Judge mulls dismissal of East Dundee Wal-Mart lawsuit
A Kane County judge is contemplating whether to throw out a lawsuit seeking to stop Carpentersville from luring Wal-Mart to the village with $4.3 million from a special taxing district.
East Dundee is suing to block the world's largest retailer from obtaining money from the special taxing district, in part because the new location is about three miles away from an existing store that will close. East Dundee also argues that state law prohibits towns from using special tax district funds to recruit a business that has an existing location within 10 miles.
Kane County Judge David Akemann listened to arguments from attorneys on both sides late last week and will issue his ruling in coming weeks.
John Simon, an attorney for Wal-Mart, argued that East Dundee doesn't have standing in the case. He pointed to previous court rulings that showed a plaintiff must satisfy three criteria, such as having a distinct injury or harm - in this case the loss of sales tax revenue. Other conditions require that the injury or harm must be traceable to the defendant's conduct, and can be prevented by a judge's decision.
In this case, Simon said, Wal-Mart already has purchased and begun construction on a 24-acre site off Route 25, and Carpentersville has pledged financial incentives even if Akemann blocks that funding coming from a Tax Increment Financing district.
"Wal-Mart is going to leave East Dundee in any event," Simon said. "Even if the court would grant the relief they are requesting, it's not going to cure their injury."
Steven Varick, an attorney for Carpentersville, agreed.
"If this court says, 'You can't use TIF funds,' that's not going to save a dime of tax revenue for East Dundee."
In a TIF District, property values in a designated area are frozen for up to 23 years. As redevelopment occurs, the tax revenue from the increased property value, or increment, is used to fund infrastructure improvements within the district, or reimburse development costs.
Richard Gleason, an attorney for East Dundee, argues that without TIF funding the project would not go forward.
"Without this (financial) assistance, Wal-Mart is not going to close its East Dundee store. They can say it's not true, but it's an issue of fact," Gleason argued. "It's within 10 miles. We certainly have standing (in the case)."
The current East Dundee location brings in $60,000 to $80,000 a month in tax revenue for the village, he said.
The two sides are next due in court Oct. 30.