By: Brittany Flaherty Theis

Construction is underway for the expansion of the Chicago Premium Outlets mall in Aurora, Illinois. The 290,000 square foot, $110 million project will expand the mall by two-thirds, making this Simon Premium Outlets’ largest renovation nationwide. When complete, the mall will measure nearly 750,000 square feet, house more than 170 stores and have upgraded outdoor areas with fire pits, a pond, additional seating, and new landscaping. There will also be 1,900 new parking spaces. The expansion is expected to result in 500 permanent jobs, in addition to 300 construction jobs.

In 2014, Whitt Law attorneys Stuart Whitt and Josh Whitt represented the Batavia School District in negotiating an intergovernmental cooperation agreement with the developer and the City of Aurora to induce the expansion of Chicago Premium Outlets for the benefit of all parties.  The intergovernmental agreement provided for (1) the expiration of an existing tax increment finance (TIF) district, which provided over $86 million in “new property” assessed valuation to the School District and the City under the Property Tax Extension Limitation Law from existing improvements, (2) the construction of an additional $39 million of improvements in the expiring TIF district, providing for another $13 million of “new property” assessed valuation to the School District and the City, (3) reclaimed an abandoned manufacturing facility for further expansion of the mall in a newly created TIF district, (4) annual distribution of 10% of the tax increment surplus from that newly created TIF district to the School District and other taxing bodies, and (5) $4 million in property tax abatements collectively by the School District and the City to the developer over an approximate 4-year period.

Over the 4-year abatement period, the School District is expected to receive $650,000 in property taxes and TIF surplus from the mall expansion.  Once the abatement period is completed, the Batavia School District will receive nearly $1 million each year for the benefit of its educational programs.  Consistent with Illinois law, no property tax abatements will be granted for the School District’s debt service levies.  Significantly, the agreement bars the developer from contesting its assessed valuation below certain guaranteed levels through tax year 2035, protecting the tax base of both the School District and the City, as well as other taxing bodies.

Whitt Law is proud to have served an important role in moving this major project forward. Feel free to contact Whitt Law partners Stuart Whitt or Josh Whitt for assistance with ways to support and encourage development within your corporate boundaries.

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