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City Council to Consider $4M Economic Incentive for Walmart Expansion

Half of the sales tax rebate would go to Walmart, while the other half would go to the real estate firm that manages the property, according to the proposed agreement.

Darien could end up paying $4 million in incentives to advance the expansion of  into a Super Walmart, according to an agreement up for discussion during Monday’s .

The city would pay out the incentive as a rebate on sales tax that Walmart collects after it completes the expansion, the proposed contract said.

Half the rebate, or $2 million, would go to Walmart, while Inland Southeast Darien, the real estate firm that manages the 75th Street property, would get the other half, the document said.

Both Walmart and Inland need the payments to help offset the “extraordinary costs” associated with the expansion, the document said.

“Wal-Mart would not incur these costs and proceed with this construction without the commitments of the city being made in this agreement,” it said. City Administrator Bryon Vana did not respond to a request for comment. 

The city would still collect the roughly $900,000 annually it gets in sales tax revenue through Walmart. Beyond that amount, up to $300,000 of the sales tax would return to Walmart each year, while up to $200,000 would go to Inland. The city would also be liable for interest at a rate of 8.15 percent.*

At that rate, it would take a minimum of eight years to satisfy the terms of the contract.

Walmart announced its intention to into a superstore in March 2011. The plan requires three businesses—,  and —to relocate east into the former Circuit City storefront. The Super Walmart would include a grocery store, bakery, deli and pharmacy. 

“The City, through its City Council, has determined that maintaining the economic stability of (Darien Towne Center) and further improving the Darien Towne Center by facilitating the Wal-Mart expansion are important development goals of the City by maintaining and expanding the City’s tax revenue base, maintaining and creating employment opportunities within the City, and otherwise furthering and advancing the health, safety and welfare of the City and its residents,” a resolution accompanying the contract said. 

Along with the economic incentives, the contract said the city will sell two properties behind the strip mall, equaling roughly 67,700 square feet, to Inland and Walmart. About 15,100 square will transfer to Inland, while Walmart will buy about 52,500 square feet. The sale price for the properties is not in the contract.

City Council is scheduled to meet at 7:30 p.m. Monday in . Hearings on electrical aggregation and the 2013 budget are scheduled to precede the meeting, beginning at 7 p.m.

Review a copy of the proposed agreement here.

*Editor's note: Originally this story said that the tax rebate would be collected at a rate of 8.15 percent of the annual sales tax collected through Walmart. However, 8.15 percent is the annual interest rate the city would pay on the rebate. The story has been updated to reflect the change. Patch regrets the error.

Mel Kunicki April 02, 2012 at 08:45 PM
Tau multi-million dollar companies and they want incentives?
Mel Kunicki April 02, 2012 at 08:58 PM
Ment to say "Two" multi-million companies...
Brad Drake April 03, 2012 at 12:23 PM
That's the way Wal-Mart operates. Hold small towns at gunpoint and make demands. If they don't get what they want, they leave, and destroy the economies of the cities.

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