BLOOMINGDALE – For years, the Stratford Crossing center and Bloomingdale village leadership have struggled to strike a tax-sharing deal.
Sandy Sigal, CEO and president of California-based NewMark Merrill, the real estate firm that owns the center, has been concerned about Stratford Crossing’s economic future ever since sales started plummeting at Dominick’s grocery store three years ago. The store eventually closed in 2012.
For about two years, Sigal said he has been in talks with village leadership to establish a tax-sharing agreement that would attract new tenants and pay for upgrades at the center.
Efforts to fill the 65,000-square-foot hole left by Dominick’s departure have been unsuccessful.
Though NewMark Merrill has seen some interest in the unit, Sigal said his firm’s focus has been “less on economics and more on making sure we had a mix that was right for the village.”
From a leasing perspective, Sigal said the center “has done generally pretty well” with the exception of Dominick’s.
But Sigal said his firm envisions something better for the center than today’s status quo.
“In retail today, if you’re not moving forward, you’re moving backward,” he said.
The firm plans to invest $3 million to $15 million in the center to fund upgrades such as fresh paint, signage and landscaping. But Sigal would also like to establish a tax-sharing deal with the village.
Essentially, he said, he’d like to come to an agreement in which any sales tax revenue generated above the existing base would be shared with the village to repay upgrade expenses and supplement rental costs.
“It’s important people understand we are not talking about taking money away from municipalities,” he said. “We are only talking about sharing in increased results.”
Bloomingdale President Franco Coladipietro said the village has already offered NewMark Merrill a tax sharing deal, which they rejected.
Coladipietro said he and the Village Board of Trustees met with Sigal several times and crafted a deal based on feedback from trustees and previous village tax-sharing agreements.
The proposed deal called for a sales tax-sharing plan and a one percent business district tax that would activate once the firm landed a large-scale tenant that the village deemed appropriate, he said.
Benchmarks relative to the tenants were also included in the plan.
“It was, quite frankly, a generous offer,” Coladipietro said.
But Sigal said he wants the deal in place as a tool to attract new tenants.
“We think we need the tools up front and [the village] wants to provide it to us on the backend,” he said.
Coladipietro said the village has successfully come to similar agreements with other retailers and shopping centers.
When Walmart built a 55,000-square-foot grocery store addition to its Army Trail Road location, the village agreed to an economic incentive deal.
“It was a tangible development that was moving forward that we could evaluate,” Coladipietro said.
But Coladipietro was careful to emphasize that “every deal is different, and every property is different.”
Manager of Stratford Crossing’s newly opened Bed & Mattress Furniture store, Mike Morris, said the company chose the center for its flagship location because Bloomingdale offered upscale appeal and provided a higher volume of traffic than its previous location in Schaumburg.
Morris said NewMark Merrill stands out as a management company by offering marketing and other tools to increase business for tenants.
Though his outlook for the bedding company’s future in Stratford Crossing is positive, Morris said a tax incentive deal would definitely help, especially if a larger tenant joined the center.
But without a deal between the village and NewMark Merrill, Sigal isn’t as optimistic about the center’s economic future.
The center has suffered, he said.
Coladipietro said the village is still interested in negotiating a deal with NewMark Merrill, provided it benefits both the center and the village taxpayers.
“If you’re going to do a deal in a center, first and foremost it has to benefit the taxpayers,” he said. “That has to be the overriding principle of any deal that ultimately gets approved.”