One village’s attempt to stop Wal-Mart from leaving it for another location three miles away has again been thwarted by the courts.
In an unpublished order filed on April 30, a panel of the Second District Appellate Court affirmed Kane County Circuit Judge David Akemann’s decision to dismiss a lawsuit the Village of East Dundee filed against Wal-Mart Stores Inc. and the Village of Carpentersville following the retail giant's announcement it was moving.
Wal-Mart began operating a store in East Dundee in 1989, but in following with its trend to open new, larger "supercenters," announced in 2012 it was moving the area's operations in East Dundee to a new location three miles away to Carpentersville.
East Dundee offered financial assistance, such as assisting with any property purchases, building renovations and site redesigns, to Wal-Mart if it would build its new supercenter in the village, but the retailer declined the offer.
East Dundee's complaint outlines an alleged conspiracy between Wal-Mart and Carpentersville to avoid a state law that prevents businesses from getting tax increment financing when moving to locations less than 10 miles from their previous location.
The Tax Increment Allocation Redevelopment Act lets municipalities create Tax Increment Financing (TIF) districts to redevelop blighted area with tax dollars. Businesses that build in those areas generally can get financial help from the municipalities.
But in order to avoid cities from poaching businesses from one another, the law prevents this money from going to businesses that close their doors in one city only to move less than 10 miles away to another city’s TIF district, unless that business proves it's making the move because of reasons beyond its control, like inadequate space or economic obsolescence in its current location.
East Dundee claimed Wal-Mart didn't meet any of the exemptions outlined in the law and asked the Kane County Circuit Court to prevent Carpentersville from using TIF district money on any matter related to Wal-Mart's relocation. The village also asked the court force Wal-Mart and Carpentersville to comply with the Tax Increment Allocation Redevelopment Act
Both Wal-Mart and Carpentersville filed a motion to dismiss the suit, arguing that they hadn't entered into a TIF agreement and therefore, couldn't be forced to comply with the act. Wal-Mart also alleged that East Dundee didn't have the ability to file the case because it doesn't receive or pay Carpentersville taxes.
East Dundee filed an amended complaint that pointed to a Carpentersville resolution, Wal-Mart testimony and documents that supposedly indicated the retailer intended on asking for TIF district money from Carpentersville.
The trial court agreed with Wal-Mart and Carpentersville and granted their dismissal requests.
On appeal, East Dundee alleged the trial court was wrong in finding that East Dundee couldn't file suit because no actual TIF application had been filed and approved between Carpentersville and Wal-Mart.
An appeals panel made up of Justices Kathryn E. Zenoff, Robert D. McLaren and Robert B. Spence rejected that argument and affirmed the lower court.
East Dundee's complaint, Zenoff wrote for the panel, "contains no specific allegations indicating that Carpentersville has granted Wal-Mart's application or has used tax increment financing to fund redevelopment project costs that provide direct financial support to Wal-Mart."
She goes on to explain that Wal-Mart’s intent to seek TIF money does not violate the Tax Increment Allocation Redevelopment Act because no actual agreement was in force at the time of the lawsuit.
"The mere filing of an application does for tax increment financing funds is not indicative of a municipality's compliance or noncompliance" with the act, Zenoff wrote.