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Danville, Ill., officials float plan to return sales taxes to Steve & Barry's
[August 05, 2008]

Danville, Ill., officials float plan to return sales taxes to Steve & Barry's

(News-Gazette, The (Champaign-Urbana, IL) (KRT) Via Acquire Media NewsEdge) Aug. 5--DANVILLE -- Officials want to give back part of the sales-tax money the city has collected from Steve & Barry's while its corporate officials continue evaluating individual stores after declaring bankruptcy in July.

"We think this will help as corporate looks at making decisions," said Danville Mayor Scott Eisenhauer. "Anywhere we can help offset costs makes this store more likely to remain open versus somewhere else where they have large expenses that have no offset."

The Port Washington, N.Y.-based sportswear chain filed for Chapter 11 bankruptcy in early July but has kept its Danville store at the Village Mall, 2917 N. Vermilion St., and its other 275 locations open as the bankruptcy process continues.

In the summer of 2006, Steve & Barry's opened its Danville location in the former J.C. Penney space at the mall and opened a store at 913 W. Marketview Drive in Champaign.

The company announced in July that it would consider reductions in its operations, including its store base.

Rachel Brenner, spokeswoman for Steve & Barry's, said no decisions have been made about specific stores, and the company continues to analyze carefully all of its operations, including its store base.

The Danville city council will consider at its regular meeting Tuesday night whether to give back some of the sales tax collected from the store as well as returning a percentage collected this year and next.

In 2006, the Danville City Council approved a retail incentive program. As part of that initiative, the city can offer sales tax rebates to attract or retain retailers and developers.

At that time, the city wanted to get more aggressive about courting retail businesses and the incentive program would give retailers another reason to choose Danville, Eisenhauer said.

"There are not a lot of communities doing this and for us, it's a way to set us apart from other communities," he said.

For the first time since the incentive program was created in 2006, the council will consider Tuesday night an agreement, offering a sales tax rebate to a retailer. Eisenhauer said each retail incentive agreement must be approved by the council.

This agreement calls for the city to rebate a percentage of Steve & Barry's sales-tax revenue the city's portion only retroactive to the year the store opened.

So, 80 percent of the store's sales tax revenue from its first year of operation in 2006 would be returned, then 60 percent from the second year, 40 percent the third year, which is this year, 20 percent the fourth year, which is next year, and none the year after that.

The total amount of sales tax dollars that would be returned to the retailer retroactively would be $39,000, according to Eisenhauer.

He added that the city is talking to other retailers about the same incentives.

Steve & Barry's is not the only retailer taking advantage of this, he said, it's just the first one with an agreement to be approved.

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