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."