Property tax relief helped ‘seal the deal’ to bring $1.2B Walmart distribution center to Belvidere

By Kevin Haas
Rock River Current
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BELVIDERE — City Council members voted earlier this year to approve a massive perishable food distribution center promising to bring up to 700 jobs to the city, but the name of the company behind the project wasn’t revealed.

Now, Walmart has made it known that it’s the company behind “Project Yukon,” the nickname given to the development on a 200-acre site at Crosslink Parkway and Morriem Drive, which is on farmland across U.S. Highway 20 from the Belvidere Assembly Plant.

To incentivize the multinational retailer to build here, the city and other taxing bodies in Boone County are modifying its Enterprise Zone incentives to provide more property tax relief, which officials feel is necessary to compete to attract jobs here.

“We are competing with a lot of areas, other states, that have other incentives, maybe TIF districts, and we felt that we needed to make some modifications,” said Pamela Lopez-Fettes, executive director of Growth Dimensions, which manages the Enterprise Zone. “This is helping this project and allowing us to seal the deal.”

The tax relief helped spur a $1.2 billion investment, which includes $755 million in land and construction costs, $26 million in systems in systems and security and $450 million in machinery and equipment, according to Belvidere Mayor Clint Morris.

“It is very competitive. We weren’t the only potential choice they had,” Morris said. “But we have a lot of things going for us in Belvidere. A) We have reliable power. B) We have affordable water, and C) we’re a great community.”

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About the incentives

The city’s existing Enterprise Zone property tax abatements offer 80% reductions the first year, followed by 60% the second year, 40% the third year and 20% the fourth year. The abatement is for the portion of taxes on improvements to the property.

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The modification increases that relief for high-level projects, which are those creating at least 400 jobs and investing $800 million.

Morris said the initial expectation is for 410 hourly jobs paying $55,000 annually and 40 salaried jobs paying $110,000 a year.

“So they’re good-paying jobs,” he said. “Not to mention the construction jobs that are going to be required to build this, which will be hundreds.”

The high-level projects can receive an 85% property tax break for the first five years and 50% for the following five years. That helps the company handle higher upfront construction costs that have come with inflation, while still helping taxpayers and the region as a whole in the long term, Lopez-Fettes said.

“It pays off long term for the entire region because it will bring more jobs, it brings more people, it brings more traffic to the community,” Lopez-Fettes said. “You’re getting other smaller businesses coming in to support the people working at the business. It’s kind of a circling affect that this will potentially bring other jobs as well.”

Growth Dimensions plans to submit an application to the state to modify the Enterprise Zone once all taxing bodies sign off on the changes. Belvidere City Council approved them Tuesday.

Morris said his administration has been focused on promoting economic development and job growth throughout his tenure as mayor.

“I don’t think there’s any secret that Illinois hasn’t been successful in keeping business or competing for business, and we have,” he said.

The state’s Enterprise Zone program also offers developers sales tax exemptions for the cost of building materials, state utility tax exemptions and other tax breaks.

It’s unclear how much the property tax abatement could be worth for Walmart. That will depend on the value assessors put on the 1.2-million-square-foot facility on 200 acres. For a rough comparison, consider that the 250-acre Belvidere Assembly Plant property has a roughly $1.9 million annual property tax bill, according to Boone County tax records.

About the facility

The new facility is expected to open in 2027, Walmart said in a news release. Employees will utilize state-of-the-art technology to handle fresh produce, eggs, dairy, flowers and frozen goods for delivery to nearby Walmart stores. 

It would bring 450 to 700 jobs to the region, not including construction jobs, Lopez-Fettes said.

“The city of Belvidere is excited that Walmart has decided to invest in our community and build their 1.2 million square-foot distribution storage facility here,”  Morris said. “Walmart’s investment supports our commitment to attract business development and job opportunity and represents a huge success for Belvidere in achieving both.”

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Walmart says the high-tech perishable food distribution center will move double the production of a traditional distribution center. Rather than manually stacking boxes and building pallets, the new center will allow employees to use technology to do the heavy lifting. The tech improvements also reduce transportation costs, resulting in savings that can be passed on to customers, the company said.

“Belvidere PDC associates will work with cutting-edge technology to stack boxes in a way that not only makes the job less physically demanding, but also avoids damaging products by placing fragile items like eggs at the top. It also maximizes space on trucks so that we can make fewer trips,” Prathibha Rajashekhar, senior vice president of Innovation & Automation at Walmart U.S., said in a news release. “The end result is getting high quality grocery items like dairy and fresh produce onto our store shelves and in the hands of our customers faster than ever before.”

Walmart operates seven distribution centers, 184 retail stores and employs 57,800 people in Illinois. Last year, it gave $32.6 million in cash and in-kind donations to local Illinois organizations.

This article is by Kevin Haas. Email him at khaas@rockrivercurrent.com or follow him on Twitter at @KevinMHaas or Instagram @thekevinhaas.