9/28/2006

Arlington Heights might seize property for SuperTarget: Chicago IL Daily Herald, 9/22/06

By Sheila Ahern

Four years ago, Arlington Heights village officials declared 35 acres at Arlington Heights and Golf roads blighted and in need of redevelopment.

A few years later, the board approved plans for a SuperTarget and acres of parking for the site.

Problem is, current property owners aren’t exactly packing up and calling moving vans.

In fact, they’re all still there.

Village officials could start condemnation and eminent domain proceedings in October to acquire property on about 20 acres at the northeast corner of Arlington Heights and Golf roads, according to village officials.

In December 2005, the village board approved a redevelopment agreement that included plans for a 174,000-square-foot SuperTarget store and up to 47,300 square feet of other retail shops for the site.

The development agreement gave Strategic Real Estate Services Corp. 45 days to buy land in the area, which features mostly businesses dominated by the International Plaza.

Without a single contract signed, that time period ran out Aug. 24, said Stephen Leonard, a principal with Strategic Real Estate Service.

“We had many conversations with property owners but we weren’t able to acquire any properties,” Leonard said. “We are now handing the ball back to the village.”

And the village has one bargaining tool Leonard does not — eminent domain, where the government seizes private property and pays the owner what’s determined to be fair market value.

“The next step would be for the village board to adopt an ordinance utilizing eminent domain,” said Bill Enright, deputy director of planning and community development.

It would be the first time the village used the power to acquire property for retail development. The issue could come before the village board in October, although board agendas aren’t finalized yet, Village Manager Bill Dixon said.

To make room for the SuperTarget, Leonard’s company tried unsuccessfully to buy properties such as the International Plaza, an abandoned gas station, the Arlin-Golf Plaza, the Kitakata Japanese Restaurant and three single-family homes, among others.

There are more than 40 stores in the International Plaza alone.

“Target is still firmly behind their commitment to build at the site,” Leonard said. “This is just a very fluid, unpredictable process.”

Village officials declared the site blighted in 2002, despite the objections of property owners and merchants — particularly those in the International Plaza who said the area already was redeveloping.

Since then the owners of XSport Fitness, Arlin-Golf Plaza and most recently the 160,000-square-foot International Plaza, have filed lawsuits against the village. All three suits maintain the area is not blighted.

Village attorney Jack Siegel said he disagrees.

“The village’s position is that we meet seven of the 13 criteria of the TIF statute,” Siegel said. “The statute also says we only have to meet five.”

The tax increment financing district allows the village to use the extra property tax revenue generated by the improvements to pay for certain redevelopment costs.

Village officials will square off in court Oct. 3 with the owners of XSport Fitness but are still talking to the owners of the Arlin-Golf Plaza. The International Plaza lawsuit was just served to village officials last week, Siegel said.

A village report from February 2002 states the International Plaza “demonstrates characteristics of an outdated shopping center and has evidenced chronic vacancies, poor layout (the ‘U’ shape impairs interior tenant visibility), and no strong anchor tenants.”

According to the December 2005 agreement, the developer will front the money to develop the site, of which the village will reimburse up to $19 million using TIF district money over the district’s 23-year life span.

TIF districts are controversial because government agencies such as schools, park districts and libraries are restricted to collecting property taxes based on the original value of the land. They won’t be able to take advantage of the jump in property value until the TIF district expires.

Instead, that money is diverted to a special fund that pays for improvements there, such as landscaping or sewer upgrades.


Chicago IL Daily Herald: http://www.dailyherald.com