East Dundee, IL. Wal-Mart Dumps One Town For Its Neighbor

Topics: Illinois | Community Impact

On April 5, 2006, Sprawl-Busters reported that the village of East Dundee, Illinois was in an uproar because a real estate listing showed that the Wal-Mart store in the village was being advertised as available for lease or sale by the winter of 2007, and that a larger superstore was going to be built in neighboring West Dundee. East Dundee Village President Jerald Bartels met with local Wal Mart officials, who seemed as surprised as he was.

The East Dundee store is not officially posted on the Wal-Mart Realty website yet, among the 326 other properties across the nation ready for sale. “We have no official word from Wal-Mart that anything is happening at this point,” officials told the Elgin Courier News. But this week Wal-Mart officially told the village it is shutting down its store in the East to move to the West.

One local official described Wal-Mart’s move from East Dundee as a “body blow” to village finances. “Wal-Mart has confirmed that they are actively in the process of identifying a new site for a super center,” announced Village Manager Paul Nicholson, after meeting with Wal-Mart officials three days ago. The East Dundee store generates about $600,000 a year in sales tax revenues for the village—a gross number, before subtracting out the substantial municipal expenses, such as police, fire and road maintenance, that the Wal-Mart costs the town.

Wal-Mart has indicated that it will be two years before their West Dundee store will open, so East Dundee can adjust during that period. West Dundee officials seem to have little qualms about stealing revenues from their neighbor. West Dundee’s Village Manager admitted that Wal-Mart is negotiating with General Growth Properties Inc., the owner of Spring Hill Mall, for a mall outlot that is commercially zoned.

To make matters worse, it appears that East Dundee will make the transfer of location possible through a deal between the two villages in which the East provides sewer services for West Dundee. So the West will be able to offer sewer to the new Wal-Mart stolen from East Dundee, by using East Dundee’s sewer system.

I believe that’s called contributing to your own demise.

East Dundee was considering creating a special tax deal for Wal-Mart to keep them in town, but it does not appear that West Dundee will have to offer incentives. West Dundee’s manager told the Elgin Courier News that his village is trying to increase its tax base, and no discussions about tax incentives have taken place with Wal-Mart. West Dundee’s manager told the newspaper it was “unfortunate that it (the Wal-Mart move) comes at such an expense to a neighboring community.”

East Dundee Manager said that hundreds of communities have experienced life after Wal-Mart. “Everyone wants to view this as an opportunity to grow and enhance East Dundee,” he said, “more specifically our entire corporate business and retail sales tax base.” Neither towns seems to have stumbled on the idea of regional land use planning, so they will continue the win-lose game of stealing each other’s malls. In California, where sales tax also drives local finances, state law now requires towns “stealing” mall revenues from another community, to share the added revenues with the losing town for ten years.

To see that story, search www.sprawl-busters.com by “Torlakson.”

Posted by Al Norman on Sunday, May 14, 2006