James Martell’s Logistics Property Co. won a tax break from a Chicago suburb after saying it would ditch plans for a $76 million project without incentives from the local government.
The company’s plans in Oak Forest call for 1 million square feet of warehouses on 43 acres just east of Cicero Avenue near the intersection of Interstate 57 and 167th Street, the Daily Southtown reported. While the development is projected to be a property tax bonus for the city, it could take as long as 20 years to see the pay-off after the suburban government granted Martell a tax increment financing (TIF) deal.
In February, Oak Forest established the city’s eighth TIF district including the project site. It will last for the next 23 years unless ended earlier, and allows for reimbursement to the developer by locking in property value baselines for all properties within the district, and taxing only at those levels even as construction projects raise values within the area.
Any taxing bodies, such as the city and school districts, will continue to collect taxes tied to that baseline amount and won’t be able to tax new value until the district expires. The developer could be reimbursed for up to $15.6 million in TIF funds for the project. Once the end of the city’s agreement with Martell’s company is reached, the taxing bodies will charge the property owners within the district at full values, including the increases driven by Martell’s development.
Logistics Property’s redevelopment agreement with the city states that the developer would be “unable and unwilling” to take on the project without those incentives.
Oak Forest officials said the project site is currently worth just over $1 million, and with a completed warehouse its value could rise as high as $35 million, marking a potentially big payoff for the city once it can tax the Logistics Property warehouse at its full value, once completed.
The proposed development site is bound by 167th Street to the north, I-57 to the east and south and Cicero Avenue to the west. It’s located across the highway from the developer’s LogiPark 57-80 in Country Club Hills, a development of 1.4 million square feet of warehouses that rose on a site where plans for an outlet mall stalled out after years of dormancy.
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— Victoria Pruitt