City of Elmhurst Buys Pauli Property: 'No Steal, No Killing—A Fair Deal,' Alderman Says

Elmhurst will pay $1.77 million for a parcel of land at the corner of York Road and Hahn Street—the current home of Pauli's Marathon and Auto Repair.

After an executive session, during which City Council members approved the 30th change to the original sales agreement, aldermen voted 10-3 to purchase the station.

City Manager Jim Grabowski outlined the deal for audience members at City Hall Monday night. The city will take ownership on July 10, he said. At that time, owner Chuck Pauli will no longer stock or pump gasoline, but he will be able to run the service station through March 2014. No base rent will be charged to Pauli, but he will pay taxes and utilities.

The parcel is part of Tax Increment Financing District 4, which stretches up York Road from just south of North Avenue to Grand Avenue and includes undeveloped parcels at Hahn and Addison streets, as well as the new Mariano's Fresh Market. The site, once part of downtown TIF 1, was established and slated for development in 1986, but economic decline stalled development there.

TIF districts freeze assessed property values for local taxing bodies for up to 23 years to encourage redevelopment in areas considered blighted. TIFs generate new revenue through new construction in the TIF district, or if the township assessor increases the assessed value of the properties in the TIF district. The difference between the frozen property value and any new assessment or growth goes into a TIF fund. The city then uses this money to pay for any public improvements or to help finance redevelopment projects in the district.

First Ward Aldermen Marti Deuter and Diane Gutenkauf, and 3rd Ward Alderman Michael Bram voted against the purchase.

Bram noted that the purchase price was 20 percent more than the appraised value of the property and said he believed the city was paying too much. Gutenkauf objected to the city's purchase of another piece of property, saying that she believed the city should not be in the real estate business.

And Deuter wondered about the city's liability for the needed environmental remediation on the site, the cost of which will be part of the total redevelopment cost.

However, 5th Ward Alderman Scott Levin said the city is doing the right thing.

“This was no steal, no killing. It was a fair deal,” he said, noting that Pauli was a reluctant seller.

Levin added that pursuing the parcel through eminent domain would have ended up costing the city even more. In April, the City Council approved the use of eminent domain to acquire the property if necessary.

Developers will soon be asked to submit their ideas for the parcels, Grabowski said.