Village of Oak Park approves $1.5 million for Pete's

Trustees say incentive to open store will boost tax revenue

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By Timothy Inklebarger

Staff Reporter

The Oak Park Village Board of Trustees approved a measure to send $1.5 million to Pete's Fresh Market, which plans to open at the former Dominick's grocery store, which closed last year, on Lake Street. 

Village Manager Cara Pavlicek said that since the grocery store, 259 Lake St., is not located within a tax increment financing district (TIF), the incentive payment would likely be funded through the village's general fund.

She recommended that the village spread the funding of the incentive payment over a few years. 

"This isn't like a capital investment that you'd do for 20 years, but you might want to spread it over several fiscal years because the repayment is pretty quick, based on projected sales tax revenues," she told trustees.

The incentive payment to the grocery store chain would be paid in a couple of years, based on projected sales and property tax revenues, according to a proposal presented by the Oak Park Economic Development Corporation.

Pavlicek also noted that the agreement with the grocery store could include a so-called "clawback" provision, requiring Pete's to repay the money if the store is unsuccessful.

The incentive payment is intended to help Pete's with façade renovations, installation of a café in the southeast corner of the building and improvements to the parking lot and landscaping. Part of the agreement includes Pete's stated intention to open the store in the fourth quarter of this year.

John Hedges, interim executive director of the Oak Park Economic Development Corporation, said the store is expected to generate $280,000 in annual sales tax revenue and about $500,000 in property tax revenue.

"Pete's could be there forever but certainly for at least 15 years as an anchor to the community," Hedges said, noting that the store would recapture local grocery dollars that might go to other villages and bring shoppers from other communities.

"We think Pete's is going to be a really strong addition to our community," he said.

Pete's executive officer, Stephanie Dremonas, said the grocery chain wanted to be in Oak Park.

"We worked in good faith to block out other competitors, such as Jewel, who wanted this property as well," she said. "The village was pretty adamant in saying, 'We want you because you guys have a good operation,'" she said.

Trustee Bob Tucker said the incentive payment is "an investment; it's not some payoff."

"I would prefer not to give you a single cent, but I also don't want to unilaterally disarm against the competing communities in our area," he said. "This location is crucial to business and residential areas surrounding that store."

Trustee Adam Salzman said the village has avoided such incentives in the past and lost business to other communities, but he did not give any examples. An unwillingness to provide the incentive would be "showing ourselves to be poor stewards of the community," he said.

Village President Anan Abu-Taleb argued that the store not only would generate sales and property taxes for the village, but it also would increase property value for nearby residences by around 5-7 percent.

"Grocery stores in general act as an economic driver," he said. "They bring other businesses to the community and they act as an anchor."

Contact:
Email: tim@oakpark.com

Reader Comments

57 Comments - Add Your Comment

Comment Policy

Proud Union Resident  

Posted: June 7th, 2014 7:22 PM

It wouldn't surprise me. Village Hall has its own anti-union atmosphere. So why would the board be concerned about how businesses treat their workers?

hmmm  

Posted: June 6th, 2014 3:50 PM

Is Pete's still illegally preventing the formation of unions amongst their employees? Is that why the VOP Board feels an affinity towards them? http://gapersblock.com/mechanics/2010/03/22/petes-market-and-workers-rights/

in Glen Ellyn formerly from OP  

Posted: June 4th, 2014 11:46 PM

Honestly, I don't know who is more naive- me, for all that the next guy presumes I don't know or do, or the next guy for strongly implying we should blindly trust the gov't with our money, as if that's never been a mistake. Our local gov't officials work directly for "us"- we hire (vote for) them and we pay them (local taxes). If they lie to or cheat us, they aren't working for us. Leave it to the fed. gov't officials to lie to us to protect us from ourselves; they have secrets we don't want.

@OP  

Posted: June 4th, 2014 7:20 PM

And regarding all the yadda yadda about a grocery store attracting other biz, well then you structure the contract so that, as an example, for each biz attracted you give the anchor biz a prop tax rebate. You don't just wave your hands and throw away tax payer $ up front.

@OP  

Posted: June 4th, 2014 7:17 PM

@OP, if Pete's is putting in $10M for development, they should be able to kick in the additional $1.5M. If they really in such dire financial straights, then perhaps they're not the best fit for that location. And if they really need a partner to put up the $, then that partner should get a share of the EBITDA. VOP needs to stop acting like a charity towards for-profit corps.

Yep  

Posted: June 4th, 2014 7:11 PM

When Anan promised us change last election, we must have misheard him. He was really promising to hand over our change to his business buddies.

OP  

Posted: June 4th, 2014 6:39 PM

@ glen you need to parse two seperate issues. OP systemic problems and one deal. OP has structural issues that threaten the next generation - taxes, schools, pension etc. But this deal is more tactical - it is needed.. and frankly, OP waste more thatn this all the time on projects that will never show a rturn.

OP  

Posted: June 4th, 2014 6:36 PM

@ Glen - calling them out without any knowledge of deal interworkings is unfair. Deals like this require finese and tactics that cannot be shared with public as they are delicate and as shown on this board, everyone tires to derail. If you have every done a deal you would understand this - not trying to condesend - just sayin

in Glen Ellyn formerly from OP  

Posted: June 4th, 2014 6:34 PM

ah, here's the likely reason not to consider Jewel for that site. Super-Value DID sell off Jewel in a high debt situation http://articles.chicagotribune.com/2013-01-11/business/ct-biz-0111-jewel-sale-20130111_1_supervalu-chicago-s-klaff-realty-lp-jewel Hmm, if Oak Park gets so high in debt, what short term investor will buy Oak Park? Anyway, I hope it works for all the right reasons and your elected officials have as much invested in Oak Park as the neighborhood families there do.

in Glen Ellyn formerly from OP  

Posted: June 4th, 2014 6:25 PM

If Duped Duper's post is true, about how deeply indebted Oak Park is, this whole argument is moot, in my opinion, and Oak Park has far deeper problems than gov't. lying about $1.5M. Oak Park tax payers are right to be ticked off and voicing here and questioning every deal concerning their hard earned money and personal investment and choice to raise their families in a perceived stable historic suburb. We posting here aren't the enemies to each other, deceit is.

in Glen Ellyn formerly from OP  

Posted: June 4th, 2014 6:12 PM

furthermore, Jewel was previously serving north Oak Park on North Av until early 80s(?), and they continue to serve River Forest and central Oak Park after many many years (read- lots and lots of tax dollars over the years). Is Pete's upscale or affordable? Would Jewel, a longstanding business partner in OP, have been able to generate sales at an Oak Park location at an Oak Park standard of service, even with a $1.5M grant for upgraded looks? Is Jewel (Super Value) dying?

OP  

Posted: June 4th, 2014 6:09 PM

This complaining goes to the issue I harp on - we act so flipping entitled in OP. they owe us analysis/discussion, petes should do X. Look, we are a middle aged athlete asking for franchise.. the reality is we aint what we used to be. understanding that is the first step to brining back the MOJO my parents say we lost ... (i agree)

OP  

Posted: June 4th, 2014 6:07 PM

PLease understand that all businesses are not equal and will not be treated as such. Lets look at facts - Pete's is putting in$10MM to do development, it has positive IRR (return), it is high profile/quality and needed in community. No you will no be treated the smae - it is fact of life. Fair, no but logical yes. who knows what Jewel needed. its called sunk cost - make decision on best data.

in Glen Ellyn formerly from OP  

Posted: June 4th, 2014 5:59 PM

Yes, I think we all agree Pete's is a welcome business and the nice grocer could well serve the neighborhood on both sides of the elevated tracks. $1.5M is no small detail and obviously that detail was withheld from the public AND it DOES set a precedent for other future potential Oak Park businesses to consider ("Is Oak Park dealing fairly with me"). Also, a little neighborhood history on Lake Street grocery stores near Austin Blvd, at 15(?) Lake St. in OP- 2 have failed at that site (70s)

Brian Slowiak from Westchester  

Posted: June 4th, 2014 4:55 PM

Look for what is not being stated. Jewel had an interest in the property. How much did Jewel want from the Village?More than 1.5 million or less?Or nothing.

Karen Walsh from Oak Park  

Posted: June 4th, 2014 4:42 PM

even though these retail and multi residential units will generate more tax revenue than Pete's. I guess the vision is that a more dense population in DTOP will create a demand for more business to fill currently empty as well as new retail space. Hope so, but really regret increasing urbanization of our "village." Sad.

Karen Walsh from Oak Park  

Posted: June 4th, 2014 4:35 PM

OP and Excited, I share your frustration with the constant complaining about this deal. Obviously many people are not knowledgeable or are even using common sense when looking at the demands of the market in 2014 but prefer to stand on principle of market demands in the days of yore. I am thrilled Pete's is coming to our neighborhood and commend the Board and OPEDC for facilitating this deal. This one will improve quality of life for the residents more than erecting multiple condo bldgs.

Unfortunately  

Posted: June 4th, 2014 10:04 AM

Part II. I'm simply in disbelief in this matter. Did Anan or Hedges conspire with Pete's to "block out other competitors" and then also decide to give an additional $1.5 M to their new "friends?" Who were "the competitors" for Pete's? This is OP and not Chicago, but why am I wondering if this sort of "favoritism" has CHICAGO written all over it? Our elected officials are now picking and choosing favorites and handing out millions of tax dollars to them? Why? Does Gevinson/Obama approve?

Unfortunately  

Posted: June 4th, 2014 9:50 AM

Along with a timeline regarding that $1.5 million, could someone from the village also explain this: Pete's executive officer, Stephanie Dremonas, said the grocery chain wanted to be in Oak Park. "We worked in good faith to block out other competitors, such as Jewel, who wanted this property as well," she said. "The village was pretty adamant in saying, 'We want you because you guys have a good operation,'" she said. This prop was NOT going to be vacant AND a grocery store would be there!!!

Thank You Program  

Posted: June 4th, 2014 9:31 AM

Announcement to all Oak Park Grocers: Since you generate a large amount of sales and property taxes, the Village of Oak Park is now distributing $1.5M of public funds for building improvements for each of your grocery stores. All you have to do is ask, and nothing will be disclosed to the public. Thank you for doing business in Oak Park.

Duped Dooper from Pak Park  

Posted: June 4th, 2014 9:28 AM

The second most indebted suburb in Cook County became another $1.5 million more indebted. Plus you have to add the interest for paying off the bond; round down to $3 million. The powers that be have told us since 1996 when we gave Taxman $6.5 million for the Shops of OP that by making these "investments" our taxes will decline. Just the opposite has happened, they have skyrocketed to among the highest in the state. Most indebted with the highest taxes? Whats not to like?

Excited from Oak Park  

Posted: June 4th, 2014 8:58 AM

Agree with some of the other posters, in comparison of fund distribution this is about a 1/10 on the harshness scale. We get a great grocery store that will bring in revenue to boot. Don't understand all the whining and complaining.

OP  

Posted: June 4th, 2014 8:50 AM

The core issue here (outside of logical business) is trust and equity. The reality is they had to make a judgement call - was it perfect - time will tell. BUT we can't continue to second guess every decision made. Would you do this if it were your company - of course not. On equity issue, sorry but your business is not generating large tax base - so no you wont get money. TYhat part is simple math IRR/NPV equation.

Local Business Owner from Oak Park  

Posted: June 4th, 2014 8:38 AM

The trustee says this is not a payoff? Of course it is. If they fought off others who wanted the space, my answer is why? Maybe someone else would take the space without the payoff. And when does our firm get a payoff for staying in Oak Park?

OP  

Posted: June 4th, 2014 7:22 AM

@ legal. This is exactly what public funds should be used to invest in - revenue produing projects. How many years will it take to Ridgeland to ever break even. Lets stop the constant WHINNING in OP. It is truly sad to see a once great town devolve into contast analysis - where everyone is an expert. MOVE ON

legal jeopardy  

Posted: June 4th, 2014 6:54 AM

"We (Pete's) worked in good faith to block out other competitors, such as Jewel, who wanted this property as well". Wonder how Jewel, the other competitors, and Dominick's feel about the village intervening on a private property transaction that favored Pete's with a $1.5M public subsidy? Slanting the private playing field with public funds that favors a preferred buyer is not the role of local government, despite what Marty Bracco thinks. We don't want the property tied up for years in court.

OP  

Posted: June 4th, 2014 6:31 AM

Not sure why every person expects Annan or whoever to tell you every detail on deals? A most of us cannot understand the nuiances and B it is too hard to get stuff done. C relatively speaking (i.e. $30M on pool, $7M on gym center) this is a deal. Dont care if you agree - it is fact of life.

OP  

Posted: June 4th, 2014 6:28 AM

@ Glen. This is the challenge - disclose every detail and have a discussion like the ones on this board, have endless torrent of complaints or try to get a deal done. The conversation was likely a request at the time - not a promise. Once Pete's bought the property, the village likely decided to pull the trigger. OP has shown time and time again we fu_k up great deals y endless complaining, pointing fingers etc. This is why we are in the situation we are in..

in Glen Ellyn formerly from OP  

Posted: June 4th, 2014 6:09 AM

to OP writer- You wrote, "Business is hard nosed and very tough - we need honest discussion..." Thanks for reiterating the point being made here that you otherwise seem to want insult others for making. The deal was NOT honest as the $1.5M part has been reportedly been both previously agreed upon and yet officially asked for after the deal's closure. The confusion expressed by posters here is valid. People, TAXPAYERS here, your fellow OPers, don't like being lied to. Rude to discount them.

Jack from Oak Park  

Posted: June 3rd, 2014 11:58 PM

Was the 1.5 million committed to with a wink & a nod sometime before this Board meeting. If so then perhaps it was part of the deal that brought Pete's to OP. But if OP simply gave Pete's an extra 1.5 million incentive after Pete's had already committed to OP with some pretty big bucks that they couldn't easily leave behind, then our trustees may have needlessly enriched Pete's at taxpayer expense. Perhaps the Board could provide a timeline of events.

John Butch Murtagh from Oak Park, Illinois  

Posted: June 3rd, 2014 10:23 PM

Here we go again! We have the first addition to the village debt since TIF's went down the sewer. Going into debt for a development does not imply failure, but it should remind us that nothing has been done in the last year on village debt, fund balance, or the village outrageous headcount. All three were big issues in the 2013 election. Not a big surprise, but a nasty outcome for those that expected change.

Fisher  

Posted: June 3rd, 2014 9:52 PM

How many hungry children and senior citizens would 1.5 million dollars feed?

OP   

Posted: June 3rd, 2014 9:34 PM

@glen ellyn. this is business not personal. We have a current competitive position (vis a vie other places) and reality. This is about moving OP forward - not hurt feelings. Business is hard nosed and very tough - we need honest discussion -we dont all need to agree.

Thank You from Oak Park  

Posted: June 3rd, 2014 9:23 PM

@Glen Ellyn: as a resident in this neighborhood, I can assure you that I and many of my neighbors were very concerned about what a big vacant property like this could have done to our property values. I agree with the trustee who said that this is how the game is played. It's what Berwyn, Forest Park, etc. do all of the time. And Pete's is a great store. Ultimately, this is great for all of Oak Park.

in Glen Ellyn formerly from OP  

Posted: June 3rd, 2014 9:11 PM

to writer OP: insulting and pressuring fellow OPers to think like you do to accept a sneaky deal really isn't endearing. 1) the public was lied to by withholding the complete deal info 2) Were ALL the bidders allowed a $1.5M post-sale enrichment benefit? 3) It was a dang fine neighborhood long before a chain grocer arrived, while the stinky bus barn was in that location and Blaise's Grocer and butcher next to Lickton's Cyclery served the locals. People make the neighborhood. Treat them right.

Kmarch from Oak Park  

Posted: June 3rd, 2014 9:09 PM

Just a second here:" Village President Anan Abu-Taleb argued that the store not only would generate sales and property taxes for the village, but it also would increase property value for nearby residences by around 5-7 percent." Did the property values go down when Dominick's left? Did homeowners get lower assessments because of Dominick's leaving? This sounds like double talk to justify giving Pete's the money.

OP  

Posted: June 3rd, 2014 8:40 PM

Peel back the numbers and do analysis ... OP is middle class which has been hit hard by stagnatn wages, etc. This is why the number of students below poverty/free lunch has expanded rapidly etc. We are at a inflection point - and the actions we take will determine if OP gets anywhere near former glory or continue decline (i.e. prohibitive taxes, middlish schools, flat property etc) ... this is a test ...

OP  

Posted: June 3rd, 2014 8:34 PM

of course this deal was struck long ago - by the time it is public it is perfunctory requirement - why is this so hard to wrap our heads around.. this will do $20-40MM in revenue a year... how many other businesses does OP have oned up at this size - ZER0. We need to adjust our expectation is we want to succeed. OP needs this business more than they need us...

OP  

Posted: June 3rd, 2014 8:29 PM

Again, we act as if we are doing a business some great service by locating in OP. Declining middle class demographics, poor business environment etc. This is a smart investment - we just spent $30MM on a pool that looks just like the old one and complain about this. Step back, use your smarts and you will see that this had to get done. This is agressive deal making - that is the tone/tenor OP needs - like Berwyn, Forest PArd etc.

Correction from Oak Park  

Posted: June 3rd, 2014 8:10 PM

This is a great addition to Lake Street! Thank you Pete's, and thank you Village Board for supporting this project. @Asian Boy: this is not a TIF. Get your fact straight before you post.

Josh from Oak Park  

Posted: June 3rd, 2014 7:42 PM

Is this the ideal use for tax dollars? Probably not, but OP needed another grocery store. I'm thrilled about Pete's. To me they are a scaled down Mariano's and far superior to Jewel. Look forward to it opening...

Hy-Park-Crit from Oak Park  

Posted: June 3rd, 2014 7:40 PM

Watching the meeting last week the Pete's representative was very specific telling everyone that they HAD discussed this money with Anan. This was a done deal before the sale of the building occurred. So much for our hero and savior, just more of the same.

Tom Scharre from Oak Park  

Posted: June 3rd, 2014 7:29 PM

For pete's sake.

Lee Kantz from Oak Park  

Posted: June 3rd, 2014 7:27 PM

For those of us who live on the south side of Oak Park--often dismissed to the point of feeling like "North Berwyn" instead--"Pete's" refers to the long-standing hot dog and fast food joint on Ridgeland and Roosevelt, where you can get outstanding food and great service for a great price. We live around the corner and go there regularly. You could show some respect for an Oak Park institution by recognizing there's another business by this name, and one that doesn't need $1.5 million to succeed.

Bridgett from Oak Park  

Posted: June 3rd, 2014 7:08 PM

@not surprised, Pete's is a wealthy out-of-town developer?And what are all the campaign promises has the new Village President broken? Regarding the quote you pulled, I think she is talking about how much they paid for the property. The high bid "blocked" the competitors.

Brian Slowiak from Oak Park  

Posted: June 3rd, 2014 7:00 PM

"The best and most important use of out tax dollars is to attract and retain for profit businesses". I thought the best and most important use of our tax dollars was to provide services to the citizen, that the citizen can not provide for themselves ie. police, fire,sewer, water, roads etc.The oath of office is to support the Constitution and local ordinances. What should be examined is why some towns paid and some towns did not pay.Good luck OP.

Mark Graham from Oak Park  

Posted: June 3rd, 2014 6:56 PM

This is a private company that currently operates nine stores in the world, all in average to slightly below average locations in and around Chicago. This property was purchased four months ago and as far as I can tell there has been zero work done on it since. Maybe it will turn out ok, hope so.

Asian Boy Toy  

Posted: June 3rd, 2014 6:49 PM

THIS SHOWS WHY TIFS ARE NOT NEEDED!!!! If a municipality wants to pay to fund development, they can do it out of their general funds, they don't have to rely on a Cockamamie scheme that steals from the parks and schools.

not surprised  

Posted: June 3rd, 2014 6:48 PM

What exactly does this mean? "We worked in good faith to block out other competitors, such as Jewel, who wanted this property as well."

not surprised  

Posted: June 3rd, 2014 6:44 PM

I'm sorry, but I'm not surprised, to see the new Village President break all his campaign promises and allow himself to be co-opted by the prevailing Board position of transferring hard earned Village tax payer dollars to wealthy out-of-town developers.

Matt Cotten from Oak Park, Illinois  

Posted: June 3rd, 2014 6:05 PM

I look forward to being able to get groceries again locally. Having that building empty is an eye sore. Good job VOP and OPEDC!

Neighbor from Oak Park  

Posted: June 3rd, 2014 6:04 PM

This is great news and a smart investment for our community. Pete's has great stores, and this will be a real asset. Welcome, Pete's!

Benjamin Hill from Oak Park   

Posted: June 3rd, 2014 6:01 PM

Does the agreement include the clawback?

Marty Bracco from Oak Park, Illinois  

Posted: June 3rd, 2014 5:40 PM

The best and most important use of our tax dollars is to attract and retain for-profit businesses. Not wholesale giveaways, mind you, but smart, targeted spending to expedite commercial activity. This use of funds will have a near immediate payback. I live within 100 yards of this building,and can state unequivocally that every day this site sits idle, the value of our neighborhood decreases. To say this is an anchor property is an understatement. To think that the money used here is taking away from roads or social services is simply not factual. There will be an immediate, direct return to us taxpayers. Now, expedite the permit process and let's get this thing moving. The sooner crews are on site, the better.

OP  

Posted: June 3rd, 2014 5:08 PM

Why mush OPers whine about everything. First we comlain the OPDC is not aggressive and then we complain when they give incentives. Look - hard facts of life - OP is not what it used to be, taxes are crazy and businesses are NOT failling over themselves to come hear. We need Pete's both for food/retail and reputation. Lets stop whinning and start winning - to enable OP to get its MOJO back!!! please ;-)

Lisa from Oak Park  

Posted: June 3rd, 2014 5:06 PM

How about that money fixing the roads in Oak Park? I could think of a hundred ways to spend that money that would benefit the village. It's just bribe money.

Joel A. Schoenmeyer from Oak Park, Illinois  

Posted: June 3rd, 2014 4:49 PM

Very disappointing news.

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