Hanover Park wants tax breaks for Hanover Square strip mall

Trying to get the village out of the business of running a strip mall, Hanover Park officials are lobbying Cook County to award property tax breaks that could persuade a developer to buy the 10-acre shopping center along Barrington Road.

The village is applying for the incentive as the owner of Hanover Square. But under the terms of the deal, the perk would benefit the village or any new owner for the next five years.

Since this past spring, the village has been in talks with a developer who made an offer to buy and turn around the aging mall, just northwest of Lake Street. Community Development Director Shubhra Govind said she's hopeful the two sides can reach agreement in early 2015. Officials have signed a confidentiality agreement, so she wouldn't comment further.

Without the county's "Class 7C" property tax incentive, redevelopment of the site isn't economically viable, officials say. Attracting new tenants to the shopping center has been difficult, despite a prominent location near the Elgin-O'Hare Expressway. And its two buildings also need a new facade and more modern upgrades, officials say.

If the Cook County Board approves the tax breaks, the property would be assessed at 10 percent of its market value for the first three years; 15 percent for the fourth year; and 20 percent for the final year. Typically, commercial real estate is assessed at 25 percent.

"The benefit is it makes the property more competitive with the way property taxes are assessed in other counties," said Govind, noting that the mall is near the DuPage County border.

In December 2011, the village bought Hanover Square for $2.8 million, with the goal of making improvements to the deteriorating property. The village has paid for the demolition of a closed, stand-alone restaurant, as well as repairs to the parking lot, utilities and roof, among other projects.

This year, the village kicked in more than $700,000 to renovate a 10,900-square-foot space into classrooms and offices for the Education and Work Center. Opening in August, the facility, run by Elgin Community and Harper colleges, provides job training and free courses for adults.

Officials hoped the investment pays off by making the mall - over 40 years old - more valuable to a developer.

Although Hanover Park has long marketed Hanover Square, village planners in January asked developers and real estate agents to get back to them by mid-March with their vision for the mall. There were only two offers to purchase it, one of which the village promptly rejected.

Officials, though, brought in a consultant to manage the ongoing negotiations with the developer behind the other offer.