The Plainfield Village Board on Monday night formally approved a number of measures for The Boulevard project, including a $2.5 million sales tax rebate for Costco Wholesale.
Trustees also approved a site plan for Costco and a special use request and two other measures for The Boulevard – a proposed shopping center on about 54 acres at the northwest corner of the Interstate 55 and Route 30 interchange that the popular membership-only wholesale club will anchor.
The sales tax incentive agreement is for a 50-50 split between the village and Costco. It includes home rule and gasoline sales taxes Costco generates, with a cap at $2.5 million or 15 years, whichever comes first.
All five measures were unanimously passed without discussion. All board trustees were present at the meeting.
Village Administrator Brian Murphy and Director of Planning Jonathan Proulx said after the meeting that the incentive was an important part of getting the project completed.
“The site has challenges with regard to stormwater and the like that makes it a little more expensive to develop,” Murphy said.
Costco also expects the new store to “cannibalize” customers from its existing stores in Naperville and Bolingbrook and was looking to “make sure their return on investment calculates out,” Proulx said.
The village expects to get about $400,000 to $500,000 in annual sales tax from the start and then over $1 million in sales taxes after the incentive is completed, Proulx said.
He said the village expects that agreement to be paid in full in five to six years.
The village had agreed to a $3 million tax rebate for the Route 59 Meijer back in 2005, which was “paid off well in advance,” Proulx said.
The agreement also stipulates that the store be open by Dec. 1, 2022. This is an added inducement for Costco to get the store built with “the clock ticking,” but it is projected to be open by November 2020, he said.
Proulx said the city of Joliet has been very supportive throughout the process. Joliet will not see any share of the sales tax from Costco but will see development later encouraged by the popular store, both Murphy and Proulx said.
The project falls in both Plainfield and Joliet, so the site owner – 55/30 Acquisition – needs approvals from both municipalities.
Plainfield trustees unanimously approved an intergovernmental agreement with Joliet on July 1 to share costs for roadway maintenance, mutual aid and sanitary sewer and water service for the project. Joliet is expected to approve all measures for The Boulevard project at its meeting later this month.
Proulx said the village also expects to vote on an incentive agreement with 55/30 in the next few weeks.
There are about $8 million to
$10 million in infrastructure improvements the developer needs to make for the site and has requested assistance from the village.
Last August, the village approved designation of the Route 30 corridor as a tax increment financing district to spur redevelopment.
Designation of a TIF district freezes the share of property taxes for all its taxing bodies at the start. If property values increase, additional revenues from property taxes above that amount for the life of the TIF are put into a specific fund the municipality can then use for necessary improvements – including infrastructure – in that district.
Proulx said this wasn’t done at the time “specifically for this project,” but to spur additional development on Route 30.
The upcoming agreement is “contemplated as a property tax sharing agreement [from the TIF] that would contribute toward the infrastructure improvements,” Proulx said.