A developer representing told Elmhurst aldermen Monday the store has trimmed a quarter-million dollars off the amount it initially planned to request from a new tax increment financing district.
Dean Kelley of Abbot Land and Investment told the Finance, Council Affairs and Administrative Services Committee his group is now requesting a $1.25 million reimbursement from the North York Road TIF district, one of three TIFs being proposed by the city. Elmhurst Mayor Pete DiCianni that the new store will be located on the old Ford dealership property at North York and Industrial Drive.
TIF districts are used to encourage development in underperforming areas by providing special funds to make investments and upgrades. Assessed value of properties in TIF districts are frozen for local taxing bodies for up to 23 years. TIFs generate new revenue when new construction occurs in the TIF. The difference between the frozen property value and any new assessment or growth goes into the TIF fund. The city then uses this money to pay for improvements or help finance redevelopment in the TIF.
But Kelley said Mariano's wants the $1.25 million upon occupancy of the 70,000- to 80,000-square-foot store rather than later over the life of the TIF. Charles Biondo from Kane McKenna, a group hired by the city to advise them on TIF issues, told the committee that according to his analysis, Mariano's request is reasonable. While cautioning that he cannot divulge detailed sales figures, he confirmed that at least one municipality with a new Mariano's is reporting almost double the projected sales per month. Dozens of new Mariano's supermarkets are beginning to dot the city and suburbs; other stores are open in Chicago, Palatine, Vernon Hills and Arlington Heights.
Kelley said the $30 million per year in sales his group projects for the Elmhurst store is “conservative.” Assistant City Manager Mike Kopp noted that Mariano's tracks sales by customer ZIP code and that people are traveling 12 to 15 miles to shop at some of the new stores.
Biondo told the committee that by law, TIF funds can be used to reimburse developers for land acquisition, environmental remediation and demolition, interest rates on loans, and utility infrastructure, such as the construction of a deceleration lane on the road leading to a development.
City Manager Jim Grabowski added that the Development, Planning and Zoning Committee is reviewing a timeline for public hearings on the proposed North York Road TIF district, and that the city's plan is to pursue the creation of the TIF and the development of Mariano's at the same time.
“It has been established that it qualifies as a TIF area,” Grabowski said.
Since the TIF will not be in place until August at the earliest, and Mariano's expects to open next year, the committee wondered where the money to reimburse the company will come from.
Biondo reminded the committee that the city approved an last year, which would allow the city to reimburse developers for TIF-related expenses before a new district is in place.
City Finance Director Marilyn Gaston told aldermen the city has a $3 million line of credit in place specifically to pay for TIF projects.