Koch Foods pulls out of Rosemont development
Koch Foods, a $3 billion national chicken processor that planned to relocate its headquarters to Rosemont, is withdrawing from the village's planned The Pearl development, officials said Wednesday.
The estimated $18.5 million construction cost of Koch's proposed 3-story, 45,000-square-foot office building was deemed to be too much by the company, which had a $12 million budget, according to Mayor Brad Stephens.
"The pricing came in a little rich for their blood," Stephens said at a village board meeting, during which trustees agreed to terminate Koch's real estate contract and redevelopment agreement.
Were Koch to have altered its plans and built a less-costly building of around 30,000 square feet, Stephens said it wouldn't have been large enough to satisfy terms of the redevelopment agreement.
That agreement was to have provided village-owned land to Koch for free, but it required a large enough building to generate the necessary tax increment financing dollars for the village to recoup its costs.
The village board enacted Rosemont's eighth tax increment financing district in February in an area that includes the 16 acres of vacant land that will become The Pearl south of Balmoral Avenue and west of the Tri-State Tollway.
Under a TIF, property taxes paid to local governments within the area are frozen at their current level for the next 23 years, and taxes collected above that level go to a special fund controlled by the village to pay for public and private improvements.
Koch, currently based in Park Ridge, had until June 30 to back out of the deal as part of a "due diligence period" guaranteed by the contract.
Company officials didn't respond to a request for comment.
Stephens said he isn't sure what will go in the spot where Koch's building was intended.
Also planned at the development is a 5-story, 163-room boutique hotel. Its name was revealed Wednesday as The Rose. That was the winning entry in an email survey sent last month by the village on behalf of Janko Group, which is developing the hotel.
The Bradley, suggested in jest by the village's public relations staff as a nod to the mayor, finished second.
Two restaurants are also being planned at The Pearl, though it's still unclear whether the previously announced Buddy V's Ristorante, an Italian restaurant and bake shop named for reality TV star and investor Buddy Valastro, will be one of them.
Braden Real Estate, a Chicago-based development firm, is working on deals with potential eateries, officials said.
Construction on the buildings is scheduled to begin next spring after underground stormwater detention work is complete. The new development is expected to open in the spring or summer of 2018.