Tax districts to consider revoking agreement with Target

Comments (...)

E-mail this story

Print this story

Comments

Share

DeKALB – The city of DeKalb has taken the lead in a call to rescind an agreement that was made with other taxing bodies and Target in 2004 because the company has not met required employment benchmarks.

Other taxing entities are considering similar action. The agreement gave Target a five-year property tax abatement for its distribution center in Park 88, in which 90 percent of taxes would not be collected the first full tax year after the building began operations, 80 percent the second year, 70 percent the third year, 60 percent the fourth year and 50 percent the fifth year.

As part of the deal, Target was to employ at least 500 full-time workers at the distribution center through Nov. 1, 2009. In property tax year 2009, 434 people were employed, and city officials want to repeal the agreement for that tax year, thus getting the full amount of property taxes paid.

Target Corp. spokeswoman Sarah Reichs confirmed that the DeKalb warehouse did not meet employment obligations because of economic pressures. She stressed that the company did not lay off any workers, but that the job loss was a result of attrition and not filling positions.

Other taxing bodies that participated with DeKalb in an intergovernmental agreement were the school district, park district, library district, sanitary district and township. Additionally, the county and Kishwaukee College granted abatement through individual agreements.

Officials from the county, school district, park district, sanitary district and township said they each received a letter from the city regarding the agreement with Target and the company's failure to meet employment levels. Each taxing entity must vote separately if they wish to rescind their part of the agreement, and many officials said the item will be discussed at upcoming meetings.

"We did receive a letter from the city saying that they intend to rescind their third year, and we support what the city was doing," DeKalb County Administrator Ray Bockman said. The county board's executive committee voted to rescind the third year of the tax abatement at a meeting Tuesday night, and the full board will address it at its next meeting.

DeKalb Township Supervisor Pat LaVigne, who also is a county board member, added that while trustees discussed the agreement at the last township board meeting, they're waiting to see what the city does before making a decision.

"If they decide to take action, of course, we're going to also," she said. "It's not our gig, but because we're one of many taxing units, we just kind of follow the city."

On Monday, the DeKalb City Council had varying opinions on what to do.

Mayor Kris Povlsen suggested a pro rata approach. Because Target maintained 434 employees, or 87 percent of the 500-level minimum, he suggested they return 13 percent of taxes, the amount not met.

"I think it would be a bad business sign that if people wanted to come into our community, that it's an all-or-nothing thing," Povlsen said.

Fourth Ward Alderman Brendon Gallagher contended that the company already has saved about $1.6 million by cutting 66 employees from the payroll at the agreed-upon minimum wage of $12 an hour, and that the city should stick with the contract. He and three other aldermen voted to waive second reading and rescind the agreement, but the motion did not get enough votes and will be brought back for a final vote at the Nov. 23 meeting.

Though Target did not meet the contract terms, Reichs said the company remains "deeply committed to DeKalb and our investment there."

"We have no plans to go smaller or to leave the community," she said. "It's a great workforce and great location to have a distribution center."

Comments