Naperville is pushing ahead with tax incentives that could breathe new life into shopping centers on opposite sides of the city.
The Naperville City Council voted 8-1 vote Tuesday to set an Oct. 4 hearing that would pave the way for establishing a business district on the east side at Chicago Avenue and Olesen Drive that qualifies property owners for a special Naperville tax to fix a flooding problem at the strip mall.
Upscale Heinen’s Grocery Store wants to buy the 7-acre strip center formerly anchored by Butera Market and is asking the city to collect an extra half percent sales tax from purchases made at businesses there to help pay for stormwater improvements on the property.
In a closer 5-4 vote, the council agreed to consider a similar request for the Westridge Court and Heritage Square shopping areas on Route 59 between Jefferson and Aurora avenues owned by the Brixmor Property Group.
Brixmor wants an extra 1% sales tax to pay for relocating water, sewer, utilities, parking lots and roads so it can remove vacant buildings that once housed big box stores and reorient the site with more shops and restaurants.
The Heinen’s plan was more widely accepted by the council, with several members expressing how the tax would improve chronic flooding in the shopping center’s parking lot as well as around the neighborhood that drains into the lot.
Councilwoman Jennifer Bruzan Taylor, who opposed both business districts, said it’s “unconscionable” to put an additional tax on the customers who will shop at the stores.
Mayor Steve Chirico said a business district is one of the few ways to solve infrastructure dilemmas without doing it on the backs of Naperville’s two school districts and without adding more students.
He noted that on the other side of Route 59 in Aurora, Indian Prairie School District 204 is watching commercial land being transformed into multifamily housing.
In a letter to the council, District 204 Superintendent Adrian Talley said Naperville’s Route 59 project will enhance his district from a financial standpoint and support its academic programs.
Unlike Naperville School District 203, which is able to generate 120% of its income from property taxes because of its larger business tax base, taxes represent only 84% of District 204’s revenue, Talley said.
“The more businesses we can bring to our district, the greater our chance to reduce the funding disparity that is current within our district,” he said.
Additional funding will enable Indian Prairie to maintain class sizes more aligned with 203 and staffing to enhance the educational experience for the students, Tally said.
Councilman Patrick Kelly said with Lazy Dog opening in 2020, he’s not sold on the idea that the Westridge Court/Heritage Square qualifies as a blighted area that’s in need of a massive makeover.
Councilwoman Theresa Sullivan said people should pay taxes that go to the public good, as is the case with the home rule sales tax, which pays for police, fire, sidewalks, snow plows and leaf pickup.
“Here we’re paying for somebody to build a prettier shopping center and restaurants,” Sullivan said.
Chirico said Route 59 is the longest border it has with another city, and Aurora has a 1.75% home rule sale tax compared to Naperville’s three-quarter percent.
Even if Naperville added the maximum 1% tax on shops in Westridge Court or Heritage Square, it matches what Aurora is charging on the west side of Route 59, he said.
“We’re not making this uncompetitive for the businesses, and it’s consistent with the surrounding area,” Chirico said.
The alternative, he said, “is that we don’t have the investment in the area, and it remains empty.”
Taylor said when the business district discussions return to the council, she’d like to see data on the projected revenue and the estimated benefit to the school districts.