Developers seeking sales tax rebate for East Dundee business park project
Developers are seeking a sales tax rebate deal with East Dundee to help spur a wave of economic activity at the Terra Business Park.
Joe Palumbo of PAL Land LLC has proposed constructing two new developments along Route 72 and Christina Drive - a $6.8 million investment, not including the cost of infrastructure upgrades, said his attorney, Peter Bazos.
The first building, a 12,000-square-foot multitenant "commercial center," would contain retail and restaurants, including a drive-through at each end, Bazos said. The second would offer 46,000 square feet of commercial and industrial space, some of which would be used by Trident Custom Coatings, a specialty firearms business that is expanding and relocating from within the village.
The village board will vote next week on an agreement that would offer a 40 percent reimbursement of all sales tax revenue generated at the new developments for 15 years. If the two buildings bring in an anticipated $225,000 in annual sales tax dollars, documents show, developers would recapture about $90,000 per year, while the rest would go to the village.
"The good thing about this agreement is that it motivates the developer to find someone who produces more sales taxes than other (tenants)," Village Administrator Jennifer Johnsen said. Several trustees also voiced their support for the proposal Monday.
The project coincides with plans for an adjacent Speedway gas station, Bazos said, noting that construction on all three sites would likely begin in the spring. A traffic light is also expected to be installed at the park's entrance off Route 72.
The developments would also complement the other businesses and special uses - such as truck parking, offices and Enterprise Rent-A-Car - that Palumbo has brought to the area since the park was established about a decade ago, he said.
"This park has gone from a vacant piece of property to a vibrant piece of your business community," Bazos told trustees Monday. "We've come this far, frankly, because of the assistance the village has given."
The sales tax rebate, if approved, sets the framework for a similar pay-as-you-earn incentive for two other properties slated for future development by Palumbo, Johnsen said. One parcel near the entrance of the business park could be well-suited for a quick-serve restaurant, PAL Land representatives said, while another 20 acres to the west may be reserved for truck sales or even a hotel.
The sales tax incentive would also offer additional revenue to help Palumbo recapture a $5.7 million investment into the business park's infrastructure, Johnsen said. As part of a 2007 deal, PAL Land receives 90 percent of tax increment financing revenue generated at the park, she said, but annual revenue streams have indicated those expenses won't be reimbursed through TIF dollars alone.
"This is a way in which to pay him back for some of the infrastructure improvements since its harder to get it through TIF revenue," Johnsen said.