Gurnee to spend up to $10 million for Macy's
Gurnee's elected officials Monday night endorsed spending up to $10 million in public money so a Macy's department store can be built in the village.
Village board members agreed the cash should be borrowed through the issuance of Midwestern Disaster Area Bonds, a federal program meant to help Illinois counties that sustained flood damage in 2008.
Gurnee Mills' parent company, Indianapolis-based Simon Property Group, would receive the maximum $10 million from the village to help pay for for construction of the Macy's where Circuit City had operated as part of a proposed redevelopment agreement.
As part of the negotiation for the $10 million, Gurnee wouldn't share sales tax proceeds with Simon after that agreement ends Dec. 31, 2012, said Village Administrator James Hayner.
Gurnee Mayor Kristina Kovarik said the $10 million would be money well spent because many retailers already are looking toward the village because of Macy's decision to open there. All six village board trustees informally backed the idea Monday night and expect to hold a binding vote Nov. 7.
"It's always scary spending money," Kovarik said. "I've always said we can't save our way out of this (recession)."
Simon's vice president of development, William Hammer, said demolition of the Circuit City, work on Macy's and other Gurnee Mills upgrades are projected at $20 million. He called Macy's a "loss leader" that won't bring in much rent but should attract many other quality tenants.
"We cannot go forward without the (financial) participation of the village," Hammer said.
Hammer appeared before the Edina city council in suburban Minneapolis in May seeking similar public money for improvements to Southdale Center, according to meeting minutes. He sought nearly $5.4 million for work estimated at $12.6 million to $15 million.
Edina officials responded that Simon should consider selling some mall property to the city -- with possible use for a water treatment facility or transit hub -- to finance the mall upgrades.
Retail businesses, commercial properties and hotels qualify for the low-interest financing secured through the tax-exempt bonds. The Illinois Finance Authority would handle the transction.
Gurnee would obtain a low-interest loan for the Macy's project from the sale of Midwestern Disaster Area Bonds. The federal program was designed to encourage the economic recovery and rebuilding of areas area struck by severe weather in 2008.
Construction on Macy's would start in spring with opening set for about the same time in 2013, Hammer said.