NORMAL — Normal is set to pay $800,000 in future sales tax revenue to bring a family apparel company and at least two more retailers to Veterans Parkway.
Normal City Council voted 5-2 to pass a 10-year revenue-sharing agreement with Phillips Edison and Company, which owns two connected shopping centers that include Bed, Bath and Beyond, Fresh Market and Petco, to bring national retailers to those centers, including the vacant former Dick's Sporting Goods store.
Scott Adair, vice president of community partnerships for Cincinnati-based Phillips Edison, did not identify the retailer in talks to use Dick's but said it's a national family apparel company looking to locate in Normal or a nearby community.
Officials did not address two more retailers to be added after reducing the spaces for Office Depot and Shoe Carnival, and Phillips Edison also hopes to build a small retail space in one of the parking lots.
Adair said a promise of public money makes the company more likely to spend the money necessary to improve the centers but stopped short of saying the deal would be scuttled without it. The company plans to spend $4 million improving the centers.
"We're going to be putting a tremendous capital investment into this center," he said. "This is about using shared resources for a common goal. ... You're competing with other communities who are doing the same thing."
Council members Kathleen Lorenz and Scott Preston voted against the deal. Council members Chemberly Cummings, Jeff Fritzen, R.C. McBride and Kevin McCarthy joined Mayor Chris Koos in voting "yes."
"We have invested in our portion of Veterans Parkway. ... Who wouldn't want to be across the street from Portillo's?" said Lorenz. "No matter what, under any circumstances, you'll do just fine there."
Preston said of the incentive: "Building something out of nothing, I'd feel more comfortable with it, but this doesn't feel in the best interest of the people."
"We don't know who any of these tenants are. How can they claim what the sales tax revenue is going to be?" said Marc Tiritilli during public comments.
Phillips Edison estimates $5.6 million in new sales tax revenue over the life of the deal. "A company driven by savvy investors is going to let this property sit? ... They don't need our money," he said.
McCarthy said the town has no risk in the deal because it pays nothing unless new retailers generate new sales tax revenue — council members did not discuss whether the new retailers could take business from other local retailers — and instead risks losing business by standing pat.
"This represents a strategy Normal has used to its advantage, and much of our ability to weather the current economic situation is because of agreements like this over the years," said Fritzen.
City Manager Mark Peterson said he appreciates that Phillips Edison is willing to invest in infrastructure repairs like roofing and heating and air conditioning that are necessary to maintain a building long-term but don't pay off with higher rents. The company bought both centers in the last four years.
"There is not a significant retail development along Veterans Parkway that has not benefited from a public-private partnership — in Normal or in Bloomington," said Peterson.