Glen Ellyn may toughen business incentive program rules

Glen Ellyn officials are considering tightening rules for a grant program that provides incentives for new and expanding businesses to make improvements to their shops.

Utility work would no longer be eligible, among other proposed changes, after village trustees expressed concerns that the grants were supporting maintenance projects.

In 2015, the village board approved $127,500 in grants to seven restaurants and retailers. About $70,000 of that covered interior renovations in downtown businesses.

Several trustees this week raised concerns about the village's investment if a business closes.

"The day that business fails and the landlord can re-lease the space, he's getting a higher rent at our expense, really," Trustee Timothy O'Shea said.

Trustee Peter Ladesic wants to know what other communities do when a business defaults and may be unable to recover incentive money.

"My concern is that we're improving not the business owner's building, but we're improving a property owner's building," he said.

Village Attorney Greg Mathews said he would look into whether Glen Ellyn could require the building owner to file the grant application or to require both the tenant and landlord to file.

Now, "it's really kind of a mixed bag" of each applying for the funds, Village Manager Mark Franz said.

Downtown retailers can receive up to $15,000 once interior upgrades are completed and must have signed at least a three-year lease.

If the business shuts down or moves out of Glen Ellyn less than one year after getting the funds, the applicant must repay the village 75 percent. The village gets back 50 percent if the business closes its doors within one to two years and 25 percent within two to three years.

The village began reviewing grant applications in 2010 as part of absorbing many of the duties to entice new businesses from the Economic Development Corporation, a nonprofit group that disbanded about two years later.

"Back in the infancy, when it was started as an independent organization, it was because our infrastructure in the buildings were far behind what was the coded requirements," Village President Alex Demos said. "So we stepped in to help bring the building to code or provide infrastructure that was needed for the tenant to come in."

Converting facades to fit in with the historic downtown - "permanent and substantial" improvements - is one example of "economic development money well spent," Demos said.

"It shouldn't be deferred maintenance," he said.

Since the village began handling requests, four businesses have closed within the three-year window.

Two of the four received funding for awnings, which no longer qualify for the program. A restaurant called The Grotto got a facade grant, but that space later became the popular Fire + Wine. The fourth business, Peanut Butter Planet, filed bankruptcy and failed to pay back the village for funds that went toward upgrades such as accessible restrooms.

Still, a new restaurant moved in months later and made only "minimal improvements," Economic Development Coordinator Meredith Hannah wrote in a memo to the board.

"This is fluid," Demos said of the proposed changes, adding that they can be amended on a quarterly or even a "meeting-by-meeting basis."