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updated: 1/14/2014 7:41 AM

Filling West Dundee's Target vacancy might not be easy

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  • The Village of West Dundee has been hit hard with two of its largest tax generators leaving town. Best Buy, far left, closed in 2012. Target is slated to close in May.

       The Village of West Dundee has been hit hard with two of its largest tax generators leaving town. Best Buy, far left, closed in 2012. Target is slated to close in May.
    Christopher Hankins | Staff Photographer


With Target's looming departure from West Dundee, securing another retailer might not be as easy as some people think.

Target developed its site on Route 72 and owns the building it will vacate in May, Village Manager Joseph Cavallaro said. It also owns the vacant site east of the empty Best Buy building and has an agreement that gives it the right of first refusal on the Best Buy building.

For example, if another electronics store was interested in moving into the Best Buy building, Target has the right to turn it down.

"Yes there have been some inquiries into the Best Buy site, but negotiations have been complicated, due to Target's right of refusal," Cavallaro said.

The same may be true for the building Target now occupies -- a situation West Dundee hopes to head off by having a conversation with the corporation, Cavallaro said.

"Target may not be willing," Cavallaro warned, noting that the corporation operates nearby stores in Algonquin, Elgin and Hoffman Estates. "Target may not allow for another general merchandiser to take up this market."

What West Dundee officials do not want is for Target to do to them what the Dominick's grocery store did in East Dundee.

Dominick's, owned by Safeway, left an East Dundee strip mall in 2006 with 20 years left on its 25-year lease, Village Administrator Bob Skurla said.

The village has not secured a replacement because the lease bars the landlord from signing a grocery store that is not financially on par with Safeway and that's unwilling to pay what it pays in rent or more.

"The point was they didn't want a grocery store ... because they were still actively in the Chicago market," Skurla said. "The only person that fit that description was Walmart. Walmart is across the street."

Safeway continues to pay $48,000 a month in various taxes, as well as rent, insurance and common area maintenance.

But because so few tenants are willing to match Safeway's demands, the spot and several stores in the same strip mall remain vacant.

"It just has a completely chilling effect on everything that surrounds it," Skurla said, adding that things may be looking up since Safeway has left the Chicago market.

Target announced Friday that it would close its West Dundee store, along with stores in seven other states.

The closure means West Dundee will likely lose between $300,000 and $400,000 in annual sales tax from the big-box retailer. The village used the money for the general fund and officials won't discuss the financial ramifications until March when budget talks begin.

In 2013, Target paid $218,278 in property taxes to Kane County. Of that, $133,566 went to Carpentersville-based Community Unit District 300, $32,183 to the village, and $10,505 to the park district.

Target's departure comes almost two years after Best Buy closed its store.

Meanwhile, West Dundee hasn't had much luck getting through to Target leaders in the past.

Village President Chris Nelson said he talked with the retailer last summer about establishing a public-private partnership that would allow Target to reconfigure the location for a grocery store addition. Obviously, it isn't happening.

"If Target's fortunes were better, maybe we could talk about that, or increasing the footprint," Nelson said.

• Daily Herald staff writer Susan Sarkauskas contributed to this story.

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