Arlington Heights is awarding $1.3 million in tax increment financing district funds to bring a furniture and home decor big-box store to town, amid recent efforts to revitalize an aging shopping center along the Rand Road corridor.
The funds would go toward $6.7 million in planned upgrades by a commercial real estate investment firm to re-tenant a vacant 100,000-square-foot space within the Southpoint Shopping Center, which village officials say has struggled with chronic vacancies since the 2008 recession.
The firm, Tampa, Florida-based RPS Capital, recently purchased the anchor tenant space at 750 E. Rand Road and inked a letter of intent for a 10-year lease with At Home, a Plano, Texas-based home decor superstore chain.
RPS plans to repair the building’s facade, replace its roof, redo the parking lot and remove asbestos, among other site improvements.
The village’s contribution includes $627,000 for the roof, $473,000 for the parking lot, $115,000 for asbestos abatement and $85,000 for architectural and engineering services, according to terms of a redevelopment agreement approved unanimously this week by the village board.
The money is coming from the village’s fifth TIF district fund, which has a balance of nearly $4 million that’s been growing since it was set up in 2005. That’s when property taxes paid to local governments were frozen, and anything collected above that level was diverted into the special village fund for economic development purposes.
In late 2020, the village gave $1.4 million from that fund to the owner of the neighboring Town & Country Shopping Center, where a Raising Cane’s fast food restaurant has opened and a long-rumored Amazon Fresh grocery store is set to open this fall.
RPS requested more than $1.3 million, but in the end, the village and its consultant, SB Friedman Development Advisors, deemed the negotiated amount to be justified, in hopes of generating minimum sufficient market rate returns.
“This proposal would generate significant sales tax revenue for the community,” said Charles Witherington-Perkins, the village’s director of planning and community development. “It would be a significant investment in Southpoint Shopping Center. It would act as a jump-start for the remainder of the shopping center and also help solidify this area in Arlington Heights.
“There are very few viable retailers in the marketplace of this size that would take this space. So we were very pleased and excited when RPS Capital approached us.”
Bif Furniture, the last business to occupy the space three years ago, has been one of the tenants over the last 15 years to generate only “marginal” sales tax revenue for the village, said Perkins, who believes At Home is a different furniture store concept that will be more successful in town.
In late 2019, a proposal to tear down the building and construct a VASA Fitness gym was withdrawn; Perkins said it wouldn’t have generated any sales tax revenue. RPS also proposed an antique mall for the site.
The village’s agreement with the developer calls for construction to start in June and be done by November, though they have until the end of 2023 to receive the TIF funds. The deal also allows for the award of less than $1.3 million if the developer’s costs are less, or if revenues from operation of the store exceed projections.
In February, the village board approved plans for a new Chipotle and another still-to-be-named restaurant in outlots of Southpoint, along with a Consumers Credit Union.