Village of Oak Park, Whiteco reach agreement on sale terms for building

Debate concludes about redevelopment restrictions, finances

Share on Facebook
Share on Twitter
Print

By Anna Lothson

Staff Reporter

Picking up a tabled issue from its last meeting, the Oak Park village board approved the details of the sale of the Whiteco building — this time more on the village's terms.

The process was halted at the board's Sept. 18 meeting when trustees questioned a negotiation point regarding a portion of the redevelopment agreement. Representatives of Whiteco, on behalf of the buyer, requested an easement of the specific retail restrictions that stated a prominent tenant must remain a grocery store until 2018.

Whiteco asked that the restriction be lifted in 2016, two years before Trader Joe's lease runs up. This would allow the property to only be subject to the business district's retail overlay restriction — instead of the redevelopment agreement whose wording stipulated only a similar type of store. The request to lift the restriction in 2016 was made from the buyers on the off chance Trader Joe's might ever choose to vacate Oak Park.

Trustees at the last meeting told Tim Connelly, president of Whiteco, that the village expected something in exchange for giving up that detail of the redevelopment agreement. Connelly returned Monday night offering $100,000 to cover the two-year gap should Trader Joe's leave, but trustees were still not willing to lift the restriction.

Although there's no indication that Trader Joe's has plans to ever leave Oak Park, the new buyer wanted to limit their risk. Trustees, however, refused to budge on what it was promised when Whiteco moved into town.

Trustees were pleased to see Whiteco come back with a financial incentive to make the change, but trustees Tucker and Johnson questioned whether the amount would cover a hypothetical two-year absence of revenue. Tucker wondered where the $100,000 figure came from.

"It was clear to us that the village board wanted us to go back and reconsider," Connelly said. "Obviously it was something very difficult. But we didn't want to enter into a back-and-forth amount. We thought $100,000 was a very meaningful, material number."

Connelly said the additional money brings the amount Whiteco has contributed to the original deal to more than $500,000, which he pointed out was higher than the amount required by the village in the agreement. He also noted that Whiteco came through on its end of the deal to deliver Trader Joe's to the village, a business that has brought a significant tax revenue boost to the village.

Interim Village Manager Cara Pavlicek said the additional financial contribution would be used for the public good and not put into the general fund. She said the amount was not meant to be a "dollar for dollar amount," but would help offset lost revenue if there is a gap in tenants should Trader Joe's choose to leave.

Despite the extra amount, Tucker and Johnson emphasized they didn't understand why the zoning restrictions should change since Trader Joe's has a lease through 2018.

"If everyone is saying we expect Trader Joe's to stay, then why the pushback from 2018 to 2016?" said Johnson, who also hit on the point that Oak Park still doesn't have a definitive answer on what the financial gain for the village has been since Whiteco came to the village. The village must realize its return, he said, so it can be determined if there is any risk of losing money on the deal.

"We have to answer to the public," Johnson said. "When does the village get its return on the investment back?"

In reference to Johnson's questions, Connelly stuck by his stance that the change was a request from the buyer, who he said was a good fit for the village.

"We're happy with where we stand now," he said. "We're happy we have a great buyer who will be with the community for a long time. It's a great opportunity for both sides."

After much discussion, the board and Connelly remained at a standstill on the 2016/2018 issue, and Connelly suggested a recess to discuss with his staff and attempt to contact the buyer. He didn't reach the buyer, but eventually Connelly conceded his position and agreed to move forward with the sale on the village's terms.

Before the issue concluded, Pope spoke highly about Whiteco's contribution to the village and said it's been a positive relationship for Oak Park.

"We look forward to having a similar relationship with the new purchaser," he said.

Contact:
Email: anna@oakpark.com Twitter: @AnnaLothson

Reader Comments

6 Comments - Add Your Comment

Comment Policy

Curios  

Posted: October 7th, 2012 9:25 PM

Know it all, Cara Pavlicek should be Development Manager, Village President and Village Manager all in one. Then she can micro manage herself and not have to answer to anyone.

Enuf is Enuf from Oak Park  

Posted: October 3rd, 2012 2:07 PM

So Whiteco presented originally projected sales taxes as part of their development proposal, and sales tax was approved by the village board as part of the compensating benefits in exchange for Whiteco variances, but Trustee Johnson is now saying that actual sales tax revenue is a confidential? Trustee Johnson presents himself as an advocate for transparency, while actually being an obstructionist.

Observer  

Posted: October 3rd, 2012 1:20 PM

Another broken campaign promise; transparency. There is no reason to believe Johnson has updated pro-forma figures because he asked "when does the Village get its return on the investment back?" If Johnson had the "confidential document" he would know the answer to his question. Also, there is no law that prevents OP from releasing sales and liquor tax revenue. The Board needs to stop hiding behind closed doors and secret documents and honor their campaign promise of transparency.

Ray Johnson from Oak Park  

Posted: October 3rd, 2012 9:51 AM

@ Observing: We do have financial pro-formas updated and the VOP investement is projected to be paid off by 2018. Staff presented us with a confidential document, due to the fact we are not allowed to release actual sales or liquor tax revenues from Trader Joe's specifically. Staff will present total revenues and expenses from the project at a subsequent meeting.

Also Observing from Oak Park  

Posted: October 3rd, 2012 8:53 AM

I watched this meeting, and Cara Pavlicek spoke specfically about the return on investment and when the project breaks even.

Observer  

Posted: October 3rd, 2012 8:29 AM

Johnson and Tucker stated that the Village does not know the ROI on their investment in Whiteco, but they campaigned on looking into better fiscal management of our tax dollars. Oh well, it is not the first campaign promise broken. After all, who really cares that the Oak Park taxpayer gave Whiteco over $3.5 million in cash payments and that does not include the land subsidy. We just increased Connelly's profit on this deal. Sadly the Village Board and Whiteco do not it that way.

Quick Links

Sign-up to get the latest news updates for Oak Park and River Forest.


            
SubscribeClassifieds
Photo storeContact us
Submit Letter To The Editor

Latest Comments