for Block 59, adds $1.85 million to deal

Naperville City Council members Tuesday approved adding $1.85 million in special sales tax revenue to help lure a furniture and home goods retailer to the Block 59 development.

In 2023, city council members approved a special business district, along with a $13.4 million sales tax incentive, to spur redevelopment at the northeast corner of Route 59 and Aurora Avenue.

Brixmor Property Group, which developed Block 59, sought an additional $1.85 million in sales tax incentives to aid in the demolition of a 28,000 square foot building in the Westridge Court portion of the development. It will be replaced with a new 56,000-square-foot building for the undisclosed retailer, Rich Dippolito, a representative for Brixmor Property Group, told council members.

“There’s just a lot of costs that go into it before you can even come up out of the ground,” Dippolito told council members.

City officials noted funding for the tax incentive does not come from property taxes. Rather, a special 1% tax is charged on goods and services purchased within the Block 59 business district to pay for the $15.2 million in tax incentives. The special tax is eliminated within 23 years or whenever the total amount is paid out, whichever comes first, city officials said.

“We believe we will be retiring our debt even faster with them here,” Naperville Mayor Scott Wehrli said.

While Naperville leads the suburbs in many retail sales categories, Wehrli said it lags in sales generated from furniture and home goods retailers. According to a report from Melaniphy & Associates, Naperville saw $198 million in sales in 2024 that were attributable to the home goods and furniture sector. Wehrli noted that it is $25 million less than where the city was in 2019.

Glenview topped the suburbs with $661 million in furniture and home goods sales, partly due to an Abt electronics store that draws customers from throughout the suburbs, Wehrli said.

Wehrli is hopeful the new retailer will serve as a similar shopping destination, attracting a large portion of shoppers from other communities.

As part of the agreement with Brixmor, the city will not sign off on the added sales tax incentive until a lease for the space is signed. Dippolito said he anticipates the lease will be signed by the end of the month and that the company will make a public announcement about locating in Naperville shortly after the lease is signed.

Though officials were pleased to learn of a new retailer locating in the development, two city council members questioned the need for the city to offer sales tax incentives to lure a larger retailer to Naperville.

“If I were given my preference, I would subsidize local businesses,” Councilman Ian Holzhauer, who also voted against the initial $13.4 million offered for the Block 59 development in 2023, said after Tuesday’s vote.

Holzhauer, who was joined by Mary Gibson in voting against the additional $1.85 million Tuesday, noted he recently talked to a downtown business owner who was struggling to pay for roof repairs and questioned why the city is offering national retailers incentives when locally-owned businesses are struggling.

On Wednesday, however, Wehrli said the city looks at the needs in different areas. He noted that the Block 59 area was a struggling retail area with high vacancy rates, while the city’s downtown district has strong interest from retailers and is not an area in need of “creative business solutions at this point.”