Naperville City Council to vote on 1% sales tax for Heritage Square redevelopment

The long-debated Block 59 project in Naperville is inching closer to resolution.

A divided city council voted Tuesday to prepare ordinances creating a business district and approving a 1% sales tax for businesses in the Heritage Square Shopping Center to help finance a redevelopment of the area at the northeast corner of Route 59 and Aurora Avenue.

Known as Block 59, the project primarily is being funded by the owner - Brixmor Property Group - and future tenants. Officials said Brixmor will contribute $53 million, and $69 million will come from incoming restaurant and entertainment businesses.

If the city council approves the business district, the extra 1% sales tax would remain until $13.4 million is collected.

Even after the plan was revised by reducing the size of the business district, council members remain split. Tuesday's vote was 6-3 with Jennifer Bruzan Taylor, Ian Holzhauer and Theresa Sullivan voting against it.

Months after initially discussing the proposal, the business district terms could be approved as early as the March 21 city council meeting. The sales tax would be added to Heritage Square businesses starting July 1.

Attaining the business district designation requires the area to be deemed blighted. Based on occupancy rates they say have plummeted, Brixmor officials believe Heritage Square qualifies.

"It's our belief that this particular business district ... constitutes an economic underutilization of the area," said Phil McKenna, chairman of Kane, McKenna and Associates, a consultant representing Brixmor. "The equalized assessed valuation of the area has declined by over 16% over the last five years. Sales tax has declined precipitously."

Under the terms of the agreement, Brixmor would pay half the cost of a traffic light at the Jefferson Avenue entrance. City officials are asking other surrounding businesses, including Target across the street on Jefferson, to pay the remainder of the cost.

At last week's planning and zoning commission meeting, Brixmor representatives detailed the proposed redevelopment of the shopping center. Plans include the demolition of all but two buildings to make room for a walkable area with restaurant, entertainment and event spaces.

Brixmor officials said the redevelopment would create an additional $17 million in sales and property tax money for the city over the next 10 years. Indian Prairie Unit District 204 would receive an estimated $2.9 million.