Should Normal give away $800,000 in tax breaks to a shopping center owner so that the town can reap $4.8 million in projected new tax revenue?
That’s the question facing the Normal Town Council on Monday night, when members vote on a proposed sales tax rebate for Phillips Edison, which owns the twin shopping centers on the northeast corner of College Avenue and Veterans Parkway. Phillips Edison wants to spend $4.1 million to remodel the shopping centers, in hopes of bringing in a tenant to replace Dick’s Sporting Goods—which recently moved to Bloomington—and other retail spaces.
The closing of Dick’s created an “unbudgeted hardship” for the center and adjoining retailers, Town of Normal staff said in a report to council members. Phillips Edison wants to “reconfigure tenant spaces the College Plaza Center to create smaller spaces that reflect current retail trends.”
“Those projects which are supported by public-private partnerships have greater odds of obtaining approval from the company’s internal real estate committee,” town staff wrote. “Without municipal support, these spaces could remain dark for some time.”
If approved, the town would rebate up to $800,000 in sales tax revenue back to Phillips Edison over a 10-year period, equivalent to around 20 percent of the total cost of the renovations. The town expects to see $4.8 million in new sales and tax revenue sparked by the renovations. (That $800,000 tax break would drop accordingly if Phillips Edison fails to make its own $4.1 million investment.)
The renovations include tenant improvements and buildout to backfill the former Dick’s space with an unspecified “national retail tenant,” the town said. The current Shoe Carnival and Office Depot spaces would also be downsized, according to the plan.
The shopping center owner is not the first to seek tax breaks from the Town of Normal.
Portillo’s won a sales tax break last year, and it’s now open for business. Automaker Rivian also lobbied successfully for a tax break from the town last year. The owners of the Hyatt Place in Uptown Normal asked for a tax break last summer but ultimately withdrew that request.
Phillips Edison is one of the nation’s largest owners and operators of grocery-anchored shopping centers. It manages more than $1.7 billion in gross real estate investments.
Also Monday, the Normal Town Council will discuss a draft version of the town’s comprehensive plan. It will also learn about the county’s 20-year solid waste management plan.
Editor's note: GLT General Manager R.C. McBride is a Normal Town Council member.
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