Politics & Government

Council Passes $4M Tax Rebate Deal Under Pressure from Walmart

The chain told officials it would relocate if City Council failed to approve the agreement, Darien attorney John Murphey said.

City Council unanimously approved a $4 million economic incentive Monday to help fund expansion into a Super Walmart.

The vote came with the caveat, however, that several council members said they felt there was no choice.

“We’re between a rock and a hard place,” Ward 6 Alderman Sylvia McIvor said.

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Walmart said it would leave Darien if the city failed to pass this deal, according to city attorney John Murphey. Because Walmart owns the building it occupies, the space could remain dark indefinitely, leaving a gaping whole in the Darien Towne Center strip mall and denying the city nearly $900,000 in annual sales tax revenue.

“It would be a knife in the heart to Darien Towne Center to lose Walmart,” Murphey said. Walmart did not respond to a request for comment.

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In the deal approved Monday, the city will still get that roughly $900,000 annual sales tax payout from Walmart. Beyond that, however, $300,000 of the sales tax collected each year will go to Walmart and $200,000 will go to Inland Southeast Darien, the real estate company that manages Darien Towne Center.

The terms of the agreement will be met once each company receives a total of $2 million. Murphey estimated it would take 12 to 15 years to reach the mark.

The city will also pay interest on the rebate at a rate of 8.15 percent. The city has the option to prepay the rebate to avoid incurring interest, but Murphey said it would have to hold off on payments until the Super Walmart opened.

Although Walmart has not disclosed specific numbers, Murphey estimated the Darien location will bring in about 25 to 30 percent more sales tax revenue annually after it becomes a Super Walmart.

Walmart told the city that the rebate is necessary because it plans to stay open throughout the construction, which will make the renovations more costly, Murphey said. He said the expansion would likely be completed within a year. The company has not shared the projected construction costs.

Inland estimates it will cost between $1.7 million to $1.8 million to relocate existing businesses within the strip mall and prepare the properties for Walmart’s expansion. Walmart plans to increase its square footage by 35 percent, Municipal Services Director Dan Gombac said.

and plan to move east into the space that once housed Circuit City, Gombac said. The timeline and plan for the stores' relocation has not yet been finalized, he said.  has decided to close its Darien store altogether because it’s competing too closely with the Panera in Willowbrook, he said. 

As part of the deal, the city and Inland will give Walmart a total of about three acres of property behind the store, Murphey said. Walmart will not pay anything for the land. 

McIvor asked Treasurer Michael Coren what he thought of rebate agreement.

“If I were negotiating this deal myself, I’d like some changes,” he said. “But I don’t think we have an alternative.”

Ward 5 Alderman Joe Marchese said the agreement is similar to the sales tax rebate Walmart arranged when it first came to Darien in the early '90s. 

“The idea of sharing sales tax revenue is not something new to this deal,” he said. “We’ve done this before.”

Mayor Kathleen Weaver said she supported the deal.

"I think it’s a good one," she said. "It ensures city will continue to receive this important sales tax revenue. It helps ensure our continued economic strength thanks to Walmart that will become Super Walmart."

Walmart representatives are scheduled to meet with city officials Thursday to discuss further details about the construction process, Gombac said. 


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