Can a new special taxing district boost Spring Hill Mall? West Dundee looking at option

When West Dundee trustees approved a special taxing district in 2016, they were hopeful it would breathe new life into Spring Hill Mall.

The mall showed some signs of hope when a new theater opened in late 2016. Overall, however, the mall stagnated and key anchors closed shop. By 2021, the village saw the property value of its share of the mall drop from a base value of $7.6 million in 2016 when trustees created a tax increment financing district for the mall to $2.5 million in 2021.

Now trustees are considering scrapping the 2016 TIF district and creating a new – and larger – one. The new TIF district would extend to Huntley Road to the north, Route 31 to the east, Route 72 to the south and take in a Jewel grocery store to the west. And much like in 2016, officials are hopeful a new TIF with larger borders and a lower base property value will help transform the mall.

“Having this TIF in place will give us one of the necessary tools to facilitate a quality, long-term redevelopment for the property,” said West Dundee Village Manager Joseph Cavallaro, who said the mall has a 40% occupancy rate.

This week, trustees held a public hearing on the new TIF district. They plan to vote on the matter in February. Municipalities typically use TIF districts to help spur development on troubled or shuttered properties.

A TIF district freezes property taxes paid to local governments at their current level for 23 years. Typically, as redevelopment takes place, land values increase, bringing additional property taxes. Any taxes collected above the base level from within the TIF district go into a special fund to help pay for redevelopment costs.

Though there was some redevelopment around the mall, including the addition of the movie theater, the 2016 TIF never generated any money because property values did not increase, Cavallaro said.

Despite the failure of the first TIF, developers have indicated to village officials the money a TIF district could bring for redevelopment would be key to any transformation of the mall area, West Dundee Village President Chris Nelson said.

“The TIF would help us encourage responsible ownership and development,” West Dundee Mayor Chris Nelson said.

Carpentersville trustees last summer took similar action to what West Dundee is considering. A portion of the mall, which includes Kohl’s and the former Carson Pirie Scott store, falls within the village of Carpentersville’s boundaries.

In 2016, Carpentersville also created a TIF district for its share of the mall.

Like West Dundee, Carpentersville’s share of the mall’s property value dropped from $1.36 million in 2016 to $255,658 in 2021.

Last summer, Carpentersville scrapped the original mall TIF district and created a new one that takes in some property surrounding the mall, including the nearby Home Depot.

“This signals to the development community that this is a priority for the village,” interim Village Manager Ben Mason said of the new TIF district.

A consultant for West Dundee estimated the new TIF could generate as much as $72.75 million to use for redevelopment purposes. A tentative budget included $4.5 million for land acquisition costs. Mason said the Carpentersville TIF could generate as much as $58.5 million to help pay for redevelopment costs.

For its part, West Dundee envisions some type of mixed-use development with housing and retail taking up the 26 acres. Nelson and Cavallaro envision a more urban development with a grid-like layout instead of a ring road around a mall.

Michael Kohan, president and CEO of Kohan Retail Investment Group, said he plans to talk to village officials about the TIF district. Kohan Retail Investment Group purchased Spring Hill Mall in early 2022.

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