New Lenox revises sales tax rebate
BY ERIN GALLAGHER Correspondent August 29, 2013 9:06PM
Updated: September 4, 2013 7:51PM
New Lenox trustees have approved extending a sales tax rebate for the developer of the New Lenox Town Center, which is anchored by the Wal-Mart Supercenter along U.S. 30.
After a lengthy discussion, the board on Monday night week voted 5 to 2 to continue rebating to McVickers Development 1 percent of the village’s 2.5 percent sales tax on revenue from the retail center. Under the original agreement, the rebate was to drop to .7 percent from 2016 through 2024.
Mayor Tim Baldermann said the village gets about $1 million per year in sales tax income from the shopping center, and about $600,000 is returned to McVickers.
The tax rebate was approved in 2007 to reimburse McVickers for $9.75 million worth of infrastructure costs, including improvements to U.S. 30, that allowed the center to open earlier, providing New Lenox with sales tax revenue sooner, Baldermann said.
Since the original deal was negotiated, the village has gained more tax revenue than expected and the developer less, largely because the poor economy forced McVickers to offer leases at a lower rate, according to the mayor.
Also, New Lenox in 2008 approved home-rule authority and raised its portion of the sales tax by 1 percentage point to 2.5 percent.
“He (developer John McVickers) made a deal, it didn’t go through, I’m sorry, that’s business,” said Trustee David Smith, who opposed the measure along with Trustee Ray Tuminello, calling it a “bailout.”
Baldermann disagreed, saying that even with the extended higher rebate McVickers stands to recoup only about two-thirds of its investment.
“The mayor is right, we are not looking to get any additional funds than what we bargained for,” McVickers told the village board.
The new agreement still caps the developer’s maximum incentive at $9.75 million or the total received through 2024, whichever comes first.