Incentive for Vernon Hills grocery store considered

Developers of a commercial area along Milwaukee Avenue in Vernon Hills are asking the village for help to snare a new grocery store.

For the second time since last fall, the village is being asked to rebate sales taxes as an incentive to stimulate business.

Bradford Real Estate, developer of the Shoppes of Gregg's Landing, wants up to $955,000 in sales tax generated by a Mariano's Fresh Market store to be reimbursed over 20 years.

Bradford would use the incentive for construction costs related to the six-acre site south of Gregg's Parkway to include the installation of utilities, parking lot and landscaping, for example.

That's due in part "to the economic challenges related to the credit market," according to Assistant Village Manager John Kalmar.

Bradford would build a 70,000-square-foot facility and lease it to Mariano's, a hybrid of traditional and specialty markets being introduced in the Chicago area as a new concept by Milwaukee-based Roundy's Supermarkets Inc.

The store is projected to have annual sales of about $30 million, which would translate to about $300,000 per year as the village's share of sales tax.

"It's a very exciting opportunity," Kalmar said Tuesday in a report to the village board.

Vernon Hills does not have a local property tax and has relied on sales tax revenue for day-to-day operations. Incentives have been virtually nonexistent, but the village last fall broke the ice by agreeing to rebate up to $1.1 million over 20 years to Chase Properties Ltd.

That money is being used to upgrade the dated Hawthorn Hills Fashion Square at Milwaukee Avenue and Route 60 to include Dick's Sporting Goods as a new anchor tenant.

Mayor Roger Byrne said Bradford is not "saving" a shopping center like Chase is, and he wanted more detailed financial information regarding the grocery store.

"I still have a hard time giving someone an incentive or rebate for new development," he said.

Given inflation and other factors, it is unknown at this point how much the village actually would be contributing. There was also some question of what would happen if the grocery store closed before the term of the incentive ends.

"When we hit $955,000, the deal is over. That's my recommendation," Byrne said.

Kalmar will develop three scenarios spanning various time frames to be considered by the board at a future meeting.