Shoppers Will Help Finance Deerbrook
Developers’ plan calls for a special sales tax district to ultimately pay for nearly two-thirds of $26-million redevelopment of 40-year-old shopping center.
Photos
Nearly two-thirds of a $26 million proposal to renovate the Deerbrook Mall will ultimately be financed by customers of the shopping center if developer Gateway Fairview 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.
Earlier: Deerbrook Project Hits Snag
“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. You can vote here.
To better keep up with Deerfield news follow Patch on Twitter and Facebook.
Carol
7:32 am on Wednesday, June 20, 2012
Why would I travel to mall that wants to charge me a higher tax rate? The proposed improvements don't sound very innovative. It just a minor facelift to a totally out of date shopping experience.
johnny
7:48 am on Wednesday, June 20, 2012
I'm attaching a great argument that was forwarded to me:
The fact that the owners of Deerbrook Mall are requesting TIF support is completely unwarranted. The underlying purpose of TIF is to promote development when traditional development could not possibly occur without the incentive. Deerbrook Mall is not close to meeting that criteria. RREEF is asking for financial help for one reason and one reason only -- to make money at the expense of the patrons of the
mall -- directly the residents of Deerfield. The last renovation of the mall was poorly thought out, was done with poor long term planning and is vacant because the current space inside of the mall is generally undesirable. The current owners of the mall should not be given any incentive to renovate the mall! I fully agree that the mall is outdated and should be renovated. Ownership was aware that the mall was functionally obsolete when it was purchased. Rewarding them with TIF incentives is unnecessary and fiscally irresponsible. Let RREEF pay for the renovations - if they do a great job developing the parcel they can enjoy the profits that a well thought out plan will create. Although, TIF's appear to be a way to assist in development it is just another way for the private sector to receive public funding. The worst part of the concept is that the proposed TIF Is based on a sales tax increase - you are asking the users of the mall to pay for the owners renovation. Please reconsider!!
Thinking for the future
8:23 am on Wednesday, June 20, 2012
Johnny hit the nail on the head. Problem is, most public officials in this country, and especially this state, aren't savvy enough to know when they are being played. My 4 year old could probably convince this board to pay for her toys under the guise of "pumping money into the economy".
Anne
9:19 am on Wednesday, June 20, 2012
There is no incentive for the consumer to shop unless the developer makes it affordable. Shoppers paying for the priviledge to shop? What f-ing planet are they on?
Mara Meyer
8:28 am on Wednesday, June 20, 2012
I will definitely not make an effort ot shop at Deerbrook should an additional tax be 'value-added'!
enough
8:32 am on Wednesday, June 20, 2012
What a bunch of idiots! I'm already paying a premium to crook county for shopping there and now a want to up it by 1%. The place is dump from years of neglect. Let them use their own $ to renovate they then will have some incentive to do the job right verus a cheap cosmetic update funded by Deerfield taxpayers which will fail.
The Q
8:35 am on Wednesday, June 20, 2012
LOL......the Mayor is nuts!
Anne
9:17 am on Wednesday, June 20, 2012
Seriously, "Crook County" taxes are high enough, there is vacant space across the street and a 1% sales tax advantage, yes 1-3% is pennies, but everyone is looking to save money, and what guarantees do we as residents get that we see the money and it benefits the community. How stupid does the Village Board think the residents of Deerfield are...if Northbrook were in charge the mall probably wouldn't look nearly as delapitated.
Thinking for the future
9:39 am on Wednesday, June 20, 2012
And what business is going to want to come in to this new mall and immediately be at at a tax disadvantage to every other location??
Also, would this tax be applied to food items at Jewel, further crimping families that might be on a tight budget?
The Q
9:39 am on Wednesday, June 20, 2012
this mall has a tax disadvantage already and they think making it worse is going to help...........only in Deerfield does this make sense.
I mean you cant make this crap up if you tried......
Steve Sommerfeld
9:47 am on Wednesday, June 20, 2012
So people who already shop at TJ Maxx are going to be willing to pay more for the privilage of shopping at Deerbrook Mall? For the extra money at Jewel, why wouldn't anyone now go shop at the other jewel on Deerfield road or dominicks or whole foods for that matter. This is the most insane plan I have read of to date. We need new leadership. I would propose a boycott of the mall by residents of Deerfield if this goes through. The businesses in that mall cannot be in favor of this, it would never be good to promote business or new tennants for that matter.
Anne
9:54 am on Wednesday, June 20, 2012
There needs to be a concerted effort to let the Village know just how stupid this proposal is. This does not benefit Deerfield, and by the way when did it become the residents of Deerfield's responsibility to underwrite a venture capitalist! Tell the Village Board don't be uneasy, be like Nancy Reagan.....JUST SAY NO! http://deerfield.suntimes.com/13274887-417/deerfield-trustees-unsure-about-deerbrook-sales-tax-proposal.html
Dan Gelfond
9:56 am on Wednesday, June 20, 2012
Stop the insanity. The owners took profits and never took care of the mall and now want our help so they can profit more. Let them go out of business if they won't invest in what they own. I'm sure someone else would take it over.
NB
10:11 am on Wednesday, June 20, 2012
A disturbing aspect to this story is why only two of our six trustees objected to this plan? Our mayor wants more information? Seems like it was all right there in front of her.
Phil Abuster
10:17 am on Wednesday, June 20, 2012
Why the board didn't know about this plan - FROM THE VERY BEGINING, is another indication that they are in way over their heads. Let's get a group of people who understand business, looks at the big picture, and plans for the future to make Deerfield grow instead of patching things up with band-aids.
Anne
10:39 am on Wednesday, June 20, 2012
Right on Phil! It is time that the governing bodies of Deerfield work for the residents of Deerfield, not for the failed venture capitalist. It is not the residents of Deerfield's responsibility to bail out investors who made bad investments. Seriously the Sach's Center is a prime example.... instead of investing in a new facility the taxing body is spending money to maintain an older building with facilities that are outdate....for example the Therapy Pool!
RB
10:25 am on Wednesday, June 20, 2012
Mr. Seiden, I believe, was one of the only board members who voted against spending all the money on the pedestrian underpass. That proved to be the right decision as far as I'm concerned. It was a waste of money at the wrong time, too. Now, if he is against this Deerbrook project, that's further sign of it being a bad deal. The Village board needs to wise up! Asking shoppers to pay higher taxes when it's already higher in Cook County is really a bad idea. If the developer can't afford to develop the property, then sell to someone who can. They've let get run down, did a crummy half a$& remodel and now want help? Bogus.
RonnieTheLimoDriver
10:35 am on Wednesday, June 20, 2012
Hey, I want taxpayers to fund 50% of my business as well. Any takers?
Anne
11:02 am on Wednesday, June 20, 2012
Ronnie you are absolutely spot on it looks like the Village of Deerfield believes it is in the business of providing welfare to investors....Seriously in these economic times?
DAK
11:32 am on Wednesday, June 20, 2012
If people won't pay to improve our schools, why would they pay to build a shopping center? Are trying to ensure NOBODY ever moves to Deerfield!?
John Adorjan
11:49 am on Wednesday, June 20, 2012
I feel bad for the good people that run businesses in Deerbrook Mall but just having the nerve to present a letter of INTENT like this is enough for me to BOYCOTT DEERBROOK MALL! Who are these people? I've tried on and off for years to lease a space in the old interior mall but NEVER have they answered the phone or called me back. Currently I'm operating out of Highland Park and a second location in The Loop. I'm sure they could have made some money off of my business and I would have put a little life back inside there. Perhaps their failing to work with me at all over the years is because their INTENT has, for a long time now, been to keep the place falling apart and moving further in to insignificance? I'm not saying my little business would have turned things around for the place but if they'd have even made the smallest efforts with me it might have been a start. So even though it me be a little personal, I can't help but think they knew what they were doing all this time also knowing that eventually the time would come to claim that things are so far gone it can only be turned around on the backs of the taxpayers.
Did I say, BOYCOTT DEERBROOK MALL?
Anne
12:17 pm on Wednesday, June 20, 2012
John if what you are posting is true, then for sure the Village shouldn't give the leasors one dime; they clearly are looking for a handout.....if the Village is so damn rich, perhaps they should provide some property tax relief to the residents of the Village, This is a VERY BAD DEAL for the residents of Deerfield, Shame on the Village and Board for entertaining the idea in the first place.
Rich
1:40 pm on Wednesday, June 20, 2012
This is a truly stupid proposal for Deerfield. It's a great proposal for the owners. Stop this now. With a sales tax increase, the people who are shopping now at Deerbrook will stop shopping there. It's totally bad news for the Village. The Board should reject this proposal immediately.
David Greenberg
1:54 pm on Wednesday, June 20, 2012
If you think about it - there's NO gas stations on the Crook County side of the street because the higher gas tax makes it impossible to compete with the stations in Lake County. Drivers are highly price conscious, so they went across the street.
As it is, when I'm in the area, I'll stop at Deerbrook to pick up some items. But if Deerfield engages in their inane, wrong-headed move to INCREASE taxes, I can guarantee you I'll never shop there again, and I'll be certain to warn everyone off that I know.
As for the money not coming out of the City coffers because of the 1% surcharge: I have a nice bridge for sale here in Highland Park... cheap. It's simple logic that if you drive people away with surcharge that you'll capture LESS overall sales tax revenue, and that WILL have an adverse effect on city finances.
The best deal for the taxpayers is one in which the developers finance and pay for their own development 100% on their own. If it's SUCH a great deal, they surely won't have a problem doing so, right?
Bringin' Down Briarwood
4:18 pm on Wednesday, June 20, 2012
Um ,,, maybe this is a dumb question, but does phase two actually include rebuilding or renovating any space?
This thing is a mess!! I don't know if the Board is communicating poorly, but there's ABSOLUTELY NOTHING about this (since it was first reported months ago) that tells me business will be better or the property will even look better. The Board and the Trustees have communicated nothing to the public about new stores or upgraded facilities. How do you expect us to support this? WHAT ARE WE PAYING FOR? Do you and Gateway Fairview have any clue what you're doing?
Unlike others, I WANT to support some investment in Deerbrook ... if it's done correctly. However, you HAVE given me ZERO - NONE - NADA reasons to support this. The mix is stores is not changing as far as I know. I have no clue what the new property will look like. I have no clue about the environment you're trying to build. AND you're raising taxes? Why should I give you my money?
Let me repeat: I really want to support investment in this, but I won't give you my support blindly.
If this is all you have the information you and the developer are willing to provide, just forget it. Something is fishy. Time to start zoning the developer out of the property.
Bringin' Down Briarwood
5:17 pm on Wednesday, June 20, 2012
So here's my latest question ...
Why, oh why is the proposed sales tax NOT applicable to the Wonder space? Yes, that is part of the proposal.
I suggest all of us better educate ourselves on this. You can watch the Board's discussion online at http://deerfieldil.swagit.com/player.php?refid=06182012-124.
I haven't watched the whole thing. I assume there's an answer about the Wonder space, but that little gem is 2 1/2 minutes into the online video
Bringin' Down Briarwood
12:30 am on Thursday, June 21, 2012
A few things based on watching ...
1) Mr. Seiden made a great point about the true benefactors of this. (Please tell me if I have this correct!!!) My understanding is that the property is within Deerfield however the taxing body is Cook County and essentially Northbrook. Is that true? If so, why has nobody brought Northbrook into this conversation? If business increases and tax revenue with it, NB is the benefactor, correct? Please tell me I'm wrong about this because if I'm correct, this would make a bad move even more stupid.
2) Geez, this is amatuer hour. The developer has trained professionals and the Board is fumbling through the understanding of this like a bad condo association. PLEASE bring in a consultant!!
3) The politics - Make no mistake about it. Rosenthal and Street want this done. You can tell Street is positioning this as steps A-Z, and if you approve and complete A and B, well you gotta do C-Z.
4) The developer is so familiar with its property that they disclosed "Devin" Bank will be closing also.
Bringin' Down Briarwood
12:32 am on Thursday, June 21, 2012
5) One of the more telling sentences from the developer ... "Will people change their spending behavior for the sake of a penny? We've found ... the answer is 'no' unless there are really large purchases which we don't have these types of stores here."
So you're telling me that you don't plan on putting those types of stores there either.
You guys really aren't listening to the community, are you?
6) I found it VERY odd that a representative of the developer wanted to show a before and after of the mall and was abruptly instructed that the board did not need that. The trustee said they were more concerned with financing.
Once again, you might want to consider communication outside the room.
7) While we're at it, take a close look at the before/after plans. At a quick glance, there's nothing stunning going on here. We've heard it all, and that's pretty disappointing. They're tearing down the movie and indoor mall and rearranging the chairs on the deck of the Titanic in the same basic structure.
8) I still have yet to see how this will benefit the village, ESPECIALLY if my assumption in #1 is true. The village would not have to pay up front and the developer accepts all the risk. AND ...?
No discussion of new stores. No discussion of increased revenue.
I'd like to see investment in Deerbrook, but my original thoughts are on the money: this one is a dog. Send the developer back to the drawing board.
Amy Parker
6:09 pm on Wednesday, June 20, 2012
Yes, I agree. We do need to be better educated. Before we use inflammatory language or call for boycotts, we should find out everything we can about this matter. I'm grateful that because of better media coverage, residents know much more about this project in its early stages than we did about the malling of our downtown at a similar point in time. We have many opportunities to speak to our Village commissioners and mayor and attend upcoming board meetings as this plan progresses.
We should remember that the Village does not own the property. The owner/developer can do pretty much whatever they want as long as they meet Village regulations and standards. We shouldn't blame the mayor or the board for things like the dopey "remodel" that did nothing to solve the outdated, unattractive nature of this mall.
I was at the board meeting where the tax proposal was made. A couple of points I noted. First, many municipalities make public/private arrangements with developers in this difficult economy, where bank loans can be hard to get. I believe Chicago is doing much the same thing in some areas. I'm not sure it's fair to characterize the mall proprietors as greedy scumbags--yet. They want the same thing residents want: a thriving retail space that looks nice and attracts businesses and shoppers.
The mayor was right to hold off on any approval until there is a clearer understanding of the tax implications. The board was being diligent. What are we mad about?
David Greenberg
6:29 pm on Wednesday, June 20, 2012
Now making them a LOAN is the best idea I've heard all day. Let the developers take out a first mortgage on the property from the Village at 6% over 15 years. If they default, the Village gets to foreclose and sell off the property.
This solves the problem of the developers not being able to get a bank loan, and the problem that the residents would have with losing sales tax dollars. It also keeps the risk where it belongs - on the developers. The taxpayers are protected.
The Q
7:20 pm on Wednesday, June 20, 2012
With Credit tenants like they have with long term leases getting a loan should not be an issue with a good developer........what is becoming obvious is the owner is not very good. That is prime real estate and any developer that was serious about the deal would be making a much bigger investment of the project to maximize long term value. If they want a partner let them go find one.........if the Village is going to pony up 2/3 of the money does that mean we are going to own 2/3 of the deal after all is said and done.....
Bringin' Down Briarwood
12:48 am on Thursday, June 21, 2012
RE: What are we mad about? / The owner/developer can do whatever they want
That's what I'm angry about. If the village takes that attitude (and it does ... I've heard the phrase too many times), then of course the developer can do whatever they want.
However, if the village leaders are CREATIVE - let me say that again ... creative - vigilant and reasonably smart negotiators, then the village can DRIVE the project - not react and hope for the best.
Instead they are fumbling their way their way through this with most of the Board ready to approve a HORRIBLE deal. The reaction of that meeting SCREAMS for a consultant and study, but most of the board thinks they have this figured out.
This should have been addressed a long time, and this deal will only make it worse.
Bringin' Down Briarwood
10:44 am on Thursday, June 21, 2012
Excuse me, but one more thing.
It's pretty obvious this plan is for a short-term fix. The developer has regularly demonstrated no long-term plan. I think that should be STRONGLY considered and a new plan should include a 10-20 year commitment at certain revenue levels.
Anne
7:36 am on Friday, June 22, 2012
Voice your opinions of how stupid and fiscally irresponsible this plan is here are the e-mails of the Mayor and Trustee's they need to know that this is BAD FOR DEERFIELD harrietrose@comcast.net
bobbenton@prodigy.net,
alfafoxtrot1@gmail.com,
tapjester@yahoo.com,
mmoart@comcast.net,
wss5@comcast.net,
bjstruthers@bjsltd.net
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