Vernon Hills agrees to sales tax rebate to help new grocery store

Vernon Hills is willing to share the wealth for a shot at a new grocery store.

In what would be a rare incentive, village trustees have informally agreed to rebate $955,000 in sales tax to Bradford Real Estate, the developers of the Shoppes of Gregg's Landing along Milwaukee Avenue near Gregg's Parkway.

Bradford had requested the assistance to pave the way for a Mariano's Fresh Market because of what it described as continuing economic challenges.

As proposed, the village would keep all the sales tax for the first two years of a 15-year agreement and then share varying percentages in subsequent years.

The village would receive about $300,000 in each of the first two years based on estimated sales of $30 million. Sales are estimated to grow by 2.5 percent each year.

Bradford's cut eventually would total $1.5 million because the rebate agreement would include a "discount rate" of 5 percent.

"A dollar today is going to be worth less in 10 or 15 years," explained John Kalmar, assistant village manager.

The pact could end sooner should sales exceed expectations, for example, and the agreed-to rebate amount is reached before the 15-year mark.

Village officials during a discussion Tuesday considered various times and terms for what is regarded as a reluctant necessity.

The village last fall agreed to a sales tax rebate of about $1.2 million for owners of the Hawthorn Hills Fashion Square shopping center to upgrade the sagging area with Dick's Sporting Goods as a new anchor store.

But the agreement with Bradford would be only the second in village history for a new development.

"This town is still a very, very, very attractive retail center," said Mayor Roger Byrne. "This is something I don't want to have to do too many more times."

A 1996 deal, later modified to rebate half of all sales tax, lured computer giant CDW to Vernon Hills.

Byrne also insisted that the agreement with Bradford guarantee the village won't be asked to do other rebate deals for future users near Mariano's.

Mariano's Fresh Market is a new grocery store concept from Milwaukee-based Roundy's Supermarkets Inc. that combines the offerings of traditional and specialty markets.

The Vernon Hills store, planned for 70,000 square feet, would be the second in the Chicago area. The first is scheduled to open in a few weeks at the site of the former Lattof Chevrolet at Northwest Highway and Kensington Road in Arlington Heights.

The Vernon Hills store will be considered July 21 by the village's planning and zoning commission for an expected fall groundbreaking.

"We're moving along with this one," Kalmar said. "A new concept grocery store is a real exciting opportunity."