‘A working relationship’: Elk Grove mayor and developer — once bitter rivals — ink TIF deals

A little more than four years ago — in the throes of a bitter term limits referendum campaign that sought to remove him from office — Elk Grove Village Mayor Craig Johnson took to the village board dais to publicly lash out at local developer Mario Gullo, accusing him of working behind the scenes to support the effort.

Johnson — the powerful mayor of Elk Grove since 1997 — even channeled “It's a Wonderful Life” during his half-hour monologue, comparing himself to main character George Bailey and Gullo to antagonist Henry Potter.

“It didn't become Pottersville. It stayed Bedford Falls,” Johnson said at the Jan. 28, 2020, village board meeting. “I'm waiting for Clarence to come down. It's not gonna become Gulloville. It's gonna stay Elk Grove Village.”

Less than a month later, the state Supreme Court invalidated the referendum.

And by the end of the year, Johnson and Gullo — who steadfastly denied being involved in a flurry of anonymous anti-Johnson robocalls, mailers and billboards during the term limits campaign — signed onto a nondisparagement clause in an agreement that resolved an annexation dispute between the village and developer.

Since then, time — as well as promises of tax increment financing district subsidies and sales tax revenues — may have helped heal old wounds.

Gullo, president of George Gullo Development Corp., inked redevelopment and purchase agreements with the village late last week that will allow him to build a full-service truck stop and two warehouses on opposite ends of the Higgins Road commercial corridor that runs through the Northwest suburban town.

Gullo paid $3.125 million for a 2.4-acre, village-owned property at 2300 E. Higgins Road, which he will combine with an old retail plaza corner property he owns next door, on which to build the Road Ranger fueling station and convenience store with three fast food restaurants and video gambling.

Farther northwest up the road, the developer paid $2 million for a 2-acre, village-owned property at 500-570 E. Higgins, where two speculative industrial buildings — each about 19,000 square feet — are envisioned.

Gullo is paying more for the properties than the village did: $1.75 million for the 2300 Higgins property, and $1.53 million for the 500-570 properties, all of which contained old office buildings.

But the village isn’t profiting off either deal, factoring in the amount of TIF assistance Gullo is due to receive, per the redevelopment agreements approved by the village board last week: $1.75 million for the gas station project and $1.5 million for the industrial warehouses.

That money will come from special tax funds the village set up in 2014 and 2017, respectively, in which property tax payments were frozen at set levels and incremental real estate taxes generated above that started going to the village instead of schools and other local governments.

Gullo was also promised $125,000 by the village to bury utilities in front of the new industrial buildings, and that the village would support his application for a Cook County Class 6b property tax incentive, which would allow the commercial site to be assessed at lower levels for a dozen years.

Gullo inked the redevelopment agreements on March 22 — a little more than a month after he made a $10,000 campaign contribution on Feb. 13 to Committee to Elect Johnson, the mayor’s political fund, state campaign finance records show.

It was the developer’s first donation to Johnson since a $1,000 contribution in November 2018. Three months after that, Gullo sued the village to block a forcible annexation of unincorporated properties he owns along Higgins.

Gullo didn’t respond to requests for comment.

The December 2020 settlement between the village and Gullo allows seven properties he controls to remain unincorporated and not subject to village ordinances. The pact also requires Gullo and village officials not to disparage each other through Dec. 1, 2024.

“We’ve always had a working relationship with him,” Johnson said after inking the recent redevelopment deals with Gullo.

The mayor said Gullo reached out to him personally to express interest in the village’s vacant 2300 Higgins property, which was needed to build the truck stop.

The $10.7 million project would include more than a dozen pumps, 80 parking spaces for cars and trucks, and a convenience store building with Wendy’s and Subway restaurants. Gullo has a 20-year lease and 20-year option with Road Ranger, the fourth-largest truck fueling company in the country.

Johnson said the development could mean $200,000 to $400,000 in annual sales tax revenues for the village.

Gas stations are “something our companies use all the time,” the mayor said. “Truck fueling is important. Rather them come to Elk Grove than going down the street to Bensenville to get it.”

Johnson said between the projected sales taxes and Gullo paying more for the properties than the village got for them, it’s a good deal.

“It’s a win all around for him, the village and the taxpayers,” Johnson said.

In the redevelopment agreements, Gullo states that but for the TIF assistance, the projects wouldn’t be financially feasible.

Construction on both developments along Higgins is expected to begin in 2025 and be complete in 2026.