The Oak Park Board of Trustees moved forward with a developer's plan to build a grocery store and senior living facility on Madison Street near Oak Park Avenue. But the board's approval of a redevelopment agreement at its Dec. 10 meeting is just the beginning of a process that could take until 2021 to complete.
The redevelopment agreement (RDA) with Jupiter Realty and its partners, approved by the board of trustees in a 6-1 vote – Trustee Simone Boutet was the sole dissenting vote – proposes to build a 41,500-square-foot Pete's Fresh Market at 644 Madison St. The grocery store would take the place of the vacant Foley-Rice building, which is immediately east of the village-owned parking lot at the northeast corner of Madison Street and Oak Park Avenue.
The village-owned parking lot will be redeveloped into a 112-space parking lot for Pete's.
Jupiter also partnered with Paragon Real Estate to build an 8-story senior housing facility at 711 Madison St. – the site of a different Foley-Rice building that is currently occupied by Evolution Fitness Club and TranscenDance Studios – and would be owned and operated by Essex Communities of Omaha, Nebraska.
The senior living facility would be located on the south side of Madison Street and run west of Wesley Avenue and past South Euclid Avenue, closing Euclid to thru traffic.
Euclid also would be closed on the north side of Madison Street – the Pete's parking will run from the corner of Oak Park Avenue and Madison Street to just past where Euclid will now dead end. The Pete's would be between Wesley and the Euclid cul-de-sac.
The development also includes a 5,000-square-foot freestanding retail space in the Pete's parking lot at the corner of Oak Park and Madison.
Some of those costs will be paid for with funds from the Madison Street Tax Increment Finance District, a special taxation district that expires at the end of this year and holds roughly $13 million.
Under the redevelopment agreement, the village would contribute $3 million for the Foley-Rice building at 644 Madison and up to $2.3 million in environmental remediation of the three sites: up to $900,000 for the parking lot at Oak Park and Madison; up to $750,000 for the Foley-Rice building at 644 Madison St.; and up to $685,000 for the Foley-Rice building at 710 Madison St.
The village also would contribute land worth about $3 million and spend roughly $4 million in public improvements around the developments, putting the final taxpayer price tag at more than $12 million.
If the environmental remediation costs come in under the spending caps, Tammie Grossman, director of Oak Park's Development Customer Services Department, said the developers could use the remaining funds on other eligible TIF expenses. She said that if the environmental costs turn out to be more expensive than the caps, then the developer could come back and request more funds from the village or choose to pay the costs themselves.
Environmental costs could be critical to the project because the village purchased Car-X Tire & Auto, 700 Madison St., in 2017 for $1.3 million in anticipation of a forthcoming Jupiter development -- Oak Park also paid $141,000 to have the auto shop torn down in October.
Concern over the environmental cleanup stems in part from an unexpected $3 million the village paid in 2016, when the Emerson Apartments were being built in downtown Oak Park. The village had to dip into the Downtown Oak Park TIF to cover the cost of cleaning up leaking oil tanks at the construction site.
The RDA notes that Pete's is expected to spend $22 million on the project and the developer will spend $52 million on the senior housing building.
Oak Park Mayor Anan Abu-Taleb said the development is projected to generate about $32 million in sales and property tax revenue over the first 20 years.
The RDA states that the Pete's is projected to generate $35 million a year in sales and bring in an estimated $587,000 annually in real estate taxes and $546,000 in sales taxes. The senior living facility is expected to generate about $473,000 in real estate taxes annually.
Grossman said the RDA is a 20-year agreement between the village and the developer and prohibits both Pete's and Essex from appealing their property taxes for the first 20 years.
Joshua Klayman, founder of the political organization VOICE of Oak Park and a candidate for village trustee in 2019, asked the board during public comment if it was wise to vote on a plan that is "incomplete and vague at this point."
He said the board largely made the decision to advance the plan by Jupiter and its partners at the recommendation of the Oak Park Economic Development Corporation, which is tasked with bringing business development to the village.
"It's particularly a problem that the economic development corporation and staff don't present fully developed alternatives for the board but rather that there's one preferred plan and it's thumbs up or thumbs down and that's not a very good way to make decisions," Klayman said.
The proposal still must go through the village's Plan Commission review process and then return to the village board for final approval.
A preliminary schedule notes that the developer is expected to submit an application to the village by the end of March and a review is expected to be completed in early August. If the board of trustees approves the project, construction would begin in spring of 2020 and be completed by fall of 2021.
Abu-Taleb said after the vote that the Madison Street TIF has been in place since 1995 and no board has ever successfully developed the corridor.
"Only in the very last year of that TIF, year number 23, after so many boards have tried and so many staff have tried, we have been able to have developers who are interested in investing in the Madison corridor, and they will be taking a risk …" he said.
He reminded the board that if the TIF funds aren't dedicated for a project before the tax district expires at the end of the year, "the village will have to go borrow the money at the village expense and the village pays that debt alone even though we don't get 100 percent of the benefit."
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