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updated: 8/7/2013 8:31 AM

Developer: $1.5 million needed for new Walgreens in Batavia

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  • This is a renderin of the new Walgreens store in downtown Batavia that Batavia Enterprises Inc. has proposed. The developer has just asked the city for an investment of $1.5 million to issues that have arisen with the new site.

      This is a renderin of the new Walgreens store in downtown Batavia that Batavia Enterprises Inc. has proposed. The developer has just asked the city for an investment of $1.5 million to issues that have arisen with the new site.
    Courtesy of Batavia Enterprises Inc.

  • The current Walgreens store in Batavia Plaza in downtown Batavia. The company is proposing to build a replacement store just to the east, on the site where Prairie Path Cyclery stands. But the developer is asking the for $1.5 million from the city for issues that have arisen on its new site.

       The current Walgreens store in Batavia Plaza in downtown Batavia. The company is proposing to build a replacement store just to the east, on the site where Prairie Path Cyclery stands. But the developer is asking the for $1.5 million from the city for issues that have arisen on its new site.
    Susan Sarkauskas | Staff Photographer, 2011

 
 

A developer asking to build a replacement Walgreens store in downtown Batavia said Tuesday the plan may not be economically viable without as much as $1.5 million in investment by the city.

And city administrator Bill McGrath said the developer has proposed the city front the money by borrowing money, through general-obligation bonds, to be repaid over 20 years.

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The news came out as the city council, meeting as a committee of the whole, caught up on the project's status. Talks about the project entered their third year last month.

"I am very supportive of moving this project on, if for no other reason than to bring some finality on it. Either move it on or kill it. Let's get a decision," said Alderman Dave Brown.

Austin Dempsey, vice president of Batavia Enterprises Inc. said time is growing short to meet Walgreens' desires. If the store is not built by Oct. 1, 2014, Walgreens corporate leaders will start reconsidering whether to build a new store at all, he said.

Dempsey said to do that, construction would have to start no later than March.

The $1.5 million BEI is requesting arises from issues with the site, which is the former Swanson's Hardware store at 122 W. Wilson St., he said. That and the shopping center to the west, which BEI also owns, were built in the early 1960s over a filled-in channel of the Fox River. There is a concrete sluice that runs underneath the hardware store, connecting Depot Pond north of Wilson Street to the river. Moving that sluice would likely cost at least $250,000, Dempsey said. BEI would prefer to keep it where it is but needs Walgreens' permission.

Soil borings have also revealed the proposed new building would need extra support, in the form of steel piers or caissons, Dempsey said.

Overall, he estimated the project's cost at $6 million. The tax-increment financing district investment would "pay for itself" in increased property value and sales taxes, he said, as well as continuing to be a retail anchor for the downtown. (Tax-increment financing districts freeze property values for the purpose of collecting property taxes for taxing districts. Increased taxes above that amount go in to a fund for improving the district.)

But McGrath said the sales tax impact may not be that great because a large part of Walgreens' sales comes from food and drugs. Nonprescription drugs and food are taxed at a lower rate than general merchandise, and prescriptions aren't taxed at all.

"It is not going to produce more TIF money because it is a Walgreens now, and it is a Walgreens then," McGrath said.

Dempsey also showed an updated plan for switching publicly available parking. The city owns a 53-stall H-shaped parcel between the shopping center and the hardware store. BEI owns the rest of the parking for the shopping center, and a private lot to the east. Dempsey proposed BEI buy the city lot, and give the city an easement allowing parking by the public on the whole lot. The deal would require any future development on a 53-spot area on the east side, however, would require that development to replace those spots.

McGrath said the city will receive a consultant's report analyzing BEI's TIF request in the next week or so.

Things grew a little heated, after Brown asked why the project hasn't proceeded. McGrath put the blame on Batavia Enterprises, saying there have been delays in receiving information from BEI about financial, engineering, parking and other questions.

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