Nearly two-thirds of a $26 million proposal to will ultimately be financed by customers of the shopping center if developer can convince the Village Board of Trustees to go along with its ideas.
When some of the Trustees balked at certain points in the proposal, Mayor Harriet Rosenthal had the Board take a step back. Rather than approve a letter of intent at Monday’s meeting, the mall owners will return with a more detailed explanation July 2.
“Before we go forward I wanted more information,” Rosenthal said. “That’s why we sent them back to the drawing board so we can get more answers. When you have a project this big you want consensus.”
Unanimity among the six trustees and the mayor was not going to happen after Trustees William Seiden and Alan Farkas balked at some aspects of the proposal that they thought would have taxpayers ultimately footing $16 million of the $26-million bill.
“I think they’re being greedy,” Seiden said. “I don’t believe they won’t go ahead with it (if the Village does not agree to the letter of intent),” he added about his perception of the developer’s intent.
What the developer is actually proposing is a two phase project where the Village will create a special business district on the property that will allow both additional sales tax and a sales tax sharing agreement. There are numerous steps before anything is final.
Under this scenario, purchases at the mall will be subject to an additional one percent sales tax above and beyond what is now being paid up to a total of $6 million over a specified time, according to a draft of the owner’s proposal submitted to the Village. That money will be returned to the developer to reimburse it for the first phase.
“That $6 million is paid by the one percent sales tax,” Rosenthal said. It will not remove money from other Village revenue nor be charged anywhere but at the shopping center.
The first segment envisions relocating T.J. Maxx to a spot between the current Jewel and Office Max with Starbucks moving to a free standing location. The developer would ultimately recover all cost of the initial portion, according to the proposal.
In the second phase, the existing mall space and shuttered theaters will be demolished. Jewel will move to a newly rebuilt store in the current Best Buy space while its former environs become smaller shops. The estimated cost is approximately $20 million.
Gateway Fairview can recover up to half its investment in this portion through a sales tax sharing agreement with the Village. The owner will be able to keep 75 percent of all sales tax generated up to $10 million in excess of the average collected for the 12-month period ending April 30, according to a draft of the agreement proposed to the Village.
“We’ll be paying the money up front,” Mike Laube, a representative of the developer, said. Hal Frank, an attorney for the group, stressed the money involved is funds the Village does not now have.
Should the Board of Trustees agree to enter into the letter of intent with Gateway Fairview, it must determine the area is blighted meeting a specific set of standards prescribed by Illinois law, according to Frank. That is a requirement to create the special business district.
Patch is also coducting a poll to learn reader opinion about the financing of Deerbrook. .