Officials in East Dundee, Illinois are scrambling about trying to figure out how to plug the sudden hole in their revenue stream, now that Wal-Mart is apparently moving out. The news came as a shock this week — and it didn’t even come from Wal-Mart. According to a report in the Courier News, a real estate listing shows that the Wal-Mart store in the village is available for lease or sale by the winter of 2007. Village President Jerald Bartels met with local Wal-Mart officials, who seemed as surprised as he was. The East Dundee store is not officially posted on the Wal-Mart Realty website yet, among the 326 other properties across the nation ready for sale. “We have no official word from Wal-Mart that anything is happening at this point,” officials told the paper. But already village leaders are looking for ways to subsidize Wal-Mart to entice them to stay. The Courier News says the store is responsible for half of the village’s sales tax — creating an “all your eggs in one basket” scenario. Now Wal-Mart is taking the basket away. Two years ago, the village hiked the sales tax on nonperishable items by 1%, which reportedly generated $829,000 a year for the village, much of it produced at Wal-Mart. The village is looking at throwing a Tax Increment Financing (TIF) district Wal-Mart’s way, by which property tax levels are frozen for purposes of distributing property tax revenues. Improvements to water, sewer or roads could then be financed through the incremental increases in those taxes. Instead of supporting village government, the tax increments go to the property owner in the form of an enhanced site. The TIF would be designed to help Wal-Mart expand into a supercenter in East Dundee. The Courier News quoted Sprawl-Busters as saying that “offering Wal-Mart any form of financial incentives is a terrible idea… Tax rebates are a form of corporate welfare. People in East Dundee should remember Wal-Mart made $10 billion in profits last year. They are the largest retailer in the world and they don’t need welfare, and trying to subsidize them is terrible public policy and a terribly slippery slope.” Sprawl-Busters said Wal-Mart businesses in southern states like Texas and Oklahoma have closed down, killing the town twice: once on the way in, once on the way out. The company has 326 “dead stores” for sale to date, which add up to more than 24 million square feet of dark stores. In Oklahoma, three stores were closed in small towns and Wal-Mart built a superstore in a town called Bartelsville. “It just exposes the weakness of relying on one retail player to fund your government operations,” Sprawl-Busters said. “A town official should not feel this is the end of the world. There is life after Wal-Mart. East Dundee had a retail infrastructure before Wal-Mart, it can have a retail infrastructure after Wal-Mart.”
One village official suggested that it was time for East Dundee to focus on a “broader economic development plan.”
“We have to figure out what our niche is,” said Trustee Frank Scarpelli. “We have to figure out what type of business we can attract, and attract those businesses.” For now, it looks like Wal-Mart arrived in East Dundee with its bags already packed. The company is building a supercenter just a few miles away.