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Target left 2 locations but landlord kept TIF funds. Never again, Emanuel says
Mayor's executive order prohibits retail landlords who accept city subsidies from allowing tenant to close one store then open in different location
Mayor Emanuel’s executive order will bar retail landlords from accepting city subsidies if their anchor tenant plans to exit one location for another one in the city.
The move comes after Jaffe Companies accepted $13 million in city Tax Incremental Financing funds for a Target-anchored development. Then, last month, Target announced it would close two South Side locations but open in two other areas, one of them in the property Jaffe received the funding.
Target’s decision to shutter the two stores in predominantly black neighborhoods then move was panned by neighbors and politicians.
A spokesman for the mayor said the city has offered Target millions more in TIF funds to keep the stores open, according to Block Club Chicago, which first reported on the executive order.
The measure isn’t retroactive, but in the future, will prevent property owners from receiving assistance in such instances.
The executive order applies to retailers occupying 25,000 square feet or more, according to Block Club Chicago.
If the developer violates the agreement, the city can recoup the TIF funds.
In October, Target announced that it would shutter stores in Morgan Park and Chatham after determining they were not profitable. The retailer plans to open two new North Side locations, including one in Jaffe Companies’ $58 million Edens Collection project, which received the $13 million in TIF funds.
The second new Target will open in Fifield Companies’ Logan’s Crossing development in Logan Square.
Target’s exodus from the South Side will leave 250,000 square feet of vacant retail space.
Earlier this year, the Chicago-area retail vacancy rate hit 11.6 percent, the highest it’s been since 2010, and a half-percentage point shy of its post-recession peak.
In response, developers have significantly reduced the retail product they are bringing to the market, with construction of local shopping center space reaching an all-time low in 2018. Some landlords with big-box tenants have divided their vacant spaces into small retail options, and have begun considering different tenants, targeting fitness centers, entertainment centers and health care facilities. [Block Club Chicago] — Joe Ward