The pact calls for shopping center owner Bill Shiner and Ulta to receive a portion of sales tax revenue generated by the new store, at 3050 W. Route 60. The money will partially reimburse Ulta for its roughly $1.3 million renovating the 11,000-square-foot storefront, which last had been occupied by Party City.
Without that deal, Shiner said following Friday morning's ribbon-cutting ceremony, Ulta never would have come to the center.
"It would have been impossible," Shiner said.
Mundelein officials believe having Ulta in town is worth the financial investment.
"We are taking a bit of a gamble on this one, but I am very bullish that the investment will bring good returns and be a boost for other businesses in the center," Trustee Ray Semple said.
Jewel-Osco and the company that owns the Hawley Lake Plaza are among the other businesses that have struck tax-sharing deals with Mundelein's village board in recent years. As with the Ulta agreement, they've helped bring new businesses to town and subsidized site improvements.
But they've also meant millions of dollars in payouts from the village.
Mundelein officials don't consider the payments lost revenue. Without the tax-sharing deals, they say, the businesses may not have opened and the village wouldn't receive any sales tax from the sites.
"It's only lost revenue if the deal would have happened anyway (without incentives)," Mayor Steve Lentz said.
The deals also have helped attract a mix of businesses to town, Village Administrator John Lobaito said, and that makes Mundelein a more attractive place to live.
"These decisions are not always about the revenue," Lobaito said.
Under the Ulta deal, Mundelein will give Shiner $700,000 in sales tax revenue generated by the new store and a TJ Maxx that's next door. Some of that money will then go to Ulta.
The money will be paid out over five years, at about $140,000 each year, starting in fall 2018. That's when an earlier sales-tax deal involving the TJ Maxx store is set to expire.
Mundelein has received more than $19 million in sales tax revenue from the stores in Mundelein Crossings since the center opened in 2005, officials said. Of that sum, the village has given Shiner nearly $7 million through tax-sharing agreements.
Although the center has several high-profile retailers, including TJ Maxx, Pier 1 Imports and Home Depot, it also has some vacancies -- most notably a large stand-along building that used to be a Best Buy.
"Our tenant mix is as good as any that there is in the marketplace," Shiner said. "(But) it's a really difficult environment."
Shiner is confident Ulta will attract other successful stores to Mundelein Crossings.
"When they go into a shopping center, other retailers tend to follow," he said. "We're hoping that this tenant will generate momentum."
Of course, financial agreements don't guarantee success or even long-term tenancy.
The Medline Industries medical-supply company inked a 20-year tax-sharing agreement with Mundelein officials in April 2014, but the deal dissolved when the company relocated its sales center to a new corporate headquarters in Northfield this past January.
Still, the pact generated $400,000 annually for Mundelein until it ended, Lobaito said.