On May 5, 2014, the City Council approved a Sales Tax Revenue Sharing Agreement with the developer of the Quad of St. Charles. The agreement provides an extra incentive for the developer to make physical changes to the site and recruit tenants. The developer will use its own money to fund the initial improvements to the site and attract tenants back to the mall.
Right now, the City collects sales tax from current mall tenants. That won’t change. The sharing of money is triggered by any additional sales tax created by new tenants and the mall’s redevelopment. Through this agreement, the City has agreed to split 50/50 with the developer, any sales tax revenues collected from future mall tenants for 20 years after the grand opening of the redeveloped mall.
This “pay as you go” incentive means the developer will not receive any money until there is an increase in sales tax created by new tenants at the mall. There is no financial risk for the City. The greater risk is not taking action and losing any existing tenants still at the mall.
What does a Revitalized Mall Mean to St. Charles?
Sales tax is important to the City. This revenue pays for many essential City services such as snow plowing and road maintenance. Revitalizing the mall generates new sales tax with new onsite stores and serves as a catalyst for the surrounding commercial properties. The developers are reconstructing the site and the existing building which includes new outdoor elements to showcase vibrancy and activity. This activity attracts new life to the mall site and, since this site is a major commercial anchor for the east side, has the potential to generate spill over activity to surrounding commercial properties. This creates new sales tax and vibrancy for the whole area. Through incentivizing the mall’s redevelopment, the City Council is making an investment in revitalizing the entire east gateway commercial district and promoting our financial prosperity.
Matthew O’Rourke, AICP, is Economic Development Division Manager for the City of St. Charles. For more information about the Sales Tax Revenue Sharing Agreement, contact O’Rourke at email@example.com or 630-443-4093.