Mariano's Developer Will Not Ask for Sales Tax Rebates

But TIF funds will be sought for store's opening.

Most of the numbers have yet to be put on paper, but Mariano's Fresh Market will likely seek $1.5 million from a to help offset opening costs, the city's Finance, Council Affairs and Administrative Services Committee learned Monday.

City and Mariano's representatives unveiled on Friday. Located at the old Ford dealership at North York and Industrial Drive, the Elmhurst store is one of 20 locations planned for Mariano's, part of the Roundy's chain of supermarkets. Other stores are open in Chicago, Palatine, Vernon Hills and Arlington Heights.

Dean Kelley of Abbott Land and Investment, the group that will build and lease the store, told the committee that his company expects to invest $18 million to $20 million in the project, including land costs.

Currently, the group is working with the state to solve environmental issues on the site. The store is expected to generate $10 per square foot in sales each week, or about $35 million to $50 million a year.

Although Abbott is still putting together its request for TIF help, the funds would be used for demolition and land costs. Mariano's, Kelley said, has had financing help in some form from the five towns in which it now operates stores. He added that his company will not ask for any sales tax rebates from the city.

Seventh Ward Alderman Mark Mulliner told Kelley that he had never seen a development start out as a public announcement and then proceed to city staff and council. This “backwards” approach “concerns me,” Mulliner said.

Kelley acknowledged that there might be questions as to why Mariano's needs an incentive when they have already expressed a desire to come to Elmhurst.

City Manager Jim Grabowski told the committee that studies for a TIF district on North York Road “lagged behind” the plan for Mariano's. TIF districts, which are used to redevelop underperforming areas, use special funds to make investments and upgrades.

Mariano's hopes to break ground this summer and open early next year.

Jim Court March 13, 2012 at 02:51 PM
Actual revenue would only be produced by those shopping from other communities and those who will now not travel to Whole Foods or Trader Joe's from our community. I am glad it will eliminate the blight that now exists and should be a driving force for the future development of North York Road. That should ultimately increase housing values in this area, which will increase property taxes.
Karen Chadra March 13, 2012 at 03:32 PM
Correction noted. The store will generate $35 million to $50 million in sales a year, not sales tax.
Darlene Heslop March 14, 2012 at 04:12 AM
thank you mr. dom for claifying the fact that there are a limited list of items that the city would actually see sales tax revenue on...you can buy all the organic zucchini, free range chicken eggs, peanut butter stuffed pretzels, and fresh baked bread you want...but not one item will generate any tax revenue for elmhurst...nor does it generate any tax revenue for any other town that has a trader joe's or whole foods...what will generate revenue will be liquor, any kind of "durable goods", certain types of prepared foods, and a few other categories...i'm not surprised that they didn't ask for a tax rebate, as that hasn't been their M.O. in other places...they've primarily asked for realestate tax incentives and realestate itself...it will be interesting, too, now that the parent company, roundy's, has gone public, to see how they choose to negotiate (or not)...time will tell if this was truly part of a corporate business plan to expand into elmhurst based upon certain criteria (much the same way that trader joe's and whole food said "thanks, but no thanks, you don't fit our corporate strategy...".) or something else. i haven't had enough time to fully look into the business plan aspect of their ipo to evaluate this, but i'm looking forward to finding out more about their corporate philosophy and their expansion plans.
Bob Santini March 14, 2012 at 01:27 PM
you're not going to find anything specific about Mariano's "business plan" in the IPO documents (the Mariano's store concept is a small fraction of Roundy's in terms of revenue); the IPO was more about cashing out the private hedge fund/investors that owned them (Willis Stein and partners got 36% of the proceeds from the IPO to cash out their ownership). the other main objective of the IPO was to consolidate their long term debt, which now stands at approximately 900 million; versus a market cap of about 450 million. i agree that this has the potential to be a great destination tenant that will bring a much needed enhancement to the north york corridor; however, i just hope that the finance committee does not give away the store, so to speak,
Darlene Heslop March 15, 2012 at 04:04 AM
sometimes one can gather info based upon media reports, etc. so for me, it will be a fun process, like a game, and when their first annual report comes out, that sometimes will also give away tidbits. i agree with you on both points...i hope that the store, and the farm, aren't given away.


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