Decline in Kmart building value to aid TIF

The nearly 40 percent drop in the fair market value of the Kmart building on MacArthur Boulevard since the store closed in 2003 should benefit the tax increment financing district created to aid development in the area, says Ward 7 Ald. Joe McMenamin.

Hy-Vee Corp. plans to open bids next Wednesday for conversion of the former Kmart, 2115 S. MacArthur Blvd., to a full-service supermarket. Construction should begin in June, and the store is expected to open in the spring of 2014, according to the company.

Aldermen approved $3.5 million in January from the newly created MacArthur Boulevard TIF to aid the Iowa supermarket chain with the construction costs, even though there is not yet any increased property tax revenue — the increment — in the fund. “That’s the best scenario for a TIF because you want to lock in that base year at a low level,” said McMenamin, whose ward includes the Kmart property.

The $2.4 million fair market value of the Kmart building in 2011 for 2012 property taxes was down from a little more than $4 million in 2003, the year Kmart closed, according to property tax records at the Sangamon County clerk’s office. McMenamin said the low value at the start should help build up TIF funds as quickly as possible to aid redevelopment.

Farmer added that the Hy-Vee project has been years in the making. “We first talked with their agents probably seven years ago,” he said. “The recession really slowed things down.”Hy-Vee plans to strip the exterior of the old Kmart building and to use the remaining infrastucture for the supermarket. The former Spillway Lanes bowling alley will be demolished for construction of the convenience store that’s part of the Hy-Vee project. The old Town & Country Shell station at MacArthur and Cherry Road and the former TitleMax building at the front of the lot will be replaced by parking and landscaping.