In an effort to recover more than $26,000 East Dundee officials say the owner of a now-shuttered grocery store owes them, they are sending a letter of default to the owner that will order him to repay the balance.
The letter will also call out owner Fred Thompson for closing the store several years earlier than he was supposed to.
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At the same time, officials are seeking a new location for Discount Grocery within East Dundee so it can generate sales taxes for the village and repay the loan that way, Village Administrator Bob Skurla said Monday.
If he can't find a facility in the village and has to open elsewhere, Thompson has agreed to voluntarily come in and work out a repayment schedule with the village.
"I try to honor my commitments ... and the town was nice enough to try to keep me there, so I owe it; they gave me the money," Thompson said Monday.
In 2011, East Dundee lured Discount Grocery to the village by loaning Thompson $30,000 in tax increment district funds -- property taxes that go into development rather than to local governments -- which Thompson later used to purchase equipment. As part of the contract, the store was obligated to remain in East Dundee for five years and to repay the loan.
Instead, Thompson closed the store after 10 months last July, amid legal disputes with landlord Emin Tuluce about what he said was a failed partnership with Tuluce and renovations he said Tuluce promised but never delivered.
Tuluce is suing Thompson for $82,231.80 in rent dating back to July 2011 and for failing to repay an $80,000 loan he gave to Thompson for the business. Both cases are pending.
Meanwhile, an internal investigation found Thompson owes East Dundee $26,835 on the village's original loan.
Skurla said he knew Thompson was having legal issues at his old location and has been helping Thompson secure another spot in East Dundee since last summer.
But things came to a head last month when the most recent location Thompson was pursuing fell through, Skurla said, adding that he's committed to continue working with Thompson.
"This man just bent over backwards trying to accommodate his side of the deal, and I had felt it was inappropriate for us to (pursue) him legally while he was trying to correct a legal situation," Skurla said.
Trustee Allen Skillicorn has been trying to find out how much Thompson owed the village on the $30,000 loan since March, and in response to Skillicorn's inquiries, Village President Lael Miller launched an investigation. It found Thompson had paid only a total of $3,165 in sales taxes toward the loan between August 2011 and May 2012.
Skillicorn said he was not satisfied with Skurla's response and wishes the board had known the information sooner.
"We need to be more careful with public funds than let them sit out there for 12 months," Skillicorn said. "If I hadn't asked (about the loan), who would have?"