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Quickly changing retail industry will force changes in Rockford-area thinking

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Quickly changing retail industry will force changes in Rockford-area thinking

A story in Time Magazine this month highlighted a trend that should be concerning city and county leaders across the country, “The Death and Life of the Shopping Mall.”

According to industry estimates quoted by Time, by 2022 one out of every four shopping malls in the United States will be out of business. We’ve already seen this trend hit the Rock River Valley. Winnebago County used to be home to malls by the name of Colonial Village, Machesney Park Mall and North Towne Mall to go with CherryVale Mall.

Colonial Village now is home to Heartland Community Church, Machesney Park Mall’s interior space long since closed and it has a couple of department stores left facing Illinois 251 and Practice Velocity on the other side. North Towne long ago was taken over by a series of discount stores.

The trend though is larger than shopping malls as more and more turn to online shopping where everything you need is a click away. More than 4,000 retail stores are being closed by major retailers in 2017 alone. These include such iconic names as Gymboree, Sears and Kmart, J.C. Penney, Macy’s and Payless ShoeSource.

This shift to online shopping is quickly going to hurt the budgets of municipalities who rely on sales tax revenue to help pay for police salaries and new roads. It appears to already be hitting the Rockford area. According to Illinois Department of Revenue figures, in fiscal year 2017 – July to June – the amount of sales tax revenue collected by retailers in Winnebago County and returned to the municipalities where the items were purchased declined from the year before.

In FY2017, Winnebago County’s 11 incorporated cities and villages and Winnebago County received $40.12 million back from the state in sales tax revenue compared with $40.22 million in FY 2016. It was just a slight decline but it marked the first year-over-year decline since 2010, the depths of the Great Recession when the area unemployment rate tumbled to 19 percent.

Winnebago County has had a remarkable turnover in leadership in 2017. Rockford, Winnebago County, Loves Park and Machesney Park have new leaders in place. Rockford, Loves Park and Machesney Park, as well as Cherry Valley, Roscoe and Rockton, have been able to count on continually rising sales tax revenues to fund city services. That may no longer be the case and instead leaders will have to contend with what to do with large retail spaces that no longer have new chains eager to move in.

We’ve seen some of this already. The former space that was home to K’s Merchandise for years on Mulford Road now is a ServiCom call center. But the old Menards building on Illinois 173 and Illinois 251 – the first major store to open on that shopping corridor – remains unfilled along with several large vacancies on East State Street. Rockford already is home to many buildings that were part of a boom gone bust. Any trip around older sections of Rockford will showcase the manufacturing buildings of the 1940s, 1950s and 1960s, that now either have been turned into storage or sit idle. Is the Big Box space next?

Sales Tax Revenue Trends
Fiscal Year

Rockford

Pct. Ch. County total

Pct. ch.

FY 2009

$22.69 million

$37.81 million

FY 2010

$20.79 million

-8.3% $35.07 million

-7.2%

FY 2011

$21.39 million

2.9% $36.26 million

3.4%

FY 2012

$22.15 million

3.5% $37.85 million

4.4%

FY 2013

$22.18 million

0.2% $38.07 million

0.5%

FY 2014

$22.40 million

1.0% $38.64 million

1.5%

FY 2015

$23.05 million

2.9% $40.11 million

3.8%

FY 2016

$23.38 million

1.4% $40.22 million

0.3%

FY 2017

$23.30 million

-0.3% $40.12 million

-0.2%

Source: Illinois Department of Revenue

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