Developers eye vacant Kmart in Lombard for Mariano's

  • A vacant Kmart at the corner of Roosevelt and Finley Roads in Lombard could be redeveloped into a Mariano's grocery store.

    A vacant Kmart at the corner of Roosevelt and Finley Roads in Lombard could be redeveloped into a Mariano's grocery store. Bev Horne | Staff Photographer

Posted5/10/2016 5:10 AM

Glenbard High School District 87 might award incentives to developers seeking to raze the long-vacant Kmart store in Lombard and build a Mariano's.

If the agreement is approved, the village would contribute about 76 percent of the $3 million in incentives requested by Bradford Development. The village would not provide the money upfront but instead rebate a portion of the property, sales, and food and beverage taxes generated by the Mariano's grocery store for up to 19 years.


"The key thing here is it's performance-based," Village Manager Scott Niehaus said Monday. "It's not guaranteed. We can have an agreement that if Mariano's never opens and they never sell one loaf of bread, they're not entitled to a single dime from us."

Developers are expected to invest more than $20 million to tear down the Kmart that closed in 2013 and build a 74,000-square-foot Mariano's at the southeast corner of Roosevelt and Finley roads.

The village is petitioning three other taxing bodies to provide the rest of the incentives that its consultants say make the project economically feasible. The property is challenged by grading issues, asbestos and a need for traffic signal upgrades, Niehaus said.

"All these things make it difficult for a developer to make that site work," he said.

Under the proposal, Lombard Elementary District 44 would give 14 percent, Glenbard District 87 would grant 8.2 percent, and Lombard Park District would award 1.5 percent of the total incentives.

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District 87 would pick up a smaller share than District 44 because its boundaries extend well beyond Lombard, Niehaus said.

The site currently generates about $50,866 in property taxes to District 87. Any property taxes above that amount would be split 50/50 by developers and District 87 for up to a decade. That could cost the district a total of roughly $438,000.

If Mariano's sales "substantially exceeded" projections, the incentive could be paid out -- and the district could keep the full property taxes generated by the development -- sooner than expected, Niehaus said.

Niehaus and other village officials detailed the proposal Monday to the District 87 school board. Members made few comments about the financial terms but are expected to continue reviewing them at later meetings.

The incentives are similar to those provided in a tax increment financing district, which can last as long as 23 years. In a TIF, as redevelopment boosts property values, the extra tax revenue that otherwise would go to taxing bodies is used to pay for improvements to the area.


"It doesn't hamstring a school district for 23 years, but yet it operates in much of the same way," Niehaus told the board.

Lombard officials are set to make their pitch to District 44 Tuesday night. A meeting with the park district has not yet been scheduled.

If all sides approve the deal, developers could start preparing the site for construction in the fall.

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