Although Walmart will close its store next month, Homewood Mayor Rich Hofeld said village officials are already at work trying to find a new tenant, and he believes a casino underway nearby will help the effort.
“It’s early in the game but we’re not sitting still,” Hofeld said. “We’ll move on.”
He and other Homewood officials learned Wednesday, in an email from Walmart, that the store, 17550 S. Halsted St., will close March 10.
The decision to close is because the store is not meeting the company’s financial expectations, Ahmed Young, Walmart’s director of public and government affairs, wrote in an email the village shared. Employees will have the opportunity to transfer to jobs at other Walmart locations, Young said.
Walmart also has stores in Country Club Hills, Lansing, Olympia Fields and Richton Park.
“While our underlying business is strong, this specific store hasn’t performed as well as we hoped,” Young said in the email. “This decision was not made lightly and was reached only after a thorough review process.”
The village gets confidential revenue numbers on retailers’ performance from the Illinois Department of Revenue, from which it can estimate tax revenue from a particular store.
The village said in a statement the store “has been one of Homewood’s largest revenue producing stores for years” and serves customers not only from Homewood but from East Hazel Crest, Glenwood and Thornton.
Hofeld disputes Walmart’s assertion the store was a laggard as far as sales and revenues, and that “as far as we know they were doing well.”
“Based on that (state figures) it seemed like a good performer,” he said.
Hofeld said he was on the phone with developers “within an hour” after getting word of the store’s closing, and spoke with five of them Wednesday.
Wind Creek Hospitality is building a casino and hotel just a few blocks north of the Walmart, and Hofeld said the number of people it will draw will be a plus in attracting a new user for the vacant store.
“One developer’s mouth was watering because there is a gas station,” Hofeld said.
The station is operated by Walmart, but perhaps could be taken over by another operator, he said.
“It would be the closest gas station to the casino,” Hofeld said.
The Walmart was previously a Kmart Supercenter, but that closed in December 2013.
Walmart submitted plans soon after Kmart vacated to remodel and open a Supercenter, which opened in fall 2016.
Opening the Homewood store, however, meant closing a smaller Walmart in neighboring Glenwood, at the northeast corner of Halsted Street and Holbrook Road, which had opened in September 2005.
Homewood officials agreed to give Glenwood 10% of annual sales tax revenue the new Walmart generated, according to Hofeld.
“It was the idea of being a good neighbor after Walmart left Glenwood to come here,” he said.
The sales tax sharing lasted three years, and Hofeld declined to say how much was turned over.
“It was a substantial amount of money,” he said.
The space Walmart will exit is just under 190,000 square feet and in good condition, Hofeld said.
“The building is well maintained, the property is well maintained,” he said.
With an enormous parking lot fronting Halsted, the store sits well back off the street, which could present a problem in filling the space, he said.
“It’s a deep store, which is a disadvantage when you want frontage,” he said. “(Retailers) all want visibility.”
On Homewood’s Facebook page, some commenters suggested tax incentives had expired, prompting Walmart to leave town.
Hofeld said a tax increment financing district that includes the property had long since lapsed, but that Walmart received a Class 8 designation for the property, which reduces the assessment level and taxes owed.
Hofeld said that benefit was still in effect and not due to lapse anytime soon. The Class 8 can be renewed, but Hofeld said the village had not had any discussions with Walmart along those lines.
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“It would have been beneficial if they had reached out and spoken to us ahead of time,” Hofeld said.
Property tax records show tax bills going to Walmart’s corporate offices, although a Walmart spokeswoman said the retailer leases the space but could not provide information about the property’s owner.
Hofeld said the retailer leases the space from Kmart’s parent, Sears.
Tax records show $504,000 in property taxes were paid last year for the 2021 tax year.
When the Supercenter opened, it replaced a smaller Kmart in Homewood near the intersection of 183rd Street and Kedzie Avenue.
A Chicago Tribune story from January 1994 about the new Kmart format, combining groceries and general merchandise, and the new Homewood outlet noted the Supercenter was opening next to a Builders Square outlet, a home improvement chain Kmart owned at the time. Across the street were Goldblatt’s and the electronics store chain Silo.
mnolan@tribpub.com
