Pete’s Fresh Market, which completed the purchase of the shuttered Dominick’s grocery store in January, is asking the village of Oak Park for $1.5 million to open the new store by the end of the year.
Documents sent to the village say the store will use the funds “to facilitate renovation of the property” at 259 Lake St. to include façade, landscaping and parking improvements, as well as placing a café in the southeast corner of the building. Pete’s also agrees to have a “targeted” grand opening in the fourth quarter of the year.
The Oak Park Economic Development Corporation interim executive director, John Hedges, said the organization supports the deal.
Village President Anan Abu-Taleb, who serves on the OPEDC Executive Committee, said in a telephone interview that the incentive package is a “good investment and a good return on the investment in a short period of time.”
He said the village could generate the money for the incentive package through a combination of cash from the village and borrowing.
“This is an investment that is worth borrowing for,” he said.
Hedges said in a telephone interview that the deal was part of negotiations with Pete’s from the beginning.
“We didn’t start at [$1.5 million],” he said. “As in any negotiation, you find common ground. They were looking for substantially more.”
Pete’s will make a formal request to the village at the weekly board meeting set for Tuesday.
The packet sent to trustees notes that Pete’s purchased the building and land for $6.25 million. Planned improvements include a gut rehab of the property that would run approximately $5.85 million.
The proposal states the incentive package will make up less than 13 percent of the total cost of the project, which breaks down to $1 of public investment for every $8 in private investment.
Pete’s currently has nine locations in the Chicago area and four new locations planned for Plainfield, Bridgeport and Willowbrook, in addition to the Oak Park location.
Oak Park would not be the only community to provide incentives to the grocery store chain, according to the proposal. Pete’s says that Willowbrook provided $5 million in tax increment financing, Bridgeport provided seven acres of land worth $1.8 million, and the village of Plainfield also contributed seven acres of land.
The proposal also states that several other grocery chains have received similar deals, including:
$3.8 million for two acres of land for a Mariano’s in Harwood Heights.
$3 million in development costs for a Mariano’s in Westmont.
$2 million land subsidy for a Trader Joe’s in Evanston.
$1.5 for site improvements for a Mariano’s in Lake Zurich.
$1.5 million in development costs for a Mariano’s in Elmhurst.
$850,000 for site improvements for an Aldi in Geneva in 2007.
$800,000 for site improvements for a Caputo’s Market in Addison.
Oak Park is currently losing $250,000 a year in sales tax revenue due to the closure of Dominick’s, according to the document presented to the village.
It would take the village approximately two years to break even, based on sales and property taxes, if they approve the incentive package, according to the proposal.