Village Examines Details of Deerbrook Deal

Trustees and Village officials making sure the total effect on Deerfield will be positive.

A complete understanding of the financial impact of the renovation on Deerfield is the reason it could take the Village as long as three months from the initial presentation by the shopping center owners to arrive at an agreement.

asked for forms of sales tax assistance to help shopping center owner Gateway Fairview offset $16 million of the estimated $26 million cost of redevelopment.

The two-pronged proposal called for recoupment of $10 million from a sales tax sharing agreement and $6 million from .

“We don’t want to create the impression this is going to be in effect everywhere in the Village,” Village Manager Kent Street said. “There was some concern people might not shop (because of the additional tax) and then not go to other stores (outside Deerbrook) as well.”

An additional $10 million will come from a sales tax sharing arrangement allowing the owners 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.

The potential revenue for this part of the recoupment will also come from all goods and services subject to sales tax at Deerbrook. This is one of the reasons Street is taking a cautious approach.

“We want to make sure we are doing the right thing,” Street said. “Anything that affects the Village’s revenue we take very seriously.” Street and his staff are working closely with financial advisors Kane, McKenna to make sure the numbers are precise. “There is a difference between actual costs and estimates.”

When the proposal was first made, Trustees William Seiden and Alan Farkas objected prompting Mayor Harriet Rosenthal to postpone the discussion while more information was gathered. It was important then and still is that there is consensus.

“There are a lot of details to be looked at,” Rosenthal said. “We want to know what this means for the Village and Deerbook in the long term.”

The first segment of the project 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.

David Greenberg August 08, 2012 at 04:15 PM
There ya go folks - $10 million in "sales tax revenue sharing" - this means $10 million LESS for Deerfield to utilize for the Village's own needs. What's the impact of THAT going to be for residents? Questions to consider: * How much annual sales tax revenue is captured from the Mall now? * What's the ROI on that $10 million? One year? Multiple years? This is how long the impact will be on the Village's residents if they have $10 million less to utilize for the Village's needs. * If the mall brings in more than $10 million in sales tax revenues annually, how much more? That's what the Village will have to work with for the Village's needs. * What will be cut or impacted as a result of redirecting $10 million to a private party's pocket? As for the $6 Million TIF - you can bet that if there's any additional sales tax amounts assessed at that mall, that people will avoid it if and when they can because it's already on the Crook County side of the street and taxes are already higher than Lake County. Adding another 1% is just insane. Given that the Village likely won't post signs at the borders of the TIF district, once shoppers notice the higher tax on their receipts, they likely won't be back. And if they're not shopping there, they probably won't stop anywhere else in Deerfield because the perception will be that the tax is in "Deerfield". TIF=lousy idea, and not even what TIF's are supposed to be used for. If your Board votes this in, vote them out!
A Deer in a Field August 08, 2012 at 05:03 PM
And Ray, remember, this is Cook County, where the taxes are already higher than Lake County.
A Deer in a Field August 08, 2012 at 05:09 PM
Here's another idea: Loan the Owners the money and have the property as collateral. If they default, take it over and resell it to someone who can make this prime site profitable. Done. And it would seem to me that Northbrook would benefit greatly from this project, who not collaborate that village?
Bringin' Down Briarwood August 08, 2012 at 06:51 PM
Pretty discouraging ... Hmmm, here's an idea: if you're worried about the perception and reaction, just maaaaaaybe you should have some public discussions about the project and measure community support. I'd even settle for some quiet market research. Maybe it's just me, but I get the feeling this thing is going to be pushed through, no matter what. Meanwhile, the village is trying to fit a circle into the square that is the community's support of this idea.
Bringin' Down Briarwood August 08, 2012 at 06:56 PM
RE: Northbrook For the life of me, I don't understand for a second why Northbrook hasn't been brought in as part of these discussions. It's my understanding that they will receive an equal share - if not more - in tax revenue. So why won;t they be involved in the investment. There are so many sides of this that the village is handling poorly.


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