Walmart looks for tax rebate to build massive new store
By Hank Beckman For The Sun August 18, 2012 11:08PM
Walmart will close its store on Route 59 in Naperville if the City Council OKs a tax rebate package to help it build a much larger store on 75th Street. | Dan Cassidy~Sun-Times Media
Updated: September 20, 2012 10:14AM
Walmart is looking to build a Supercenter store complete with a grocery section in Naperville, but it may take a $1.7 million tax rebate to get the deal done.
On the City Council’s Tuesday night agenda is an ordinance for a sales tax rebate that could let the retail giant realize up to $1.75 million in sales tax savings over a 10-year period if it builds the massive store.
Currently, Walmart has a 120,000-square-foot store at 776 S. Route 59 in the city. Walmart wants to close that store and build a 170,000-square-foot store on 18.5 acres on the southeast corner of 75th Street and Beebe Drive.
Walmart officials say it is not possible to put the Supercenter store at the current Route 59 site since that location shares space with a Sam’s Club store.
Naperville officials say that retaining Walmart in town, and getting it to build an even larger facility which should bring in more tax dollars in the long run, is good for the city.
“This is fantastic for the city of Naperville,” new Naperville Deputy City Manager Marcie Schatz said.
Schatz, recently promoted to the post after eight years as director of the city’s Transportation, Engineering and Development Group, said that Naperville taxpayers would not have to invest any money up front for the project.
The proposal calls for the tax break to last for 10 years or until the rebate amount reaches $1.75 million, whichever comes first. The rebate will consist of all sales tax receipts from the state that exceed a baseline year figure for the current Naperville Walmart.
“The city is not forgoing any existing revenues as part of the proposed incentive,” city staff members say in a memo to the City Council.
The maximum potential rebate of $1.75 million represents the amount exceeding what Walmart is willing to pay to purchase the 75th Street property. Walmart officials have said that the project is not feasible without the city incentive to bridge that gap, city staff said.
With Walmart’s track record as a discount powerhouse and the addition of the grocery operation, many Naperville leaders feel that the incentive will prove to be a sure thing for Naperville’s tax base over the long run.
“We’re thrilled,” Christine Jeffries, president of the Naperville Development Partnership, said.
Jeffries stressed that retention and expansion of existing businesses are always a key objective of her organization and city government.
“It’s a fantastic addition to the city’s sales tax base,” she said.
Naperville Area Chamber of Commerce interim President Tami Andrew agreed.
“I definitely think it’s a positive for the Naperville taxpayer,” she said.
The ordinance needs only a simple majority to pass and has not been before the City Council for a first reading, which doesn’t seem unusual to city officials.
City Attorney Margo Ely said there is no requirement for a public hearing, but said that it wasn’t unusual for an ordinance to come up for a vote without a first reading on fairly non-controversial matters, which she believes applies to the rebate proposal.
“It’s just a win-win situation for the city,” she said.