An existing plan and agreement linked to the Block 59 development are being amended to accommodate a new, undisclosed retailer interested in signing a lease within the business district associated with the project.
The core change relates to the amount of reimbursement Brixmor Property Group, the developer behind Block 59, can receive in exchange for redevelopment improvements within the district.
When the agreement was signed in 2023, the reimbursement over a maximum of 23 years was set at $13.4 million. The amendment, contingent on the new tenant signing the lease, adds $1.85 million to the amount, bringing the total to $15.25 million. A 1% sales tax is in place within the district in conjunction with the plan and agreement.
‘A home goods and furniture-type use’
Rich Dippolito with Brixmor went before the city council at its Tuesday, June 16, meeting and explained the rationale behind the requested amended business district plan and business district redevelopment agreement documents.
The next phase in Brixmor’s redevelopment within the Block 59 area is at the Westridge Court portion within the district, Dippolito indicated.
To accommodate the new retailer, approximately 28,000 square feet of existing retail space within Westridge Court is set to be demolished, and a new 54,000-square-foot addition will be added in its place. Brixmor estimates the cost of the demolition and the reinforcement of a shared wall within the remaining adjacent space will cost $1.85 million.
Dippolito said Brixmor had not initially planned to conduct demolition tasks of such a scale, but indicated the work is being done to accommodate the retailer. When pressed by the council, he described the new tenant as “a home goods and furniture-type use.”
“We hadn’t planned on demoing all of that,” Dippolito said of the planned work within Westridge Court. “We have to replace a lot of the utilities, in order to do that. We have existing tenants we need to work around. We have to replace all of their utilities, because they get impacted by this demolition work.”
Dippolito, who indicated the prospective tenant asked not to have its name divulged at this time, said he believed it would be a good fit for the overall Block 59 project.
“One of the reasons that we’re excited about this particular tenant is we believe that it will generate a lot of interest,” he said. “We anticipate the sales projections to go up quite a bit, which, actually, will, in turn, provide a lot of additional sales tax to the city of Naperville. I think there is a big public benefit from that standpoint.”
Signed lease agreement tied to the $1.85 million reimbursement
Councilman Patrick Kelly asked whether the added $1.85 million reimbursement would jeopardize the prospective tenant’s addition to Block 59.
Dippolito indicated a lease had not yet been signed. Prior to coming to council, he said he and others within Brixmor were reviewing “soft costs, in an effort to move the project along.”
“If we don’t get approval, I’m going to have to go back to our internal investment committee, and they’ll need to make a decision at that point, whether they want to move forward or not,” Dippolito said. “But at this point, I don’t have approval to move forward without this additional funding.”
Kelly, in response, said, “It’s a little tricky, because it’s kind of the chicken and the egg — right? — but that’s what I’m interested in,” Kelly said. “I want the project to be as successful as possible.”
Kelly in his commentary also said he was favorable to one estimate city staff drew up that suggested the incentive period could be shortened with this additional rebate added.
“I would love to shorten it, if we can,” he added. “I just don’t want to do that and have the taxpayers pay additional money, if the deal is going to happen anyway.”
Mayor Scott Wehrli spoke favorably of the amendments and the impact the new retailer could have on Block 59 — and Naperville, as a whole — if plans do indeed coalesce as proposed.
“Naperville’s retail sales tax revenues are leading in a lot of different areas, but we are lagging in that particular sector,” Wehrli said, referencing the home goods and furniture category. “It’s not because we don’t have customers in our town. I think it’s clearly because our customers are shopping in other cities that have these types of stores.”
Wehrli also said he agreed with Dippolito that the new retailer would mesh well with the existing tenants within Block 59.
“I think it’s a very complementary retailer to an area that’s predominantly restaurants right now,” he said.
Councilmembers vote against amendment, explain why
The council voted, 6-2, in support of amending the existing Block 59 plan and agreement. Councilmembers Mary Gibson and Ian Holzhauer cast the dissenting votes. Councilman Josh McBroom was absent.
Looking more broadly at Naperville and some of the current pressing needs within the community, Gibson said she could not support Brixmor’s ask of the city.
“I think it’s great that new tenants are interested in the business district,” Gibson said. “I’m not sure I can support $2 million extra being paid by the Naperville taxpayers on private property. Affordability is obviously something that we are considering constantly here on city council and in the community.”
Holzhauer referenced Ayn Rand, a Russian-American writer and philosopher mentioned earlier in the council meeting, for giving his take on Brixmor’s request. He prefaced Rand “is a little bit of a different ideological flavor than me.”
“I think one of the things she warns against is kind of this exact situation, where government gets in the business of approving private projects, and private business risks that were misallocated, yet absorbed by the public taxpayer,” Holzhauer said.
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